Friday, May 29, 2015

Doctor Complaints about Electronic Health Records

In a May 28 Washington Post column, “Why Doctors Quit,” Charles Krauthammer, a psychiatrist turned critic, reports doctors’ main ObamaCare complaint centers on the use and abuse of electronic health records (EHRs).

While attending the 40th reunion of his Harvard Medical School class, Krauthammer could not help but notice his classmates’ constant harping about time and money wasted on EHRs. “The complaint,” observed Krauthammer, “ was not financial but vocational, an incessant interference with their work, a deep erosion of their autonomy and authority, a transformation from physician to ‘provider.’ “

The complaint devolved on EHRs, and a “never-ending attack on the profession from government, insurance companies, nad rules and regulations topped by electronic health records.

When President Obama was elected, he promised EHRs would save $77 billion by 2015. His adminitration threw $27 billion towards eliminating paper records and replacing them with digital records.

Instead, for doctors, the opposite has occurred. Paper records are still there. Overhead for EHR installment and maintenance has skyrocketed, and little if any money has been saved, all at the cost of time spent with patients. A study in The American Journal of Emergency Medicine reports ER doctors spend 43% of their time entering clinical data and 28% of their time with patients. In physician office, productivity, i.e. time spent with patients, has dropped 25% to 30%, and a physician survey indicates practitioners spend an average of 48 minutes a day just entering clinical data. The result, aka Krauthammer? “Money squandered, patients neglected, good physicians demoralized.”

Krauthammer’s comments do not surprise me. Over the last 2 years, I have written over 40 Medinnovation blogs on the negative and dehumanizing impact of EHRs. EHRs may be documentation friendly but they are not doctor friendly. They are yet another example of bureaucratic arrogance at the expense of patients, doctors, and the national debt.
ObamaCare and Struggle for Context

As the ObamaCare debate drags on, you rarely hear anyone putting the health law in context.

Right now the argument over the upcoming Supreme Court decision is about what to do with those 7.7 million people subsidized on federal health exchanges should the Court say only those on state exchanges can be subsidized.

Assuming the U.S. has a population of 320 million, what about the other 313 million? What about us? Well, about 125 million are on Medicare (55 million) or Medicaid (70 million). That leaves 188 million. Another 10 million are in VA or other military related programs. That leaves 178 million. Another 11 million are illegal immigrants. We’re now down to 167.3 million. Of these 167 million, employers and self-employed account for about 150 million. Of the remaining 17 million, 2 million or so are on state heath exchanges, and the rest have no insurance or are unaccounted for.

Which brings us putting taxes in context to pay for those on health exchanges, Medicare, Medicaid, and Veterans’ programs.

Of the 313 million, the top 10% pay 40% of income taxes, the middle 40% pay 60% of taxes, and bottom 50% pay little or no income taxes.

Which leads to these aphorisms.

Nothing is certain but death and taxes. Taxes are the price we pay for a civilized society. In any civilized society, the middle class carries the burden for any government program. There are never enough rich people to carry the burden of any general government service. According to the Laffer Curve, there is a point at which a high level of taxation is counterproductive and leads to less government revenue. This may be where we are now with the highest corporate income tax in the world. The more you tax something, the less return you get. But says the President, It is not the level of taxes or their return that’s important, it’s the fairness of the taxes.

Thursday, May 28, 2015

High ObamaCare Administrative Overhead Costs

Why are health costs so high? The answer is obvious: high administrative costs. In a May 27 Health Affairs Blog “Post Launch Problem: The Affordable Care Act’s Persistently High Administrative Costs,” David Himmelstein, M.D. and Steffie Woolhander, M.D., a house and wife team out of Cambridge, Massachusetts and liberal long-time advocates of single-payer, give these reasons for these high costs:

“Most of this soaring private insurance overhead is attributable to rising enrollment in private plans which carry high costs for administration and profits. The rest reflects the costs of running the exchanges, which serve as brokers for the new private coverage and will be funded (after initial startup costs) by surcharges on exchange plans’ premiums.”

“Government programs—primarily Medicaid—account for the remaining $101.4 billion increase in overhead. But even the added dollars to administer Medicaid will flow mostly to private Medicaid HMOs, which will account for 59 percent of total Medicaid administrative costs in 2022. (The subcontracting of Medicaid coverage to private HMOs has nearly doubled Medicaid’s administrative overhead, which has risen from 5.1 percent of total Medicaid expenditures in 1980 to 9.2 percent this year).”

In other words, it’s the private insurers fault/ Medicare and Medicaid, the two like to say, could run a single-payer system with a 2% overhead cost rather than the 22.5% it now costs

Peter F. Drucker (1909-2005), the father of modern management, had another explanation, the government itself is responsible

“Government is a poor manager. It is, of necessity, concerned with procedure, for it it also, of necessity, large and cumbersome. It must administer public funds and must account for every penny. It has no choice but to become ‘bureaucratic.’ Every government is, by definition, a 'government of forms.1 This means high costs. For ‘control’ of the last 10 percent of phenomena always more than control of the first 90 percent.”

“No, no, it’s neither” , say the Internet gurus, such as Jeff Bozos of Amazon, it’s those ubiquitous middlemen. Remove them from the equation, buy directly from us online, and you’ll cut costs dramatically.

Concierge and direct primary care physicians, have yet another explanation, and it’s right in front of our noses. ObamaCare and insurers make up ,more than 50% of physician overhead costs and are mostly irrelevant to caring for the patient. Deal directly with patient, cut out the 3rd parties – insurers and government – and do away with those nuisance regulations and costs will go down. Pull out of ObamaCare, and you can reduce your staff, the need for coders , close down your electronic health record system, and spend your time with the patient rather than collecting data for the government. And you will save taxpayers money. According to Sara Ferris in The Hill, “Overhead Costs Exploding under ObamaCare, “ the government now spends $270 billion in administrative costs – 45% of all ObamaCare costs.
Anxieties Mount as Supreme Court Decision Approaches

If writers of health law had it to do over again, they would undoubtedly not use the 4 words “established by the state.” These 4 words are the basis for plaintiffs’ suit in King v. Burwell, and for anxieties should the Justices rule against ObamaCare. It may the 4 words are, as health law’s writers now claim, were “inadvertent,” “inartful,” “in error,” “inexplicable,” “just a mistake,” or “what was said want not what was meant,” but as Justice Antonin Scalia commented, “What matters is not what Congress would have wanted but what was enacted.”

What matters now is how voters will react in 2016 when they know the impact of the Court’s ruling on 7.7 million with federal subsidies, on 2.85 million with state subsidies, on 1.14 million on health exchanges who did not qualify for subsidies. If federal subsidies go by the board, subsidy holders will see premiums go up by these amounts: Miss. 774%, Alaska 449%, Ga 364%, Maine 347%, Fla., 338%, Molm, 330%, N.C. 317%, S.C. 314%, Wyo. 313%, and La.298% (Source: Avelere Health). If the Court upholds the lawsuit, monthly costs for those with subsidies will climb from $100 to about $350. And for the rest of us under 65 not on Medicaid or Medicare, we will see average family deductibles for an ObamaCare bronze plan i $10,545 and for a silver plan $6,010.

As healthy consumers forgo buying health insurance, and the sick hold on to their policies, we may see a collapse of the insurance industry, the so called death spiral.

How did this happen? Well, there’s the faulty wording of the law. But there’s also the mandate for broader coverage covering 10 essential benefits, and the fact that insurers can no longer exclude maternity, mental health, prescription benefits and cannot deny coverage for or charge more for someone with a pre-existing condition.

The Obama administration has reacted by offering no backup plan, reasoning that no compassionate Justice would deny subsidies to those who need it. The GOP is scrambling to come up with an alternative plan, such as allowing those with subsidies to keep their subsidies through 2017, until after the elections.

This Court’s decision sets up the potential for a bitter political battle whatever the decision. In the meantime, until the decision is rendered a month from now, the writers of the health law are saying the drafting of the law was “sloppy,” an overlooked “typo, “ for which nobody need claim responsibility. The important lesson here is to say what you mean, not say what you think you meant to say.
"Americle" on Memorial Day

Today is Memorial Day, a day to remember our fallen military heroes and a day to recall our manifest destiny. We are an exceptional nation, a land of the free and the home of the brave, a land of rich resources, a land that others look to for leadership.

We are a nation in search of Presidential leadership . With the advent of the social media, and the ability of ISIS to use it to recruit and broadcast its message, we are being chalenged as never before. More than ever we need to believe in ourselves, and to have the world believe in us. We live in a global marketplace of ideas and products. There are signs we recognize this new world. We may be about to enact a free trade agreement, and a House panel has unanimously passed a bipartisan $13 billion 21st Century Cures’ Bill to speed drug development and medical innovation.

The time has come to renew our confidence in America to lead from the front and to renew the world’s confidence in our leadership. For the occasion, I have coined a new word “Americle.”

“Americle” fuses the words “America” and “Miracle.” Americle is the belief that American is a land of miracles – an exceptional nation. Americle is that Shining City on the Hill. Americle is humankind’s best hope for freedom.

Americle is the land where all men and women, where all races and creeds have equal opportunity. It is the land where everybody has a fair chance to rise.

It is the land where the poor are protected. It is the land where the poor can dream and opportunity of becoming richer. It is a land of a vast middle class. It is the land with a growing economy. It is the land where anyone become educated, can earn and own a car, a home, a computer, a television set, and a refrigerator.

It is the land of innovation and entrepreneurship where everyone’s ideas are possible and achievable. It is a land where individuals dictate what government does, not the other way around. And finally, it is a land where everybody, in one way or another, ought to access to the best health care and the best technologies that medicine has to offer and where the freedom to innovate keeps us as the medical leader of the civilized world.

America, according to Alistair Cooke, is “ a rousingly, complicated place,, this land thrashing over such incessant contradictions as control and permissiveness, the radical young and the conservative middle, the limitlessness of civil rights and the limitations of presidential power… it embraces the notion of healthy live as a continuing conflict.”

What is the miracle of America? Justice Oliver Wendell Holmes of the Supreme Court it exemplified in the Constitution. “A Constitution is made for people of fundamentally differing views.” This point of view will be on full display in June when the Supreme Court decides the fate of ObamaCare. It is a land where we can agree to disagree and still live as one people.

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Is ObamaCare Fair?

In the course of writing 1700 blogs on ObamaCare since 2013, I find myself still asking: Is ObamaCare fair? Progressives insist redistribution of wealth from the rich to the poor is the only fair thing to do. Conservatives say the best way to distribute health benefits is through free-market growth that lifts all economic boats.

Pragmatists believe all’s fair in love, war, and politics. As Winston Churchill, sagely noted, the end result usually blends capitalism, “the unequal sharing of blessings”, and socialism, “the equal sharing of miseries.” The U.S exemplifies the former, European welfare states the latter. The pragmatist looks at results, the ideologue at principles.

ObamaCare boils down to a contest between competing ideologies – those on the left take it as a given universal coverage is” fair” and therefore worth any price: those on the right maintain entitlement spending has limits if it interferes with economic growth and individual freedoms.

These differences lead to nettlesome questions:

Is ObamaCare fair if:

Only one political party representing roughly of Americans voted to pass the health law while the other political party the other half of Americans opposed it?

The health law contained coercive mandates forcing every individual to buy health care coverage whether they believe they need it or not or pay a penalty, every business to cover workers’ health care or pay a $2000 penalty for every uncovered employee, and every business to pay for contraceptive or abortafacient drugs if their religious belief says otherwise.

The health law redistributes federal and taxpayer monies from those who pay for coverage and from the young and healthy to the those subsidized for coverage and to older and sicker people .

The health law forces physicians to install expensive electronic health records, to collect data from all patients, to ask federally mandated questions in the name of quality, to bear the burden of time-consuming federal regulations, to prescribe electronically, or to be punished with lower Medicare or Medicaid or health-exchange payments.

The health law remains unpopular among the American people by majority margins of 10% or more, and results in higher premiums, deductibles, and out-of-pocket costs, cancelled policies because they do not meet federal standards for “essential benefits” many policy holders do not think they need, and the dropping of physicians and narrowing of insurers networks because physicians choose not accept lower payments and time-consuming coding regulations.

Saturday, May 23, 2015

ACA and Supreme Court: Heads Obama Wins, Tails GOP Loses

Today’s May 22 WSJ editorial “In Search of ObamaCare Breakout,” says in essence:

If Supreme Court decides present ACA law re: federal subsidies is unconstitutional, Obama wins, the GOP loses.

In other words, no matter what the decision, it will be a win-win for ObamaCare. The good ship, ObamaCare, with 7.7 million subsidized low and middle income folk who cannot afford health insurance without subsidies, who signed up on basis of federal promises through no fault of their own, is past the point of no return in its voyage towards universal coverage.

The only remedy is a unified GOP plan that offers temporary relief , perhaps a year or two extension of subsidies, or generous tax credits, agreed upon the GOP and acceptable and understandable to the American people.

According to the WSJ, the GOP is struggling to keep a legal victory from becoming a legal defeat. With a victory, GOP governors are petrified of being placed into a lose-lose situation. They will be blamed for cutting people off medical care and forced to restore subsidies by joining ObamaCare while being pilloried by ther conservative base.

Ron Johnson, Republican Senator from Wisconsin, has proposed extending subsidies until August 2017 while deregulating ObamaCare. This deadline would allow debate during the Presidential campaign. It would also come after the big increases in 2016 premiums under the health law, now set for major insurers, at 52% in New Mexico, 36% in Tennessee, in Maryland, 25% in Oregon, and 13% in Virginia.

To prevent a heads you win, tails you lose, scenario, Republicans need to settle on clear, simple political strategy that the American people understand and accept as fair to all.

Thursday, May 21, 2015

CMS and Health Care Innovation

Today’s May 21 New England Journal of Medicine contains 2 pro-government innovation articles.

One, R.Rajkumar, M.D, et al, “The CMS Innovation Center- A Five-Year Self-Assessment, “ from the Centers for Medicare and Medicaid Services, Baltimore, which says CMS “will continue working to contribute to U.S. achievement of the goals of better care, smarter spending, and healthier people.”’

Two, L. Casalino, M.D, and Tara F. Bishop, M.D., “Symbol of Health System Innovation? Assessing the CMS Innovation Center,” from the Department of Healthcare Policy Research, Weill Cornell Medical College, New York, which ends, “The annual $1 billion appropriated for CMMI (Center of Medicare and Medicaid Innovation) represents an infinitesimal fraction of the $3 trillion that the United States spends every year on health health care. At that price, CMMI looks like a good investment.”

As evidence of the success of CMMI, the first article cites these examples

$3.724 savings on average for a 90 day post-surgery episode of hospital orthopedic surgery in 4th quarter of 2013 for bundled payments.

2% gross savings for a comprehensive primary care initiative based on reduction in hospitalizations, ER visits, and 30-day readmissions.

$184 million in savings according to independent evaluation and $385 million in risk-adjusted savings for Accountable Care Organizations (ACOs) in Pioneer ACO Model.

Through 2013, 1.3 million “harms” were prevented and $12 billion and 50,000 lives were saved due to the synergistic model called “Partnership for Patients.”

These examples summarize CMS efforts to save costs and lives through bundled payments, primary care initiatives, ACOs, and partnerships with patients. These are said to be only 4 of the 26 models launched by the CMS innovation centers and are in their early stages of development. Not mentioned are the costs of these “innovations,” clinicians installing electronic health records and converting to ICD-10 coding. Savings may be "infinitetesmal" for government but not for clinicians.

I suppose we ought to be impressed by these articles, but I am reserving judgment. Innovations come in all forms –electronic, organizational, communicative, and technological, but most innovations stem from the private not the government sectorsl

We also ought to look at the government track record. It does not have a sterling reputation for innovation. Instead it is noted for its sprawling inefficiciencies and expanding bureaucracies. Government is poor at innovation because.

It cannot manage failure.

It seldom abandons a project.

It is not gambling with its own money.

Its success is measured in good intentions, not results.

It succeeds by growing too big to fail and too influential to stop.

It can’t go out of business, can print money to keep on going, and is propped up by taxpayer money.
Cost Consequences of Centralized Control

Centralized control of health care - ObamaCare - may have unintended consequences – premium cost increases. This may may end as the central lesson of the health law.

If you’ll recall, ACA passed on a wing and a prayer with the promise it would control costs of American health care, wh twice that of any other nation.

Instead the opposite may be the case. It costs money to comply with the raft of new regulations. To evade or minimize the cost of these regulations, hospitals and physicians are consolidaing and monopolizing many markets.

Consolidated health care organizations, as the only game in town, can negotiate and command higher prices. Federal antitrust authorities are often either too slow, too ineffective, or too powerless to counter these rising prices. Insurers raise rates to stay in business and satisfy investors, knowing that centralized government, has pledged to bail them to avoid a deal spiral in insurance markets.

Consequently, health exchange insurers in 6 states have already asked for average premium increases of 18.6%. These increases include 36% in Tennessee, 23% in Oregon, and 7.7% in Connecticut. The Congressional Business Office has estimated premiums will rise by an average of 8.5% each year for the next 3 years. if your premium were $2000 a month this year, it would be $2533 in 3 years. These increases may not directly impact those on health exchange subsidies, but it will raise premiums for those not on subsidies, and the increased costs will be passed on to American taxpayers, who will ultimately pay the price of ObamaCare’s redistribution policies.


Tuesday, May 19, 2015

ObamaCare: If You Knew Then What You Know Now

This is a series of questions for the 2016 Democratic presidential candidate regarding the 2010 passage of ObamaCare.

If you knew then what you know now, would you run the risk,

Of embittering Republicans through unilateral passage and unanimous opposition , resulting in more than 2 dozen Congressional votes for repeal?

Of incurring the disapproval of the American people whos have opposed ObamaCare in more than 95% in hundreds of national polls?

Of losing the House and the Senate in 2012 and 2014 midterm elections?

Of a disastrous October 2013 launch without adequately preparing or pre-testing before that launch?

Of setting the stage for 2 Supreme Court challenges on the Constitutionality of ObamaCare?

Of rewording the text of the health care law to make it clear the federal government rather than the states could set up health exchanges?

Of not recognizing that 37 states would opt not to set up health exchanges and 27 states would choose not to expand Medicaid?

Or would you say the fact that some 16 million uninsured Americans, 5% of America’s 320 million citizens, are now insured , was worth the cost of billions of dollars in new taxes, thousands of pages of new regulations, increased premiums and deductible averaging over 40% in individual markets, cancelled health care policies for millions , more part-time than full-time work, and narrowing of access to government-compliant physicians and hospitals, politically unpopular individual and employer mandates and penalties?
On Three Principles of American Government

I’m reading Alistar Cooke’s America (Knopf, 1974). Cooke (1908-1984) was an English journalist who became an American citizen. He tells the story of America dating from the Spanish conquistadors, to the French fur traders, to the English founding fathers.

In setting up our government’s structure, Cooke says the founding fathers focused on 3 basic principles – Compromise, Compromise, Compromise.

These 3 principles manifested themselves as checks and balances, the 3 branches of government , the Articles of Confederation, the Bill of Rights, and offsets between federal and state governments and between individuals and centralized government.

The 3 principles are useful to reflect upon as we bear witness to the ObamaCare related standoffs between states and Washington –sponsored Medicaid programs, state and federal health exchanges, the role of the Supreme Court, and other ObamaCare-related issues.

Compromise is not President Obama’s strength. He prefers to go his own way and to live and act in his own ideological bubble. Obama’s 3 principles seem to be to Personalize, Demonize, andMarginalize his political opponents, many of whom are his fellow Democrats, and those in the Supreme Court, who disagree with him. He does this through mandates and executive actions which may skirt the Constitution.

If one views politics as partisan warfare, these tactics make sense and may even work. If one sees politics as the art of compromise to achieve bipartisan goals, these tactics may backfire.


There’s a new word in the vocabulary,

Known inside the health care constabulary.

That word goes by the shorthand name of ‘“quants,”

It’s familiar to all data savants

“Quants” are above all else numbers nerds,

who believe you can’t measure things in words.

Quants think of themselves as value visionaries,

as evidence-based, leverage-lifting emissaries.

Among those versed in computers,

they are the only square shooters.

To quants anything vaguely mathematical

Beats anything verbal or alphabetical.

Sunday, May 17, 2015

Political Malpractice – A Matter of Opinion

In a crisply written 11 page working paper “A Physician’s Opinion Regarding Political Malpractice: The Origin of Medical Cost Inflation, HMO Rationing, and ObamaCare Cartel Controls,” Robert Geist, MD, a St. Paul, Minnesota, retired urologist and medical political activist, describes the evolution of modern health care “cartels”, which are replacing medical professionals as arbiters of health care.

Geist separates the transition from a professional to a commercial medical market place into 2 time periods.

One, 1973 -2010, when HMOs and other managed care entities took hold, matured, and sought to control the unrelenting cost inflation ushered in after Medicare was enacted in 1965.

Two, 2010 and thereafter when the federal government under ObamaCare and CMS transformed the health system into a series of cartels led by the managed care industry, insurers, hospitals, and Accountable Care Organizations.

A cartel is defined at an international combine to regulated and prices and output.

According to Geist, cartels were formed for three “evidence-free” reasons.

To remedy “poor quality care” (too much, too little, too varied”) brought on by greedy providers driven by the lure of lucrative fees-for-services.

To contain rising costs through corporate gatekeeping and through capitation and other payment reforms.

To reward physicians through cost sharing of savings and other rewards in the name of conserving society’s scarce resources.

From Geist’s perspective, this process, though well-intended by managed care executives and federal policymakers, has led to system failures , incessant reforms, higher costs, poorer quality, lesser access, and public turmoil, physician servitude, and power and merger mania among institutional leaders.

One Way Out

Geist concludes one way out of this government and managed care-induced turmoil is a decentralized medical market place though such mechanisms as health savings accounts, patients empowered choice, and free market health care.

Geist’s conclusion reads.

“It was political malpractice to ignore ordinary economic principles of supply and demand when the U.S. government wrote prescriptions for the nation’s medical sector that caused the abrupt onset of tax-subsidized demand inflation after 1965 and created the futile managed care rationing-of supply panaceas to control it.”

“Resolving public-corporate threats to patient care, clinic viability, and professional integrity would require political action to write a prescription for a new medical market place, where the consumer is king and money (instead of politics) is used to distribute goods and services.”

“Chances are that this new prescription would make medical care and its catastrophic care affordable to all Americans.”

A nice throught, but unfortunately, the chances of removing politics from the medical care cost equation, approach zero.

If you would like to read Doctor Geist’s paper in its entirety, contact me at Doctor., and I will forward it to you.
The Cracked ObamaCare Crystal Ball

The trouble with crystal balls is that they are made of crystal - a fragile and breakable material.

Ask Nancy Pelosi - the minority leader in the House of Representatives.

Back in 2010, Pelosi said Congress had to pass ObamaCare to find out what was in it, it would become immediately popular, it would quickly generate 400,000 new jobs, and that would lower costs, improve quality, and make for better access.

Later in 2014, she said ObamaCare would not hurt Democrats in the midterms.

Now in 2015, Pelosi is saying if the Supreme Court rejects federal subsidies, “What is the GOP going to do, take away subsidies from the federal health exchanges…that would be really bad news for the Republicans.”

She has a good point. But Pelosi is not a reliable soothsayer. Her crystal ball could be cracked again.

Maybe the GOP can come up with a popular, acceptable alternative to ObamaCare. Maybe the alternative will extend care more than the 4% ObamaCare has converted from uninsured to insured. Maybe it will cost less in premiums and deductibles for more of the people more of the time. Maybe it will offer more choice. Maybe it will cost taxpayers less. Maybe it will shrink rather than expand government.

These are big Maybe’s, but maybe an alternative is worth a try. The alternative will have to answer the questions of what and why and when and how and where and who. And the alterntive will have to serve special interests and general interests and make them compatible . Maybe this can be worked out. Maybe not.

As Adam Smith (1723-1790) foresaw in the Wealth of Nations, those who work in their own self-interests are often the “invisible hand” that promotes the public interest. That is the essence of a capitalist economies. Maybe these economies will prove superior to socialist economies in productivity, as they have in the past.

Friday, May 15, 2015

Value (outcomes/cost) for Members, Investors, Customers

The following list reflects my belief in what health care organizations work most effectively in the capitalistic U.S. society. The list is based on the organizations' scale, capital-support, ability to mobilize technology and specialists, public acceptance, management and marketing skills, record of innovation and entrepreneurship, and financial performance

American Medical Association - C- to D+

American Hospital Association - B to B+

ObamaCare - C- to D+

United Health Care - A- to B+


Accountable Care Organizations – C-

Physician Hospital Organizations - D-

Independent Medical Practice - C+

Retail Clinics with Nurse Practitioners - B

Urgent Care Clinics. Doctor-Led - B+

Integrated, Dispersed Care Organizations with ownership of health plans, physicians, and hospitals- B+

Outpatient Ambulatory Care Specialty Clinics - A-

HMOs and PPOs - C-

Health Savings Accounts - B, evolving

Concierge/Direct Pay - B, too early to tell

Electronic Data Firms - B to B+

Trickle-Down Economics, Pros and Cons

Cut taxes, regulations and capital gains.

Remove burdensome economic chains,

A rising tide, claims the GOP,lifts all boats.

And it pleases and gains middle class votes.

Everybody will end up prospering,

Overall well-being you’re fostering.

It’s all those good economic things

That solid prosperity always brings,

High employment,

Life enjoyment.

Growing net worth,

Money in your purse.

Ridiculous, say Democrats unanimously,

Obscenely often unceremoniously.

Money will remain in pockets of the rich,

The poor will stay in the poverty ditch.

Never, never, never trust the affluent.

They will treat you like common sediment

Nonsense, aver the GOP, free market capitalism

historically always beats socialism,

It’s as simple as ABC,

A is for Austerity

B is for Bureaucracy,

C is for Coercive-Dependency.

Your trickle-down views depend on your bias.

Prejudices, you see, are what define us
Is Doctor Price Right on ObamaCare Replacement?

The real price of everything is the toil and trouble of acquiring it.

Adam Smith, The Wealth of Nations

Tom Price, MD, is a 61 year old orthopedic surgeon. He represents Georgia’s sixth Congressional District. He has been in the House of Representatives for 10 years. Price is a pro-growth Republican. He has just replaced Paul Ryan as chairman of the House Budget Committee. His medical experience includes running an orthopedic clinic at Grady Memorial hospital and serving as assistant professor of orthopedic surgery at Emory medical school. Based on this experience, does his plan to replace ObamaCare have merit?

Price is now in the news because he has introduced the Empowered Patient First Act as a replacement for ObamaCare. This is the first GOP bill officially introduced as a possible replacement for ObamaCare in anticipation of the Supreme Court’s June decision on federal health exchange subsidies.

In essence, the Price bill (one of the 55 he has backed during his 10 year House career) contains these components.

Repeals ObamaCare.

Creates refundable tax credits based on age ($1200 for 18-34 year olds, $3000 for those over 50, $900 for each child up to 18, and $1000 tp put into Health Savings Accounts for routine care.
Allows patients to opt out of Medicare, Medicaid, and VA programs.

Allows interstate health care commerce.

Expands Health Savings Accounts.

Reforms malpractice.

There is more to Price’s bill than these key factors, and you may wish to read about it more at length at Philip Klein, “Top House Republican Unveils Replacement Plan for ObamaCare,”Washington Examiner and Real Clear Politics, May 14, 2015).

Wednesday, May 13, 2015

Left to Its Own Devices – Democrats and Supreme Court

What will happen if Supreme Court rules in favor of federal subsidies?

No one seems to have considered this development, which seems more and more likely.

Will ObamaCare march on unmolested with more people receiving subsidies. more enrolling Medicaid , more taxes and regulations, and more government control of the health system?

Will the state health exchanges, in deep financial trouble, convert to federal health exchanges?

Will Democrats, already turning further to left at the prodding of Senators Elizabeth Warren of Massachusetts and Bernie Saunders of Vermont, with Hillary Clinton following their lead, go on to electoral triumphs in the Senate and Presidency?

Will chastened Republicans, dig in their heels and redouble their efforts to repeal ObamaCare or take down its two main pillars – the individual and employer mandates?

At this stage a month before the Supreme Court decision, we simply don’t know. The Obama administration is mum on the subject. It maintains an adverse Court decision is unthinkable and no Republican alternative would be humane or workable.

If the left is left to its own devices, it will either do what it wants to do, or what its deviciveness and the voters allow it to do.

Tuesday, May 12, 2015

What’s Fair –Rule of Law or the Human Consequences?

Kaiser Health News today features this headline –“ Only 1 in 10 Are Highly Confident the Supreme Court Can Rule Fairly. “

The report cites an Association Press poll,

“ The Associated Press-GfK poll finds only 1 person in 10 is highly confident that the justices will rely on objective interpretations of the law rather than their personal opinions. Nearly half, 48 percent, are not confident of the court's impartiality. (Alonso-Zaldivar and Swanson, 5/9).”

The public’s concern is this: because of its conservative majority, the Court may be biased, may rule against federal subsidies in 37 states, and may hang an estimated 7.5 million subsidized citizens out to dry, unable to pay for health care.

This is a valid concern. All Republican alternative bills now in the legislative mill address this by promising a transitional period of a year of hear and a half during which effected citizens would be subsidized in one way or another.

In an article published in multiple newspapers, Grace-Marie Turner, president and founder of the Galen Institute, a conservative think tank asserts:

“Supporters of the ACA are using scare tactics, saying millions of people would lose their subsidies and likely their health insurance if the court decides the IRS rule is illegal. They say Congress won't act and states either can't or won't set up their own exchanges.”

And yet, she adds,

“Congress is making plans now to pass legislation after the Supreme Court issues its decision, likely in June. The proposed legislation would create a safety net so people wouldn't lose their current coverage and also would allow them to use their subsidies to select any policy approved by a state.”

Turner says,”GOP committee members in the House and Senate‘are committed to protecting Americans harmed by the administration's actions’ and to giving states the freedom and flexibility to create better, more competitive health insurance markets offering more options and different choices.’ “

This may be, but it skirts the fundamental question; What is fair if the Court rules against ObamaCare – the Rule of Law or the human consequences?

Secondary questions are: Who should administer subsidies – federal government or state governments? Should the ruling give everyone a “fair shot,”equal outcomes, to use President Obama’s language? Does it mean government can take away the haves’ and give to have not’s? Can government determine who gets what? Should conservatives or progressives decide? What is more important – social justice or economic growth? Who is the fairest of them all?
Consumer Serfdom and Government Turfdom

As I read Robert Pear’s article “White House Moves to Fix s Key Consumer Complaints about Health Care “ (New York Times, May 8, 2015), I thought of Friedrich von Hayek (1899-1992).

The two main consumer complaints are: one, inaccuracies of insurance plan doctor network directories, making it hard for consumers to find doctors who can cover them; and two, the unexpected costs not covered by their plans.

The government solutions are : one, having insurers update their directories monthly or pay a $100 fine per day; and two, creating an “out-of-pocket calculator, “ so consumers could calculate the cumulative costs of premiums, subsidies, co-payments, deductibles, and out-of-pocket costs, many of which were proving to be surprisingly and unpleasantly high.

I thought of Friedrich von Hayek (1899-1992), patron saint of conservative economists and a social philosopher. Hayek wrote The Road to Serfdom in 1944. It was published in Great Britain where he was residing.

In his book, Hayek warned that government control of economic decision-making through centralized planning rarely worked in the marketplace and led to loss of freedom and economic serfdom. He said government could not control or account for the billions of marketplace transactions as efficiently and effectively as consumers buying and bargaining with sellers in that marketplace.

I thought of what happened in Britain two days ago when voters robustly rejected the Liberal Party. The Liberals favored higher taxes on the rich, tighter regulations, and more social spending. These are among the hallmarks of ObamaCare. Will the 2016 U.S. elections repeat the British experience? Will ObamaCare even be an issue? In the digital era, can Washington control or account for everything health care consumers do and pay for in the health care marketplace? Will the government control over the health care turf, empowered by computer advances and imaginative software nerds, reduce consumers, physicians, and health plans to government serfs? Or will digital delineations of financial exchanges empower them through knowledge of transactional transparencies ?

I think not. Voters, as health care consumers, have ways of adjusting to commonsensical realities. One of these ways is to vote out the central planners. Another is to deal directly with health care providers, and to leave third parties out of the market equation.

Saturday, May 9, 2015

Lay of ObamaCare Land

It’s speculative but it’s beginning to look like the Supreme Court will uphold federal health care exchange subsidies. Seventy five percent of hospital executives expect subsidies to stick, and Karl Rove, the Republican strategist, is predicting the Court will rule in favor of subsidies.

Hospitals favor subsidies because the exchange subsidies reduce uncollected bills from the uninsured. Furthermore, health exchanges have spurred Medicaid enrollments by 12 million or so, again with reduction of unpaid hospital bills.

Rove is conceding that an unfavorable Court ruling would hurt the GOP by making them look heartless at the plight of an estimated 7 million stripped of their subsidies. Rove may also be thinking that the GOP House and Senate will be unable to come up with an alternative plan to supplant ObamaCare.

At this point, just over a month before the Court rules, there’s much we don’t know about ObamaCare. How many have actually enrolled? How high will premiums in individual markets rise? Will much will it cost government to bail out insurers if enrollment stalls and the young and healthy don’t sign up? How much will taxes jump for the middle class? And how will voters react in the 2016 elections?

What we do know are these facts. The rate of uninsured has dropped by roughly 17% to 12%. In an average of Real Clear Politics national polls, the public still opposes ObamaCare by 52.3% to 42.0%. The majority of the public wants ObamaCare fixed but not repealed. The physician shortage continues to grow, e.g. in Texas 35 counties have no primary care physicians, 185 counties have no psychiatrists, and 158 have no general surgeons. Medical schools have vowed to increase graduates by 30%. There are signs bipartisanship is rearing its pretty head with Congress overwhelmingly agreeing to a “doc fix” with shutting down of the flawed Sustainable Growth Rate formula and replacing it with a 1.5% annual increase in physician Medicare payments.

Friday, May 8, 2015

Medicine’s Future: Certainties and Instantneities

If a man will begin with certainties, he shall end in doubts; but if he is content to begin with doubts, he shall end in certainties.

Francis Bacon (1561-1626), The Advancement of Learning (1605)

Only two things are certain about medicine’s future: One, it will be digitally and data-based. Two, it will rest on instantaneous online information.
There are other certainties as well:

• Health care organizations, with the capacity to integrate clinical and financial information, will dominate.;

• the strength of these organizations will reside in their ability to produce “value”- better outcomes for less dollars;

• artificial intelligence, sometimes dubbed “computer cognitive skills, “ will make it possible to evaluate a person’s state of health and stage of disease at the point of care.

• virtual visits, as opposed to face-to-face, patient-to-physician visits, via telemedicine will be in vogue as a means of reducing costs, fostering consumer convenience, and erasing geographic barriers to care.

After having pointed out these certainties, I have my doubts that the digital revolution, so beautifully described in two 2015 books, The Patient Will See You Now: The Future is Your Smart Phone , Eric Topol, MD, Professor of Genomics at Scripps , and Robert Wachtner, Jr. , Professor of Medicine at the University of California in San Francisco, The Digital Doctor: Hope, Hype, and Harm at the Dawn of Medicine’s Digital Age.

Both authors rank high among medical innovators,. They say digital medicine will transform medicine in fundamental ways and will level the playing field between patients and doctors by making information instantaneously available at a click of the mouse or a flick of a digit.

I have my doubts about the certainty of digital medicine transforming medicine for the better. To begin with, not all consumers are Internet- comfortable or competent. Secondly, there are privacy and identity security concerns, with no absolute protections against hackers. Thirdly, instant access through such sites as Facebook, Twitter, and Instagram creates cultural, political, and economic dilemmas and dislocations, as outlined in The Internet is Not the Answer(Atlantic Monthly Press, 2015). Fourthly, it is hard to distill the massive waves of information into human terms. And lastly, I believe the time is rapidly approaching when people will yearn for the good old days of simple doctor-patient interaction, direct charges for discreet fee-for-service individual services, and episodic personal care when needed or requested out-of-sight, off-line.

Hallmarks of technological change, creative destruction and disruptive innovation, may be best for most, but they leave victims in their wake. Most may endorse certainties and instant analytical documentation but others prefer conservative doubting and personal interactions. Tincture of time may be better than speed and promise of change.

Thursday, May 7, 2015

Cure for Cancer: It’s Elementary, My Dear Watson!

“Excellent!” Watson said.

“Elementary, “ said Holmes.

Sir Author Conan Doyle (1859-1930), The Crooked Man

Sherlock Holmes never said, “Elementary, my dear Watson!” But never mind.

What’s important is the gist of what he said and what’s happening now. Fourteen major cancer centers have teamed up with IBM’s supercomputer, Watson, to pursue and win the race against cancer. And it’s always a race, to kill the cancer before the cancer kills the patient.

And why not? If IBM’s Watson can win at chess against the world’s best chess masters and beat Jeopardy winners, why not try to cure cancer by near instant analysis of the a cancerous tumor’s genome and scouring of the world’s medical literature to find out what works ? Why not use “cognitive computing” to solve cancer’s mysteries? Why not treat IBM’s Watson as a “capable and knowledgeable colleague ,” to use an IBM’s executive phase?

Finding the answers to these question is the basis for a statement in President Obama’s statement in his January 20, 2015 State of the Union address.

“Tonight, I’m launching a new Precision Medicine Initiative to bring us closer to curing diseases like cancer and diabetes – and to give all of us access to the personalized information we need to keep ourselves and our families healthier.”

In the words of Francis Collins, M.D., Ph.D, of NIH, and Harold Vrmus, M.D. of the National Cancer Institute,

“With sufficient resources and a strong, sustained commitment of time, energy, and ingenuity from the scientific, medical, and patient communities the full potential of precision medicine can ultimately be realized to give everyone the best change at good health” ( “A New Initiative on Precision Medicine,” New England Journal of Medicine,” February 26, 2015).

And while we’re waiting fo the cure, keep these words in mind “cognitive computing,” “DNA-genetics,” and “personalized precision medicine.” The words may signal the future of health care. And with the help of 14 major cancer centers, it may become a reality quicker than you think.

Wednesday, May 6, 2015

ER Visits Climb Under ObamaCare

The best laid schmes o’ mice and men

Gang aft a’gley

Robert Burns 1759-1796, To a Mouse

It wasn’t supposed to be this way. Under ObamaCare, more people would be insured, and they would no longer have to go to the ER. They could go to their primary care physician and skip those notoriously overcrowded ERs.

It hasn’t worked out that way. According to a report of The American College of Emergency Physicians, 2,099 of the doctors said ER visits are at an all time high: 28% reported visits have greatly increased, 47% slightly increased, 17% the same, 5% slightly decreased, and 0% no change.

Federal policy makers overlooked a number of crucial factors, as seen through the eyes of patients.

· 1. A growing shortage of primary care physicians with overloading practices in those who remain.

· 2. Delays, sometimes for weeks or months, in scheduling a primary care or specialist visit.

· 3. A tendency among medical practices to being open only during working hours and closed on weekends.

· 4. Public knowledge that hospitals were legally obligated to be open 24 hours a day and to receive and treat all comers.

· 5. An understanding among patients that ERs had the equipment and the spectrum of specialists to handle almost any contingency.

· 6. The trend among primary care physicians to not accept or to see fewer Medicare, Medicaid, and uninsured patients.

· 7. The historical pattern of uninsured or under-insured patients to go the ER first because that is what they had always done.

· 8. The insensitivity of insured patients to costs because they believe their insurance will pay no matter what the cost.

· 9. The belief that when it comes to one’s health or one’s illness or complaint, money is no object.

· 10. The reality that were no financial or economic penalties for not going to the ER.

· 11. The false promise of ObamaCare – that if you had a Medicare, Medicaid, or health exchange plan that if you went in these programs, you had access to primary care physicians.

The spikes in ER visits ran counter to one of the goals of the health reform law. The law was designed to reduce pressure on ERs by getting more people insured through Medicaid or subsidized private coverage and providing better access to primary care (Laura Ungar and Jayne O’Donnell, “Contrary to Goals, ER Visits Rise Under ObamaCare,” USA Today, May 4, 2015)

Tuesday, May 5, 2015

Twelve Obama Messes

Critics are having a field day itemizing the messes President Obama may leave behind when he leaves offices. Democrats retort these messes can be traced to the depth of 2008 Republican recession, the GOP’s unwillingness to cooperate with the President, and negative global economy and terrorism, both of which are bey9=ond Obama’s control.

Whoever is responsible in this blame shifting exercise, these messes loom on the 2016 horizon.

One, if the Supreme Court rules against federal subsidies in June , Republicans will have to find a way humanely deal with the estimated 6.5 to 7.5 million who would lose their subsidies.

Two, those who don’t comply with the individual mandate and buy a health plan will have to pay an average penalty of $1,130.

Three, the ObamaCare policy that all plans must include 10 essential benefits raises premiums and deductibles for the non-subsidized.

new more expensive policies meeting ObamaCare compliance standards will require more people to go onto subsidies.

Five, employers will place more employees on part-time to avoid $2000 penalties for not covering employees.

Six, the U.S. economy has experienced low economic growth, barely over 2% since the recession ended, compared to all previous recessions since World War II, in which GDP growth averages 3% to 5%.

Seven, the job participation rate is the lowest since 1978.

Eight, the quality of jobs has plummeted, with 6.6% now working part-time, a 46% rise since 2007.

Nine, the number of small businesses closing, merging, or declaring bankruptcy exceeds the number of new business startups.

Ten, the size of the average paycheck has gone from $54,059 to $51,838 during the Obama presidency.

Eleven , the national debt continues to balloon, with the magnitude of the Obama debt exceeding that of all previous presidents combined.

Twelve, lack of entitlement reform may result in these federal programs running out of money: Social Security Disability Trust in 2016, Medical Hospital Trust 2030, and Social Security and Survivor Trust 2032.


Grace-Marie Turner, “Cleaning Up ObamaCare and Other Obama Messes, “Forbes, April 28, 2015.

Karl Rove, ”The Messes Obama Will Leave Behind, “ Wall Street Journal, April 30, 2015.

Sunday, May 3, 2015

The ObamaCare Story: A Work in Progress

I’ve been working on a book The ObamaCare Story, based on 2500 Medinnovation blogs I’ve written over the last 6 years.

It’s a hard book to write. There’s no beginning and no end. Health care inequities were brewing before Obama became president, and inequities will not end with the Supreme Court decision on the legality of federal subsidies in late June, or when Obama finishes his second term. Individual inequities, deemed “social injustices” by some, are part of the human condition. Always have been. Always will be. To paraphrase George Orwell, some people are more equal than others.

With an ObamaCare book, there is too much to think about , too much to write about. There are too many unanswered questions. too many failed solutions, too many philosophic and ideological points of view.

Is a compassionate socialistic government the answer? Not if you consider Europe’s economic stagnation, or the inner city riots after we pumped $22 trillion into the war of poverty since 1965. Is unbridled American capitalism with attendant prosperity the solution? Not if you consider the fact that 30 million Americans remain uninsured. Quasi-socialism, ObamaCare style, isn’t working very well, if you ask the American middle class. And quasi-capitalism, Republican style, has yet to be tried for health care and is met with massive skepticism on the left.

The upcoming June Supreme Court decision illustrates the problem. If the court affirms ObamaCare’s right to subsidize the poor and quasi-poor, controversies over the unworkability of the health law with its redistribution of wealth and soaring national debt will continue. If the court rules against federal subsidies, what will the Republicans do about those 7.5 million poor folks left without subsidies? Extend the subsidies? Replace the subsidies with tax credits? Lower taxes for all and hope a resurgent economy with more federal revenues will repair the safety net and finance the have-not’s?

There are other unanswered questions as well.

Will technology, which has upended the economy and arguably contributed to unemployment by replacing humans with machines save us from ourselves?

Will technologism replace humanism, or will they be complementary and supplementary?

Will mass aggregations of health care data show us the path to lower costs, higher quality, and better outcomes?

Will robots posing as doctors, telemedicin ‘s virtual visits be superior to real human- to-human physical visits with doctors?

Are doctors working in teams, backed by evidence-based algorithms, better than individual doctors using clinical judgment based on experience and real-time interaction with patients ?

Can patients, empowered by iphones and endless streams of on-line health information, be relied upon to make the right decisions for themselves?

Is government, even with its teams of policy experts and access to reams of population data, be trusted to guide the right decisions, at the right time, for the right reasons at the point of care of billions of patient-doctor encounters without violating the patient’s privacy or the doctor’s pledge of confidentiality?

Should health care be directed from the top-down, from Washington. D.C, or from the bottom-up, by those in the health care trenches or those in integrated health organization’s executive suites?

These are just a few of the tough questions that make the ObamaCare story so hard to write. The ObamaCare story and its sequel will always be a work in progress, a struggle between progressives and traditionalists, with no clear answers in sight. Is ObamaCare "fair for all", or is it merely a "free for all" fairy tale.

Friday, May 1, 2015

An Example of “Value” in Joint Replacements

"Value" is defined as the health outcomes achieved for patients relative to the costs of achieving them. It is the only goal that can guide strategy in health care, the only “true north” that can resolve the difficult choices organizations will need to take.

Michael Porter, Ph,D, and Thomas H. Lee, MD, “Why Strategy Matters Now,” New England Journal of Medicine, April 30, 2015

One of the functions of this blog is to make the abstract concrete by using examples. Translating the meaning of “value” in clinical affairs to a health care reality is such a function.

Reducing costs and improving outcomes of joint replacements in hospitals is such an example. How this can be done has been shown at Baptist Health System in San Antonio, which owns 5 hospitals. The system saved over $1 million in a year for hip and knee replacements by bundling Medicare payments into one reduced 3% payment covering everything from physician fees, to nursing, to anesthesiology fees, to post-op nursing home care to readmissions, to anything that happened within a month after surgery. If savings occurred, the hospital system and the orthopedic surgeons shared the savings. For a surgeon doing 35 procedures a month, this amounted to $21,000("An ObamaCare Payment Reform Success Story- One Health System, Two Procedures," Kaiser Health News, April 30, 2015).

These savings were achieved through a series of measures: standardizing the cost of artificial joint devices by selecting one joint device, lowering costs of blood thinning drugs and compression stockings, have post-op therapy performed at home rather than in nursing homes, getting patients active quicker, reducing use of physical therapists.

The results of these combined efforts, planned at joint meetings of hospital executives, nurses, and physicians – was shorter hospital stays, reduced use of nursing facilities, increased savings for Medicare, and profit-incentives through shared savings for the hospital system and orthopedic surgeons. There were losers as well – nursing facilities and physical therapists.

This is an example of what can be done through the combined efforts of a hospital organization and its providers. According to Michael Porter of Harvard Business School and Thomas Lee of Harvard Medical School, “A provider organization decides that it will compete for orthopedic patient volume by creating a tightly organized team(integrated practice unit) to deliver care in a lower-cost setting and by negotiating bundled-payment contracts with major employers and payers.” These payers and employers may be Medicare, insurers, or self-funded employers.
State Exchanges Struggle As They Await Supreme Court Decision

Because of balky IT technologies, expensive call centers, and slow enrollment, 17 state exchanges are struggling to survive as they wait late June Supreme Court ruling on legality of federal exchanges. The 17 exchanges (16 states and D.C) include Washington, Oregon, Idaho, California, Nevada, Minnesota, Kentucky, Colorado, New Mexico, Massachusetts, New York ,Maine, D.C., Rhode Island, Connecticut, and Vermont. The state exchanges were supported by $5 million from the federal government, but those funds are run out. Of the 11.6 million enrolled in all exchanges: 2.6 million came from state exchanges ( 12% growth) and 8.8 million were from federal exchanges (61% growth). If the court decides federal exchanges were illegal, and federal support is not forthcoming, the state exchanges will have a few options, including; one, continuing to support unsustainable state-run exchanges; and two, going out of business.

Source: “Nearly Half of ObamaCare Exchanges Struggle As Woes Grow,” Washington Post, May 1, 2015)