Wednesday, October 22, 2014

Eight Business ObamaCare Penalty Escapes

We cannot escape history.

Abraham Lincoln (1809-1965)

Firms Try To Escape Health Penalties.

Anna Mathews and Julie Jargon, title of WSJ front page article, WSJ, October 22, 2014.

When the history of ObamaCare is written, it will record that American businesses sought multiple ways to escape the $2000 penalty on businesses.

The penalties were supposed to start this year, but for political reasons, the Obama administration delayed them until after the November midterm elections for firms that employ 100 people or more.

Small businesses, which employ over 90% of Americans, say the health law penalties retard employment of full-time workers and cut profitability, especially for firms with primarily low-wage workers.

There are basically eight ways to avoid health law penalties.

• One, hire fewer full-time workers.

• Two, hire more part-time workers, working less than 30 hours a week, and not offer health care benefits.

• Three, push full-time workers into Medicaid, which state and federal governments jointly fund, and for which the employer pays no penalty.

• Four, offer bare bones, or “skinny” plans, that cover preventive care but exclude major benefits like hospital care.

• Five, hire part-time workers when full-time workers leave.

• Six, offer workers Health Savings Accounts plans with high deductibles which encourage workers to pay out-of-pocket to meet deductiblea.

• Seven, stop enrollment in plans of spouses, families, and domestic partners.

. Eight, don't expand.

Some cynics say the Medicaid switch is part of the ObamaCare strategy to use Medicaid expansion as a prelude to a universal single payer system.

Others say shunting patients into Medicaid is shifting people into a substandard care system, in which delays are legendary and in which only 45% of doctors are now accepting Medicaid patients (Jeffrey Singer, MD, “ ObamaCare Shunts My Patients into Medicaid, “ WSJ, October 21, 2014).

Ultimately, patients will learn their costs are increasing NS their care is suffering , albeit in the name of increased “health care coverage.”

In the end, the Medicaid shift may backfire on employers and government.

As Abraham Lincoln explained, “ If you once forfeit the confidence of your fellow citizens, you can never regain their respect and esteem. It is true that you may fool all the people some of the time’ you can even fool some of the people all of the time, but you can’t fool all of the people all of the time.”

(Doctor Reece, author of over 3600 Medinnovation blogs over the last 7 years, with over 2.1 million readership views, is available for speaking engagements on the future of health reform. For more information, call 1-860-395-1501 or write doctor.reece@gmail.com)
The Choice

The difficulty in life is the choice.

George Moore (1851-1933), The Bending of the Bough

Whether Americans know it or not or appreciate it or not, the November 4 midterms offer a choice.

Depending on your philosophy or ideology, the choice may be between.

• Economic growth and Economic Stagnation

• Prosperity and Social Justice

. Free Enterprise and Government Regulation

• Equal Opportunity and Equal Results

• Promises and Performance

• Lifting All Boats and Mooring All Boats

• Ethnology and Homogeny

• Self- interest and Public-Interest

• Reality and Rhetoric

• Facts and Feelings

• Objectivity and Subjectivity

• Magic and Illusion

• Concreteness and Abstraction

• Liberalism and Libertarianism

• Ayn Rand and Barack Obama

You know about Obama, but you may not know Ayn Rand. Ayn Rand (1905 – 1982) was a Russian-American novelist, philosopher, playwright, and screenwriter. She is known for her two best-selling novels, The Fountainhead and Atlas Shrugged, and for developing a philosophical system she called Objectivism. Born and educated in Russia, Rand came to the United States in 1926. She achieved fame with her 1943 novel, The Fountainhead.

In 1991, the book-of-the-month club conducted a survey asking people what book most influenced their lives. The Bible ranked number one and Ayn Rand’s Atlas Shrugged number two. In 1998, the Modern Library did another survey was based on more than 200,000 votes cast online by anyone who wanted to vote. The top two on that list were Atlas Shrugged (1957) and The Fountainhead (1943).

The two novels have had six-figure annual sales for decades, running at a combined 300,000 copies annually during the past ten years. In 2009, Atlas Shrugged alone sold a record 500,000 copies and Rand’s four novels combined sold more than 1,000,000 copies.

Among the intellectual cognoscenti, Ayn Rand is best known for philosophical theory of Objectivism. It states that the proper moral purpose of life is the pursuit of rational self-interest. She maintained the only social system worth considering is the full respect for individual rights as embodied in laissez faire capitalism, and objective reality is the only true measure of success.

The worlds of academia and progressive politics reject Objectivism as inhumane and socially unjust. But capitalists and conservative thinkers believe Objectivism explains why America is the most affluent and innovative nation on Earth, and why it has a certain “magic” that makes it such a magnet for immigration and risk-taking entrepreneurs ( Charles Murray, The Magic of America: How Ayn Rand Captured the Magic of America ( Federalist, October 16, 2014).

One can argue the merits of Ayn Rand’s philosophy whether capitalism is the most successful social system or whether it has a certain entrepreneurial magic. One can debate whether Adam Smith of the 1776 Wealth of Nations fame holds the key to social progress and can improve your life (Russ Roberts, How Adam Smith Can Change Your Life, Portfolio, 2014). One can even postulate that capitalism, with its doctrines of economic empowerment and entrepreneurship, is the capitalistic cure for poverty, terrorism, and epidemics (Hernando De Soto, ” WSJ, October 11-12, 2014). But one cannot deny that Ayn Rand is a inspirational novelist that has captured the imagination of millions of people.

One of these people is Josh Umbrecht, MD, a concierge physician in Wichita, Kansas. Umbrech named his three person medical group, the Atlas Medical Group because he admires Ayn Rand. Here is an excerpt of the interview I conducted with Doctor Umbrecht.

Q: “ I read you came to this model, because one or all of you had read Ayn Rand’s 1957 book, Atlas Shrugged, and you adopted her philosophy as your philosophy. Indeed, so much so, that you named your practice “Atlas MD.”

A: Yes, we all have read her book. I have read it 11 times. Her philosophy is “Objectivism,” that the science of economics has objective answers that you can be logical and thoughtful about. Her book is a justification of capitalism that brings the most protection to the individual. Money is the root of all this is good. It a a voluntary exchange of goods for all parties involved. The love of money is to love what is good.”

When voters go to the polls on November 4, they will be voting, among other things, on whether they agree with President Obama’s philosophy of big government with its makeover of American capitalism and its health system or whether they approve of Ayn Rand’s philosophy of laissez faire capitalism with individual choice. President Obama has said repeatedly that his policies are on the ballot. So are Ayn Rand’s.

(Doctor Reece, author of over 3600 Medinnovation blogs over the last 7 years, with over 2.1 million readership view, is available for speaking engagements on the future of health reform. For more information, call 1-860-395-1501 or write doctor.reece@gmail.com)

Tuesday, October 21, 2014

Election Indignation

I would rather remain with my unavenged suffering and unsatisfied indignation, even if I were wrong.

Dostoevski (1821-1881), Brothers Karamazov

Even if I am wrong, I believe indignation will drive midterm election results. Voter indignation is strong displeasure at political and economic results deemed unworthy, unjust or base. The elections will reflect righteous indignation at what’s happening to the world and to themselves.

In the U.S. results will signify indignation of the middle class, who will express their displeasure at the collapse of their incomes, at the redistribution of their wealth and health benefits, at their inability to find good jobs, at the rising income inequality between the middle and upper classes, at the perceived favoring of the non-white minorities over the white majorities, and at governmental incompetence.

It will be indignation that accounts for white men and married women voting Republican. It is indignation that drives the Tea Party. It is indignation for the white middle class being called bigots for defending the police, for being offended for calling for voter ID, for being accused of conducting a war on women, for calling the IRS targeting of conservatives scandalous, for questioning the handling of Benghazi, the Iraq withdrawal, the ISIS victories, the lack of an Ebola travel ban.

In health care, it is indignation about health plan cancellations, broken promises about keeping your doctor and health plan, rising premiums, soaring deductibles, and omnipresent co-pays, the botched federal health exchange website, the negative affect of ObamaCare on full-time hiring, difficulties in finding doctors that will accept you or your health plans.

The list goes on. It is not fun being called prejudiced when you are down and out and concerned about providing for yourself and your family because of your social class or the color of your skin.

Right now the tunnel is dark. But there is light at the end of it. With the election and events beyond, illumination will come. Economic growth will resume, the Keystone Pipeline will flow, gas prices and heating costs will drop, tax reform will occur, Ebola will be contained, ISIS will be slowed, politicians are both sides of aisle will learn lessons, civil wrongs will be righted, and the magic of the American brand of capitalism will continue to attract the huddled masses and lighten their health and economic burdens.

I may be wrong , but as an optimist I see the doughnut, not the hole. I predict the bright lights of imagination and innovation will put indignation in the shade, where it belongs.

Monday, October 20, 2014

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Why Doctors Need Stories: In An Era of Systematic Clinical Research, Medicine Still Requires the Vignette

Title of New York Times Sunday Review essay, by Peter Kramer, Clinical Professor of Psychiatry, Brown University, October 19, 2014

Doctors practice in an era of Big Data, where anything and almost everything can be reduced to a data set, as expressed in an algorithm, protocol, arithmetic trend, and meta-analysis.

The last 20 years has been an era, according to Dr. Kramer of Brown University Medical School, in which “clinical vignettes have lost their standing. For a variety of reasons, including a heightened awareness of medical error and a focus on cost cutting, we have entered an era in which a narrow, demanding version of data-based medicine prevails.”

This is unfortunate, says Dr. Kramer, “ The vignette, unlike data, retains the texture of the individual life.” That is why Kramer assigns only case vignettes for psychiatric residents in training. Vignettes, or case studies, have long been the mainstay for teaching in academic medicine, as indicated by the enduring popularity of a Case Study in the New England Journal of Medicine.

According to NEJM, “Data are important, of course, but numbers sometime an order to what is happeing that can be misleading. Stories are better at capturing a different type of ‘big picture.’”

Narratives and anecdotes have a story-telling power that data sets can never duplicate. I became acutely aware of this power two years ago when I visited an ophthalmologist. He was resisting the implementation of an electronic medical record system in his office.

He groused, with words to this effect, “ I get these data summaries from other doctors, and I can’t make heads or tails of why they sent the patient. The EMRs don’t tell a story. They are a mumbo jumbo of numbers and leave me cold. I’ll be damned if I’ll waste my time entering data or investing in staff to enter that data.”

I share with you this personal vignette , even though the story is anecdotal, and therefore suspect in the modern era of Big Data and Data Sets. The vignette illustrates the graphic reasons why in a physician survey, 40% of 20,000 clinicians, 85% of whom had EMRs, thought EMRs decreased efficiency while only 24% felt EMRs enhanced efficiency (“ Physician Foundation Poll of 20,000 Physicians," Medinnovation Blog, September 24, 2014).

Clinical judgment requires narrative, as well as data.

Evidence-based medicine, while essential, is only half a patient’s story.

A clinical data set, after all is said and done, is nothing but a collection of related information composed of separate elements that can be collected by a computer, but must be interpreted by a doctor.
Health Exchanges: No Free Lunch

There is no such thing as a free lunch.

Milton Friedman (1912-2006), Conservative economist

I recently did 12 interviews with participants in direct pay independent practices for my book Direct Pay Independent Practice – Medicine and Surgery (Kindle, Amazon.com).

Two things surprised me about the interviews:

One, the repetitive claim by direct pay practitioners that health exchange-inspired plans,now held by 7.3 million Americans, 80% of whom have received subsidies, were the best salesman for direct pay care without 3rd party involvement.

Two, the customers for these plans were a mix of patients – the insured, the uninsured, the rich, the poor, the young, the old, those covered by employers, those covered by government.

How could this be?

ObamaCare, with its exchanges offering subsidized federal care, was purported by some policy makers and big government enthusiasts to be a free lunch- a free ride on the federal dollar for those who could not afford health care.

Well, as it turns out, the health exchanges have a catch. The cheapest plans, the Bronze and the Silver, have a hook. The hook is high out-of-pocket costs in the form of high deductibles and co-pays.

For those of you not in the know, out-of-pocket costs are costs paid with your own money rather than money from another source (the company you work for, the insurance company, or government.)

And co-pays, short for co-payments, are paid for by you, the beneficiary, of the health service, in addition to payment made by the insurer.

In the U.S., co-payments for health exchange plans are defined by the insurer policy, of which there are many, by the person for a medical service or policy. Co-pay amounts vary from $20 to $50 for a doctor visit, $50 to $150 for an emergency room visit, $20 to $50 for a prescription, depending on whether the prescription is for a generic or brand name drug.

The big stick in the federal ointment, however, are rising deductibles. For Bronze plans, deductibles average $5,081 for individuals and $10,386 for families. For Silver plans, deductibles are $2907 for individuals and $6078 for families.

The federal government “protects” individuals from soaring deductibles by placing a limit on deductibles of $6350 for individuals and $12,700 for families. And the government has a maximum of out-of-pocket costs of $6500 for individuals and $13,200 for families.

To many consumers, who often must pay co-pays and deductibles before receiving the service, these federal ceilings are un unpleasant surprise , even when subsidies cover much of the cost and even when employers soften the cost by partially covering the deductible and co-pay. The high deductibles and ubiquitous co-pays smack of an shell-game.

Consumers are beginning to understand new rules of the health exchange game, as set forth in detail in “Unable To Meet the Deductibles and Out-of-Pocket, “, Abby Goodnough and Robert Pear, New York Times, October 18, 2014). This understanding may be why many of these consumers are turning to direct cash-only care as a less expensive, less complicated, and more convenient alternative.

Sunday, October 19, 2014

Who Shall Benefit from All That Health Care Spending?

All that is and shall be.

Sophocles (495-BC 404 BC) , Antigone

I have a weakness for the word “shall.” To me, “shall” implies command and determination as to what should be, rather than what will be.

“Shall” has moral weight. That may be why I entitled a 1988 book And Who Shall Care for the Sick? The Corporate Transformation of Medicine in Minnesota (Media Medicus).

I was concerned then, as I am now, that physicians were losing control of health care to managed care organizations. My concern now is how much control government should or shall have.

I was concerned too that patients were losing control, a question that Victor R. Fuchs, PhD, a Stanford economist raised in his 1974 classic Who Shall Live? Health Economics and Social Choice (Basic Books). I remember a Harvard Business School professor telling me, “ What a title. I would kill to come up with a title like that.”

Which brings me to the title of today’s blog “Who Shall Benefit from Health Care Spending ?” Perhaps the title should be “Who Should Benefit from Health Care Spending?”

According to the Centers for Medicare and Medicaid Services, the projected spending on health care in 2014 will be $3.06 trillion. The government will spend over $1 trillion of that amount for 50 million Medicare recipients and 110 million Medicaid beneficiaries, or $6250 per person. If you divide $3.06 trillion by 320 million, the U.S. population, that comes to about $9,565.50 per individual. The national debt now runs about $58,000 for every man, woman, and child in the U.S. The fastest growing part of that debt is health care entitlements for Medicare and Medicaid.

Who should benefit from these vast present and future expenditures?

• Should it be government, with the number of people it employs to administer health programs and the political power it conveys upon the governing party? Is government capable of protecting and providing “affordable health care” for all, as implied by the title of the current health law “The Patient Protection and Affordable Care Act?” Evidence to date, nearly five years after ACA enactment, with the law is running roughly 15%-20% over budget, and the Congressional Budget Office giving up estimating what it will cost over the next 10 years, creates doubt about government’s ability to contain costs and benefit those who need care.

• Should it be those agencies and health plans who administer the law? It is estimated that administrative costs eat up one-third of health costs. Chief cost consumers in the administrative realm include government itself and those ubiquitous health plans, including giants UnitedHealth, which has just announced it will invest heavily in health exchanges by introducing two dozen new plans into federal exchange markets, and WellPoint, Inc, which holds monopoly positions in more a dozen major metropolitan markets.

• Should it be participants in “medical-industrial complex” – that vast array of health care product distributors, such as pharmaceutical companies, device manufacturers, big data providers, or companies like General Electric. GE has just announced it earns $3.7 billion producing biologically specific medicines and high-tech diagnostics to screen for disease and health indicators.

• Should it be hospitals and doctors, who together account for about 50% of health spending? There is little doubt that hospitals are benefiting from Medicaid expansion, driving by health exchanges, which now give them predictable sources of revenue. But at the same time more than half of hospitals are being heavily penalized for hospital readmissions and for meeting federal regulations, which make up 25% of their costs. As for doctors, their earnings have been flat for the last 10 years, and they say public and private regulations account for 50% if their overhead.

• Or should it be health care consumers themselves? Nearly 150 million Americans get their health insurance through their employer. But most employers are changing their plans to comply with new expenses from the Affordable Care Act and new demands they cover full-time employees working over 30 hours by shifting costs to workers, cutting benefits, and introducing health savings accounts and new health care arrangements with tax-deductible spending and high deductiables. These plans may be called “consumer-directed”, “account-based plans,” “flexible-health savings accounts ,” or as one cynical observer noted, “ OWAs (Other Weird Arrangements )”. Some employers are even offering employees compensation for not enrolling in their health plans. It’s all a little weird and bewildering.

• This bewilderment has resulted in a growing number of consumers, approaching 5-10%, saying, in essence, “To hell with it, I will take a chance and pay for my health care directly without insurance coverage.” Most workers are studying the options, doing the math, weighing the incentives, and considering other alternatives before considering buying a policy through public exchanges.

To conclude:

It’s all more than a little mind-boggling,

All of this health cost tugging and toggling.

One answer may be universal tax credits,

To minimize those overall health cost debits.