Wednesday, November 30, 2011

The Doctor Fix and the Balloon Metaphor

Language is nothing but metaphor


November 30, 2011 – It’s here. Tis the season to battle over the annual doctor fix. The battle is more intense this year because of the super-committee's failure. The problem, as always, remains - how to fix the stupid macroeconomic Sustainable Growth Rate Formula (SGR) concocted in 1997 by Congress, but bypassed every year for the last ten years.

The “doc fix’, for the uneducated among you, is a temporary postponement of a legislatively mandated act- the SGR. If enacted this year, the SGR would cut doctor Medicare pay by 27.4%, or 29.4% if you throw in the 2.0% automatic cuts resulting from the super-committee's failure.

The SGR says the health inflation rate should be same as the general rate of inflation, although it never is because entitlement programs keep blowing up the federal balloon because people think health care is free, when it isn’t.

The trouble with SGR is if you cut doctors by 27.4%, you puncture the Medicare balloon. Doctors pull out of Medicare en masse. The balloon collapses because there are no more doctors to provide free care.

Back to health care as a political balloon. There are two schools of thought.

One, health care is a wonderful, infinitely inflatable balloon. It is a lifesaver, a rising boon for all citizens, a new new deal for which every progressive has waited a lifetime.

Two, health care is the Hindenburg. It is a socialistic death trap. It is death by mandate and will come crashing down to earth, gushing political debt gas as it falls.

These metaphors are both over-inflated. But I believe in the metaphor of the health system as a balloon, which when squeezed simply bulges out somewhere else.

You see these bulges in Medicare physician pay. Push down Medicare physician fees, and physicians will see more patients in less time, invest more in self-referral technologies, order more tests for which they know they will be paid, and practice more defensive medicine to avoid higher malpractice premiums.

Perhaps you could deflate the balloon by having doctors be rewarded only for good outcomes based on “evidence”, have them take more risks through ACOs for budget overruns, halt self-referrals and pay from pharmaceutical companies, reform malpractice, pay more for time spent with patients rather than for technologies.

And maybe, just maybe, you could puncture the balloon by paying for federal programs through vouchers, or block Medicaid grants to states, or private care through health savings accounts with high deductibles.

Don’t expect too much. The federal balloon still contains a lot of hot air, the government balloon is still rising, and balloons are still infinitely elastic and expandable.

I close with an Ogden Nash verse which I ought to apply to this blog.

One thing that literature would be
greatly the better for
Would be a more restricted employ-
ment by authors of simile and

Tweet: The Sustainable Growth Rate and the failure to fix it is a superb example of the balloon metaphor, squeeze it and it bulges out elsewhere.

Tuesday, November 29, 2011

Debut of Health Reform Maze Cover and Video

November 29, 2011 - Today marks the debut of the picture of the cover on my new book, The Health Reform Maze; A Blueprint for Physician Practices (Greenbranch Publishing) on this blog. The book is about the amazing maze of U.S. health care and how physicians seek to navigate its twists, turns, rocks, and shoals.

As you can see on the right side of this blog, the book cover features a box containing a diagram of the labyrithic, byzantine, fiendishly complicated maze of the new health system as set forth in the new health care law- variously known as the Patient Protection Affordability Act, The Affordability Act, or simply as Obamacare.

The diagram shows the maze of possible bureaucratic interactions of the President, CMS, the health exchanges, Congress, 159 different agencies, health plans, doctors, and patients.

On the top left of the maze is the President, at the top right of the maze is the Congress, in the middle of Secretary of Health and Human Services, at the bottom left of the maze are physicians, at the bottom right of the maze are patients. The positioning of these people znd entities explains why the new health system is a "top-down" system.

At the upper left of the box you enter complicated innards of the system. As yet there is no exit

On the right side of the blog is a 2 minute video. In it, I speak of the filled and unfulfilled promises of the Accountable Care Act.

Keep these promises in mind when voting next November.

Workers, Reform Yourselves, Or Pay the Piper

For behavior, man must learn it, as take diseases, one or another.

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

November 29, 2011 – Well, it come down to this – Be Well, Stay Well, Or Else. One of these Or Elses could be Farewell.

Learn to be well, behave yourself, stop smoking, cut down on the drinking, keep your weight down, lower your cholesterol, or else pay more for health care coverage.

Or else means you may not be hired, you may have to pay a higher health care premiums, deductibles and copays. You may not even be able to keep your job, and you may become persona non grata to your employer and your co-workers.

At least that’s how I read the story of “What’s End Game for Wellness,” as told by John Commins in the November 28 issue of HealthLeaders Media.

Commins cites a NYT report this month this month saying a growing number of employers are telling workers who smoke, are overweight, or have high cholesterol to pay a larger share of their health care costs.

The Times article says policies imposing financial penalties on employees' poor health choices have doubled to include 19% of 248 major U.S. employers. Benefit consultants Towers Watson projects a doubling of that number again next year.

According to Commins,

We are seeing a surge in the wellness movement – the idea that employees should take greater responsibility for their health or pay the consequences.

"At face value it seems reasonable. Why should the rest of us pay for your lousy lifestyle choices? However, the wellness movement also has huge potential for abuse and discrimination. It also raises troubling questions about who gets thrown overboard, and where we draw the line on employer intrusions into our personal lives.”

Much of this understandable, of course. Since 2001, family premiums have increased 113%, compared with 34% for workers' wages and 27% for inflation. And smokers and the obese cost employers and their co-workers a lot of money. Unhealthy habits, even gluttonous, behavior is one reason premiums rose 9% rise in 2011 to $15,073 for a family of four.

But then comes the Big Brother question. How much can and should government, which covers 30% of Americans and employers who cover 55%, intrude into personal behavior of insured Americans? I have not included the 15% uninsured, said by some to be the unhealthiest, and sometimes the most misbehaving of them all.

A second question is: how can you change an individual whose behavior is shaped by the culture in which he or she was born. We are all creatures of our culture, and American culture promises we can behave as we please as long as we don’t harm others. The harming others problem becomes relative when misbehavior of one individual raises costs to the employer and fellow workers.

Farewell,Be Well, and Stay Well

Tweet: Some 20% of employers this year, and perhaps 40% next year, are making wellness a criteria for health premiums charges.

Monday, November 28, 2011

For Health Reform Success, Follow the Culture!

As the American culture goes, so goes America. It’s the culture, stupid!

Bobby Jindal, Governor of Louisiana, Speech, American Values Summit, October 12, 2011

November 28, 2011 - I have spilled more ink than most on the pitfalls, pratfalls, and bear traps of health reform – in Obama, Doctors, and Health Reform (IUniverse, 2009), The Health Reform Maze (Greenbranch Publishing, 2011), and 2044 Medinnovation blogs (2007 to present).

In these various verbal outpourings, I have been consistent about one point. To succeed, health reform will have to satisfy and meet beliefs inherent in American culture.

We have all heard the negative litany of health care problems – skyrocketing costs, medical bankruptcies, U.S. businesses paying twice that of foreign counterparts, uneven quality, 50 million without insurance, too many specialists, too few family physicians, mediocre health outomes compared to other nations.

What we have not heard is how the American culture operates and how we think.

• We distrust centralized federal power.

• We revel in virtues of self-improvement.

• We seek freedom of individual choice.

• We believe in equality of opportunity for all citizens.

• We prefer a multipayer to a single payer system.

• We reject a federal- imposed individual universal mandate.

• We want to make our own health decisions in concert with our doctors.

• We seek immediate access to medical high-tech.

• We believe market-based institutions and public-based institutions (VA, Medicare, Medicaid, Tricare) can co-exist.

• We consider regional diversity a good thing.

These cultural roots and beliefs may be exceptional, regrettable , counterproductive, conflicting, and wasteful , but they create a climate of freedom and opportunity that draws millions of immigrants and entrepreneurs to our shores.

But how to resolve problems of cost, access, and unevenness these cultural beliefs create, and how to design a system consistent with these beliefs,that is a horse of a different color.

I like the solution suggested by David Dranove, a professor of health industry management at Northwestern’s Kellogg School of Management. In The Health Care Blog, “The Constitution Is Not a Turkey", he recommends Congress give each state block grant conditioned on expanding health coverage. No expansion, no grant.

Let Massachusetts be Massachusetts, Texas be Texas, and so on down the line. Let states learn from one another. Keep the feds out of it. This approach, says Dranove, would be constitutional, conservative, constructive, consistent with each state’s culture, and put everybody’s pet theory to the test.

Tweet: Let Congress give each state a grant conditional on each state expanding coverage. This would be constitutional and culturally acceptable.

Sunday, November 27, 2011

Physician Doom and Gloom over Sequester and SGR

November 27, 2001

Physicians are crying doom and gloom over the “sequester,”
2% Medicare cuts starting in 2013 and allowing SGR to fester.

This translates to 2% cuts annually through 2021,
Added to 27.4% SGR cuts starting next January 1.

If the do-nothing Congress does nothing,
And continues to its partisan impasse cling.

This will lead to the worst of improbable possibilities,
Closure of hospital facilities and physician hostilities,

Fewer doctors accepting Medicare patients.
In the good old U.S.A, the richest of nations.

Surely something is amiss.
We can do better than this.

Tweet: The Super Committee's failure may lead to a "Sequester",resulting in Medicare physician cuts of 2% and a 27.4% SGR cut.

Saturday, November 26, 2011

Medicare and Black Friday

Black Friday thought: Medicare is imploding while Medicaid is exploding.


November 26, 2011- Black Friday has come and gone.

For retailers "Black Friday" was the day after Thanksgiving, the point at which retailers begin to turn a profit, i.e., go into the black.

For shoppers “Black Friday,” was a wild and crazy hunt for bargains, starting for most at the stroke of Midnight and going on all day Friday.

For Medicare recipients, Black Friday meant something different.

Black Friday for Medicare Recipients ends on December 7 this year. That's the day Medicare deadline signups loom.

There’s plenty of Medicare shopping to do over Thanksgiving weekend and beyond. Seniors have only two weeks left to choose a new Medicare Advantage or prescription drug plan, if they want to change from their current ones.

Medicare’s open enrollment deadline was pushed up this year, from Dec. 31 to Dec. 7, as part of the 2010 federal health reform law. The earlier deadline is meant to ensure that beneficiaries are properly enrolled and get their new membership cards by the start of the plan year Jan. 1.

That’s why you see many TV ads, mailers and events calling attention to it. Few callers to the groups’ helplines are asking about the deadline; talk is now almost entirely about picking a plan.

Many Medicare beneficiaries might still be unaware of the December 7 date The “four C’s” of picking a plan are cost, coverage, convenience, and customer service.

Go to to judge the relative merits of various Medicare plans, including Medicare Advantage and Medigap policies. People often forget about customer service, in particular. It’s important to evaluate the responsiveness of your Medicare provider, as well as to consider other providers and their ratings.

Medicare’s official website features a plan comparison tool, which includes the star ratings that CMS awards based on quality factors such as rates of hospital readmission.

Depression Friday

Black Friday Is also Depression Day Medicare Recipients. The color black also connotes depression, as in a black mood. It’s no secret Medicare recipients are the age group most opposed and most skeptical to the Accountable Care Act.

Many, 2'3s to be precise, are in a black mood if you can judge by polls of seninors who oppose the bill. The law requires cutting over $500 billion out of Medicare and eliminating many of the benefits of Medicare Advantage Plans.

There are other objectionable features as well.

Here is a list of black features of the Accountable Care Act (Obamacare) composed by Jeffrey H. Anderson, former senior speechwriter for Secretary Mike Leavitt at the U.S. Department of Health and Human Services.

• It’s 2,700 pages long, so few people really understand it and its consequences.

It has caused 4.5 million Americans to lose their employer-sponsored health insurance and be dumped into Obamacare “exchanges.”

• It loots Medicare. The CBO projects that during the overhaul’s real first decade (2014 to 2023), nearly $1 trillion would be siphoned out of Medicare and spent on Obamacare.

• It costs twice as much as the deficit commission is trying to “save.” The CBO says that Obamacare would cost an estimated $2.5 trillion during its real first ten years.

It raises, rather than lowers, health costs. The Medicare chief actuary says that Obamacare would increase health costs by hundreds of billions of dollars by the end of this decade.

• It massively expand sMedicaid, at a time when our national debt is $15,000,000,000,000.00 and is about the size of our entire gross domestic product, Obamacare would provide a colossal expansion of Medicaid — expanding it to cover many of the middle class.

It establishes the IPAB. The Independent Payment Advisory Board (IPAB) is a version British National Institute for Clinical Health and Excellence (NICE), the British rationing agency .

• It politicizes medicine and amases unprecedented power and money in Washington at the expense of Americans’ liberty.

Tweet: Black Friday is a good time to start seriously thinking about picking a Medicare plan and for considering the consequences of health reform.

Friday, November 25, 2011

The World of Health Care Venture Capital

He ventured neck or nothing – heaven’s success
Found, or earth’s failure.

Robert Browning (1812-1889), A Grammarian’s Funeral (1885)

November 25, 2011- Luis Pareras, MD, PhD, MBA, of Barcelona, Spain, and I are thinking of writing a book on the world of health care venture capital – how , when, why, where, and and for whom, it works.

We sense physician entrepreneurs are searching for access to venture capital to back their ideas and make those ideas become reality. Unfortunately when you stick your neck out, some ideas you conceived as heavenly fall to earth and fail. Perhaps we can help prevent the fall.

It is our contention that health care venture capital is a world-wide phenomenon, that physician entrepreneurial innovators are worth encouraging, and that "disruptive" health care startups may help relieve the pressure of national health costs by lowering costs and improving practices.

Make no mistake about it. Venture capitalists across the world generate much of the capital – the financial oxygen – required to go public and succeed on a broad scale.

Much of the venture capital activity is centered in the United States, Of the 91 venture firms listed in Wikipedia, 78 are in the US, followed Europe, China, Israel,India, and Singapore with 24 based in multiple countries.

In th U.S., 46 venture firms are concentrated in California, 25 in Menlo Park alone. Massachusetts has 16 venture capital firms. Other states - Minnesota, Texas, New York, Connecticut, and Virginia - are also beehives of venture activity.

Why the concentration of venture capital firms in the U.S.? according to Peter Drucker (1909-2005), the U.S. economy, until recently, outpaced the European economy, growing at a rate of 3-5% per year until about 2005, while European growth rates were stagnant at about 1%. Today the U.S. is in the same no growth funk as Europe.

According to Drucker, the basic reason for the U.S. entrepreneurship success is that in the decentralized U.S. economy, decisions are based on proximity to the market and rapid response to changes while European centralized, socialized economies render market response difficult and slow.

The U.S. says Drucker has switched from a centralized managerial economy to a decentralized entrepreneurial economy while Europe has not.

Critics of the Obama administration maintain that the current slow U.S. growth stems from our drift toward the European model of doing business, centralizing health care, and hog-tying health care enterprises with government regulations and onerous business taxes.

This may be, but health care in the U.S.added 300,000 jobs in 2011, and health care's vibrant growth makes it an attractive sector for venture capitalists.

One way out of the slow growth trap for the U.S. economy as a whole is revitalizing entrepreneurship and innovation. The optimal place for creating new businesses and getting money to launch them is still the U.S.

Foreign entrepreneurs know this, which is why they come to the U.S. to be educated in U.S. universities in science, technology, engineering, and mathematics, then stay here to start up companies backed by venture capitalists, particularly in places like Silicon Valley. And, if these entrepeneurs are not granted visas or green cards, they return to their home countries – such as India, China, or Isreal – to set up startups and gain venture capital.

One reason for writing a book on physician innovation and entrepreneurship is to educate doctors about the process of obtaining venture capital.

Venture capital provides capital to early-stage, high-potential, high risk, growth startup companies.

Venture capital funds make money by owning equity in the companies it invests in. They may be interested in physicians who have ideas about a novel technology or new ways of organizing doctors.

Physicians may gain capital through angel investing, relatives, or personal resources, or from a local bank. But given the current clamp-down on lending to companies without a track record, obtaining money to go public is difficult. Venture capital is attractive for new companies with no operating history that are too small to raise capital in the public markets and have not reached the point where they are able to secure a bank loan or complete a debt offering.

Venture capital is also associated with job creation (accounting for 21% of US GDP). Every year, there are nearly 2 million businesses created in the USA, and only 600–800 get venture capital funding. According to the National Venture Capital Association, 11% of private sector jobs come from venture backed companies and venture backed revenue accounts for 21% of US GDP.

In closing, I offer this astute observation by Peter Drucker on why some countries' economies grow and others do not (Innovation and Entrepreneurship,Harper & Row, 1986:

And yet it is most unlikely (I am tempted to say impossible) for any counry to be innovative and entrepreneurial in high tech without having an entepreneurial economy. High tech is indeed the leading edge, but there cannot be an edge without a knife. There cannot be a viable high-tech sector by itself any more than there can be a healthy brain in a dead body. There must be an economy full of innovators and entrepreneurs, with entrepreneurial vision and entrepreneurial values, with access to venture capital , and filled with entrepreneurial vigor.

Tweet: Venture capitalist backed small businesses account for 21% of GDP, and many of these new business are in health care.

Wednesday, November 23, 2011

Brief Update and Medinnotion Blog and New Book, Health Reform

November 23, 2011- I shall be devastatingly brief. My blog is now getting more than 1000 hits on some days. I am entering some blog contents on twitter as tweets.

I now have a video on Youtube about effects of health care law. To view the video, click on Health Reform Maze after googling YouTube. Have a happy and gluttonous Thanksgiving.

Richard L. Reece, MD

Thanks for Thanksgiving, Ben and Abe

There is one day that is ours. Thanksgiving is the one day that is purely American.

O’Henry, aka, William Sydney Porter (1862-1910)

November 23 for November 24, 2011

Thank you, Lord, for the privilege of living in the U.S.A.
I want you to know things here are still mostly A.O.K.

Oh, as a doctor, I have a few complaints,
Mostly because of government constraints.

I like Thanksgiving because it is brown,
Which is by far the best color around.

Thanksgiving is as brown as burnt toast.
Thanksgiving evokes a brown turkey roast.

Speaking of freshly cooked warm turkey,
I like it much better than cold beef jerky.

Ben Franklin, electricity's inventor - sage on the $1 bill,
Composed Poor Richard's Almanac and believed in free will.

Ben proposed the wild turkey as our national symbol.
The wild turkey roamed across the land free and nimble.

Wild turkeys may not soar with the eagles.
But at least they are nobody’s pet beagles.

I prefer majestic wild turkeys to domestic tame turkeys,
In my way of thinking wild turkeys are nobody’s lame lackeys.

They have minds of their own.
They are nobody’s pet drone.

Abraham Lincoln proclaimed Thanksgiving a national Holiday,
Thank you, Abe,for your proclamation for Thursday turkey day.

Tweet: Here is my Thanksgiving day turkey poem, which some may call a turkey of a poem.

Tuesday, November 22, 2011

Hospital Systems Enter Walk-In Markets

Fortune is like the market, where many times, if you can stay a little, the price will fall.

Francis Bacon (1561-1626), Of Empire

November 22, 2011 - In today’s WSJ Health Blog, Laura Landro writes an excellent column on why hospitals, drug stores, hospital systems, and physician groups are establishing more and more walk-in clinics in retail settings.

Among other things, Landro had this to say:
“For patients with immediate medical needs, a growing number of walk-in clinics and freestanding emergency rooms offer an alternative to hours-long waits in the hospital emergency department, today’s Informed Patient column reports.”

"‘Hospital systems feel they need to stop losing these walk-in patients with minor injuries and illnesses to new players,' Tom Charland, chief executive of consulting and research firm Merchant Medicine, tells the Health Blog.' "

“ 'With new models of care envisioned under the new health-care law including bundled payment systems that reimburse for episodes of care rather than for each service, hospitals 'will be responsible for the total cost of patients, so it is in their interest to send them to the lowest-cost provider,' Charland adds.”

“Hospitals are also watching Wal-Mart, which is seeking partners to push into the primary-care market by expanding the quick-service clinics it already runs.”

“Freestanding emergency rooms are also growing in popularity, as health systems find that they can help relieve the burden on primary hospital emergency rooms and draw patients who might have trouble getting to the main hospital ED.”

“While many of the freestanding ERs are owned by hospital systems, some are being built by independent companies that aren’t bound by some of the same regulations as hospitals — such as seeing all patients regardless of ability to pay.”

“Insurers also may not cover all services at independent freestanding emergency rooms. States are now wrestling with how to regulate such facilities.”

Here was my comment on Laura Laundro’s perceptive column:

Nice piece. As I pointed out in my November 10 Medinnovation blog, "Health Care Moves Into Retail Spaces," there's another dimension to this. Hospitals, doctors, and insurers are moving into these spaces because increasing numbers of people are signing up for individual policies featuring health savings accounts with high deductibles . These individuals tend to be sensitive to price, and they are looking for care bargains and the convenience of one-stop shopping. Also insurers have realized to sell these poliicies, one-on-one contact works better than marketing to groups.

Hospitals, physicians, and health insurers are moving into retail spaces because that's where individual care buyers congregate in search of one-stop bargains.

Cleveland Clinic Unveils Top 10 Medical Innovations for 2012

It is never too late to innovate. You can always do better

Richard L. Reece, MD, Innovation-Driven Health Care: 34 Concepts for Transformation, Jones and Bartlett, 2007

November 22, 2011 - Before I became wrapped up in health reform and its consequences, I intended this blog to be about medical innovations. I still think innovations may be the salvation of reform, if oppressive government does not quash innovation. But that’s another story. Today’s story is about the important technological innovations, as conceived and executed by the Cleveland Clinic.

The Top 10 Medical Innovations for 2012, as seen by the Cleveland Clinic, are:

10. Genetically Modified Mosquitoes to Reduce Disease Threat: Researchers are now exploring new avenues to fight mosquitoes, starting in the laboratory where scientists manipulate the DNA of the insects.

9. Novel Diabetes Therapy: SGLT2 Inhibitors: Most diabetes medications work by affecting the supply or use of insulin. This helps move glucose into the cells. But now there is a new class of drugs ready for prime time called sodium-glucose co-transporter 2 protein inhibitors, or SGLT2 inhibitors. These drugs represent a paradigm shift in diabetes treatment. They reduce blood sugar in a totally new way – by causing it to be excreted during urination.

8. Harnessing Big Data to Improve Heath Care: Health care data requires advanced technologies to efficiently process it in reasonable time, so organizations can create, collect, search, and share data, while still ensuring privacy. In this way, analytics can be applied to better hospital operations and tracking outcomes for clinical and surgical procedures. It can also be used to benchmark effectiveness-to-cost models.

7. Active Bionic Prosthesis: Wearable Robotic Devices: About 9 out of 10 amputations involve the leg, from the foot to above the knee. Thanks to remarkable advances in prosthetics research in the last decade, space-age plastics and carbon-fiber composites have been engineered to help restore function. Now comes the computerized bionic leg with its microprocessors and computer chips that can rival the functionality provided by biological limbs.

6. Implantable Device to Treat Complex Brain Aneurysms: A new minimally-invasive procedure can safely and effectively treat brain aneurysms without open surgery by implanting an FDA-approved device directly into the artery. Consisting of a flexible braided mesh tube made of platinum and nickel-cobalt chromium alloy, this device can be delivered by catheter and used to block off large, giant, or wide-necked aneurysms in the damaged internal carotid artery.

5. Increasing Discovery with Next-Generation Gene Sequencing: The best way to get to the root cause of serious illness is to sequence a person’s genome. Leading geneticists envision a day soon when everyone’s genome will be sequenced and included as a routine part of their medical records. Next-generation sequencing machines can help achieve this goal in the near future with the wider dissemination of faster and affordable sequencing machines.

4. Medical Apps for Mobile Devices: Medical apps have several significant advantages: reliable medical information is always up to date, doctors can answer patient queries quickly by accessing data without every leaving the patient’s bedside, and many medical apps also have interactive features that help doctors choose appropriate screening tests for patients and calculate a patient’s risk of developing a host of diseases.

3. Concussion Management System for Athletes: Head injuries are now such a major medical concern in sports that special patient management tools have been developed. Used by athletes, they instantly detect brain injuries at the moment of contact, and provide patient-specific guidance about when athletes can return to play without risk of further harm. The novel Concussion Management System includes a special assessment tool that is used to establish an athlete’s baseline cognitive and motor skills at the beginning of his or her athletic season. This is the first tool that objectively and accurately assesses cognitive and motor function simultaneously.

2. CT Scans for Early Detection of Lung Cancer: With the introduction of low-radiation-dose spiral computed tomography (spiral CT), a high-tech scan can generate a series of detailed cross-sectional images of the lungs that are used to create a three-dimensional image. These scans can not only identify tumors earlier, but also spot them when the tumors are smaller and more treatable by surgery. Surgery is the best treatment for most types of lung cancer.

1. Catheter-Based Renal Denervation to Control Resistant Hypertension: Today, one in three adult Americans has hypertension, which puts them at significant risk for strokes, heart attacks and kidney failure. In fact, hypertension is the No. 1 risk factor for death in the world. Now, a new 40-minute catheterization procedure, called renal denervation, is approaching resistant hypertension in a new way – by targeting the renal sympathetic system, which consists of the small nerves that carry signals between the brain to the kidneys. Disruption of these nerve fibers has resulted in improved blood pressure levels, while also showing promise in treating chronic kidney disease, insulin resistance, and heart failure.

As practiced by the Cleveland Clinic, Health care reform and health care innovation go hand in hand.

Monday, November 21, 2011

A Dozen Health Care Uncertainties for 2012

Health care roses may not be cheaper by the dozen in 2012.

Health Care Florist

November 21, 2011- Cheryl Clark, senior editor for HealthLeaders Media,today delivered a bouquet of 12 reasons for health care uncertainty in 2012 in “Twelve Uncertainties Hovering Over Healthcare.”

Clark is the California correspondent for HealthMedia Leaders. California the site of the Tournament of Roses and the home of Gertrude Stein, who wrote that memorable line, “ A rose is a rose is a rose.” Health care roses next year by any other name might not be as sweet.

Enough word play.

Here are Clark’s dozen roses.

1. Super Committee on Deficit Reduction – A no-go. 2% automatic cuts across- the-board start in 2013.

2. Sustainable Growth Rate Repeal – Another no-go. 27.4% cuts for physicians scheduled for January 1, 2012.

3. Supreme Court on Accountable Care Act Constitutionality – Could be yet another no-go,this time for Obamacare. Decision scheduled for June.

4. Hospital readmissions - A thorn in Medicare’s side. Hospitals await CMS decisions on how to interpret and penalize excessive readmissions in 30 days after discharge.

5. More civil and criminal penalties on physicians – Fighting fraud and abuse is a good thing, but not if it makes most doctors feel like criminals awaiting public hangings.

6. More aggressive health plan premium reviews – The Obama administration has met the enemy, and it is those evil health plans who want to stay in business and satisfy stock holders.

7. Who will lead CMS? By end of year, it won’t be Donald Berwick, who is persona non grata among conservatives who see him as leader of the socialized medicine band.

8. Patient-Centered Outcomes Research Institute – This 21 member panel created by ACA will recommend what doctors can do and be paid for based on“ evidence.”

9. Meaningful use - In second quarter of 2012, CMS will announce details of how doctors will be rewarded or punished for installing and using EHRs, come October 1, 2012.

10. Accountable Care Organizations – Sometime this year CMS, FTC, and anti-trust division of Department of Justice will try to assure ACOs don’t dominate markets, skimp on services, and pressure enrollees to influence choice of providers. May not be important since few hospitals and doctors will elect to become ACOs.

11. Physician Payment Sunshine Act – Designed to limit influence of drugs, devices, and supply manufacturers on physicians and hospitals. Advocates claim little sun must shine on undue influences ; critics say it’s just another bureaucratic cloud.

12. Value-based Purchasing Payments Incentive – This is about CMS offering 1% hospital incentives for dropping mortality rates for heart attacks, health failure, pneumonia, and infections and hospital acquired conditions – falls, pressure sores, and infections.

Comparing health reform uncertainties to roses,
May not be best to show what goes on under our noses.
Butthe Affordable Care Act has its thorns,
And it doesn’t hurt to seize roses by their horns,
To show what challenges the future poses.

Tweet: The health care law has created profound uncertainties affecting all providers of health care, most increasing bureaucratic rules, penalties, and incentives.

The Supreme Court and the Future of Health Care

The Supreme Court holds health care's future in its hands.


November 21, 2011 - The best source of information on the future of health care and of physicians is the Physicians Foundation ( This nonprofit organization was founded in 2003 to settle a lawsuit brought by 19 state medical societies against major health plans.

The non-partisan non-profit Foundation seeks to improve the practice of medicine by its practitioners and their patients. It does part of its work by awarding grants to physician groups and other organizations, such as Health Leads.

Health Leads allows physicians to “prescribe “ social services. College volunteers, most destined for a future in health care as physicians and other health care professionals, then help poor families gain access to food stamps, housing, jobs, social services, and medical transportation.

The Foundation also conducts national surveys of thousands, even hundreds of thousands of practicing doctors. These physicians are the backbone of health care's delivery system. Through its surveys, the Foundation determines physician morale, economic status, plans for the future, wants, needs, expectations, and frustrations.

The Foundation publishes results of its surveys to guide physicians, and it publishes the Washington Report. Lee Stillwell, a veteran inside-the- Beltway consultant and journalist closely allied to the medical profession, writes the report.

Here are excerpts of his November 21 Washington Report.

Finally, after 20 months of arguments between the Obama Administration and Congress about the viability of the massive health care law, the U.S. Supreme Court dramatically has moved to determine the fate of the legislation that impacts every American’s medical treatment.

The Court last Monday (November 14)surprised the political community, which has been involved in never-ending bickering about Obamacare, with an announcement it would decide the legal fate of four issues which are at the heart of the law.

The case likely will be heard in March 2012, and a decision announced later in the summer at the height of the Presidential and Congressional campaigns!

The high court set the oral argument at five and one-half hours, longest time in more than 45 years. The court also picked two outside veteran attorneys—H. Bartow Farr 111 and Robert A. Long-- to argue certain components of the law that would not be covered by the other lawyers in the case. Many believe the decision will be the most crucial ruling made by the justices since the Bush vs. Gore decision almost 11 years ago, sealing George W. Bush’s election win.

The importance of a case that will decide the future of health care for all Americans led to an unusual request to televise the oral argument—the first time ever in the history of the court. The plea to permit TV coverage was made by Brian P. Lamb, chief executive officer (CEO) of C-SPAN.

“We believe the public interest is best served by live television coverage of this particular oral argument,” Lamb said in the letter. “It is a case which will affect every American’s life, our economy, and will certainly be an issue in the upcoming presidential campaign."

From my viewpoint, Lamb, who has support for the idea from members of Congress, makes a valid argument. There is no doubt that this issue will determine the future of medical treatment for all Americans.

The Court certified four questions for review in the Patient Protection and Affordable Care Act (PPACA), signed into law by President Obama on March 23, 2010:

--Is it Constitutional for the federal government, who wants to increase coverage to 50 million uninsured Americans, to mandate that everyone is required to have health care coverage by 2014?

--If an individual mandate is unconstitutional, does the entire statute fall or stand?

--Is it unconstitutional for the federal government to require the states to pay extra funds for expanding Medicaid to a bigger pool by 2017?

--Should a legal decision be put off until 2015 when the first taxpayers would be forced to pay a penalty for not having health insurance?

Cases accepted by the court are National Federation of Independent Business v. Sebelius, No. 11-393; Florida, et al., v. Department of Health & Human Services, No 11-400; and Department of Health & Human Services v. Florida, et al, No. 11-398.

The legal battle finally reaches the Supreme Court after four very different rulings at the Circuit Court level. The 11th Circuit Court of Appeals, Atlanta, ruled the mandate unconditional; the Sixth Circuit, Cincinnati, and the District of Columbia Circuit, upheld the mandate; and the Fourth Circuit, Richmond, dismissed the suit as premature, stating the challengers had to wait until the mandate takes effect in 2014.

All nine justices –John Roberts, Antonin Scalia, Anthony Kennedy, Clare Thomas, Ruth Bader Ginsburg, Stephen Breyer, Samuel Alito, Sonia Sotomayor, and Elena Kagan—appear ready to participate in the ruling.

The stakes are high and the health care community waits with great anticipation. A ruling against the individual mandate would cripple the intent of the law. Without it, many would avoid the insurance until they get sick, dramatically driving up insurance premiums.

If the court throws out the entire law, many already implemented provisions that benefit millions could be jettisoned, including young people staying on their parents’ health plan until 26 years of age and the effort to close the doughnut hole for seniors-the gap in prescription drug coverage.

However, the biggest surprise was the court agreeing to look at the law’s Medicaid expansion. Supporters of PPACA fear an adverse ruling will kill the effort to expand Medicaid. States in their suit said the expansion amounts to an unconstitutional coercion. Under the law, cash-strapped states would be required to cover all residents with incomes up to 133 percent of the poverty level, adding an estimated 17 million participants.

Obviously, any legislative effort to repeal the law now will take a back seat until the Supreme Court makes a decision. However, the twists and turns of the market place guarantee that the health care community, which cannot afford to wait for a decision, will continue to transform itself the best way it can to survive in this uncertainty.

Tweet:The Supreme Court holds health care’s and physicians’ future in its hands. It hears ACA’s case in March and announces results in June.

Sunday, November 20, 2011

Liberal Pessimism over Supreme Court and Obamacare

A glass half-empty.

Pessimists' Operating Philosophy

November 20. 2011- Lately I cannot help but notice an air of pessimism among liberal commentators about the upcoming Supreme Court decision over the constitutionality of the Affordable Care Act, an oxymoronic title for what otherwise has come to be called Obamacare by critics and advocates alike

In a book review "Hillarycare: The Sequel," in the November 20 NYT of Remedy and Reaction: The Peculiar American Struggle Over Health Reform, Timothy Noah, senior editor for the liberal New Republic, concludes his review on this pessimistic note.

Should the Supreme Court chuck Obamacare, health policy will be back to Square 1, and Obama’s presidency will be instantly transformed from a substantive success to a substantive failure. I fear that Justices Roberts, Thomas, Scalia, Alito, and Kennedy may find that possibility too tempting to pass up.

Tweet: Liberals are increasingly pessimistic about prospects of the Supreme Court chucking Obamacare.

Will Bundled Care Save Health System a Bundle?

This will save you a bundle.

Common Marketing Premise and Promise

November 20, 2011 - In his NYT Op-Ed today, Ezekiel Emanuel, MD, former Obama advisor and now vice-provost and professor at Penn, argues that bundled payments for episodes of care, e.g. diabetes, heart failure, and hip replacements, will save a bundle for taxpayers and patients.

Since 2009, he reports, Medicare has bundled payment for 37 cardiovascular and orthopedic procedures, with preliminary data indicating savings of 10% and improved quality of care. Therefore, we should “ make the program mandatory for all hospitals beginning January 1, 2013, eliminating fee-for-service for the procedures.”

Fee-for-service, Dr. Emanuel maintains, incentivizes specialists to give more services than needed in a fragmented and inefficient manner, while bundled payment delivered by coordinated groups would be more efficient and keep patients healthier. Besides, specialists and hospitals, “ lose money if they keep the chronically ill healthy,” as if greed drives specialists to do what they do.

If only, he pleads, we could roll all caregiver payments into one bundle to pay all health care players into one neat, all- encompassing bundle, we could prevent events like 20% hospital; readmissions of chronically ill patients from occurring.

Not so fast, Dr. Emanuel, these readmissions are usually very sick patients, suffering from chronic irreversible illnesses developed over a lifetime, not curable by one hospital admission.

Furthermore, many revert to old behavioral and dietary habits that got them into the hospital in the first place, and 40% of them do not fill or take their prescriptions. Complications consequently happen under the best of payment models or treatment conditions when you’re old, sick, and forgetfull

Changing the payment system isn’t going to restore them to health or prevent readmissions.

What patients need, according to Emanuel, is “high touch medicine” and “concierge medicine” offered up by teams of caregivers anticipating every human need, thereby preventing complications . Politician say we need, he says, “a health care system rather than a sick care system. They are right, and high touch medicine and bundled payments are the best ways to catalyze that change.”

Maybe. But, in my opinion, Emanuel mischaracterizes “concierge medicine,” and “high touch medicine, “which iin the eyes of doctors, is more about individual doctors devoting more time with individual patients and escaping the bureaucratic restraints of government medicine.

As for saving money, it has yet to be proven that herding patients, doctors, and hospitals into organizations offering bundle care saves money.

Tweet: Read Doctor Ezekiel Emanuel’s NYT Op-Ed piece ,“Saving by the Bundle,” to learn how Obamacare proposes to save money and improve care (11/20).

Sepsis Kills - What Kaiser Is Doing about It

Sepsis is a leading cause of death in American hospitals, but ask most people what sepsis is, and they’ll give you a blank stare. About 750,000 Americans get sepsis every year at a cost of $17 billion to the U.S. health-care system, and about 200,000 die from it, according to the Global Sepsis Alliance, a coalition of 250,000 intensive- and critical-care physicians.

“Sepsis: A Deadly Disorder You’ve Never Heard of, “ Marketwatch, October 10, 2010

November 20, 2011- I received the e-mail below from an old friend George Halvorson, CEO of Kaiser. I told George I would pass it along in my medinnovation blog with the expectation the email contents might save a few lives. This could happen. My blog is now receiving 1000 hits on some days, and many of my readers are physicians and hospital executives who can doing something about sepsis.

George Halvorson E-Mail

Sepsis kills.Sepsis is actually the number one cause of death in hospitals in California. According to the official state death rate statistics, more people die in hospitals from sepsis than die from cancer, stroke, or heart disease. State statistics tell us that twenty-four percent of seniors who die in California hospitals -- nearly one in four seniors -- die from sepsis.

Very few people know that to be true. Very few people are doing anything about it.

Our goal is to have the safest hospitals in America, so we are an exception to that rule. We are doing something about sepsis -- and what we are doing is working.

When we started measuring the percentage of our sepsis patients who did not survive, our first mortality numbers were significantly more than twenty percent. One in four sepsis patients did not survive.

Now we have made consistent improvements in every hospital and our death rate has dropped to eleven percent .That is half as many people passing on. That’s he average for all KP hospitals. Some are now less than eight percent.

How did we do that? How did we save all of those lives?

We had very smart people focus on the problem to figure out what we needed to do to make care better for sepsis patients. It turns out that speed is essential. There is a time called the “Golden Hour” at the beginning of treatment for each patient where rapid intervention with the right treatment really is golden.

Delayed care can be fatal. Fast care can work miracles .So we figured out how to diagnose quickly, pre-plan every response, predefine the right medications, and train people in our care sites to respond in a hurry with the right stuff in the right way.

Most hospitals -- outside of KP -- usually do not have sepsis response teams or even organized sepsis treatment plans .In too many other hospitals, just getting the blood test results back to the floor where the patient is waiting can take hours. Ordering medications in those other hospitals can take a long time, and the medication can take hours to get to the patient.

Inventing a sepsis response from scratch for each patient is the wrong way to deliver care for sepsis patients .In our hospitals, we have teams of nurses, pharmacists, lab techs, and physicians all knowing that getting sepsis care right for each patient may be the most important thing that ever happens in the life of that sepsis patient.

It is literally a life and death situation. We save lives because we work in teams of caregivers focused on saving each of those lives.

It is incredibly important work. For the person who doesn’t die because we get it right, it’s hard to imagine anything more important.

I had written a letter earlier to share some of our initial successes with sepsis care. The good news is that our successes are continuing. Continuous improvement is a celebration all by itself. We are now sharing our learning and processes with the rest of health care. We are working with a national coalition -- Partnership for Quality Care (PQC) -- to spread our learnings to some of the best hospitals in the U.S.

PQC hospitals are setting a goal of reducing sepsis deaths by at least twenty-five percent. I believe they will all succeed.

Be well.


Tweet: Sepsis annually kills 750,000 American hospital patients. Kaiser’s hospital sepsis rapid response teams have cut deaths from sepsis in half.

Saturday, November 19, 2011

America’s “Peculiar” Health Reform Struggle

Government is either organized benevolence or organized madness: its peculiar magnitude permits no shading.

John Opdike (1932-2009)

November 19, 2011 – In his new book, Remedy and Reaction: The Peculiar American Struggle over Health Reform (Yale University Press, 2011), Paul Starr, Princeton University Sociology Professor and Health Care Guru, repeatedy uses the word “peculiar” to describe U.S. health reform."

By “peculiar” Starr means the U.S, is unique among nations in not guaranteeing health coverage for all. Starr implies the Accountable Care Act is organized benevolence while itsopposition is organized madness.

I will let Starr speak for himself.

• “The search for a remedy to America’s problem in health care has turned into a peculiarly arduous struggle – peculiar in its duration, its rancor, and its salient and centrality in national politics.”

• “The American struggle over health care has also been peculiar because of the unusual lines over which it has been fought" (i.e., special interests, rich against poor, entitled vs. unentitled groups).

• “What is also peculiar about the American struggle over health care is that the problems in the society do not just afflict the least powerful in society" (i.e., but the more influential, affluent seniors, and the middle class).

The Word “Peculiar”

“Peculiar” is a word with different meanings- unusual, unique, particular, distinctive, exclusive, out of the ordinary, and exceptional. Many Americans think of their health care as exceptional. Even Starr concedes American medicine at its best is exceptional, but as he ruefully laments: it is not all that good for most of us compared to othr countries.

I do not wish to demean Starr’s book. It is evenhanded, beautifully written, and full of memorable insights and language. In his last chapter, “Reform’s Uncertain Fate,” he serves up these gems.

• The Affordable Care Act depended on “early deliverables” to win over the public – ending lifetime limits and pre-existing illness as conditions for coverage and expansion for coverage for young adults up to age 26 under their parents’ policies.

• “One reason the electoral map turned red in 2010 was that the electoral map turned gray: the elderly flocked to the polls to vote Republican while young people stayed home.”

• “The Democrats created a huge political problem by delaying major benefits for four years, mainly to reduce the deficit, but instead it opened the gates for four years of bitter debate, in other words,as LBJ remarked, ”dead cats were going to sit on the porch for a very long time.”

In closing,

What’s “peculiar”about the reform struggle,
Are the many political forces it must juggle,
It’s not one-for-all,
It's a free-for-all.
Into the mix, reason we must smuggle.

Friday, November 18, 2011

A Bias Toward Physicians

Honor a physician with the honor due unto him for the uses which ye may have of him: for the Lord hath created him.

No book is genuinely free of political bias.
George Orwell (1903-1950), Politics and the English Language

November 18, 2011 - Recently I was asked to give a speech before a distinguished physician group about my book The Health Reform Maze: A Bluprint for Physician Practices (Greenbranch Publishing, 2011). The only condition for the speech was:” Give an unbiased opinion of physicians.”

This, I said, I could not and cannot do. I have a bias toward physicians.

Being one of them, I contend we have not been given a fair shake by politicians and the media. Physicians are said to be greedy and principally responsible for high health costs.

Given 12-14 years to prepare for our profession (college, medical school, residency, and fellow ship), educational debts of $150,000 to $200,000, patient demands for the very best of care, lawyer scrutiny of that care, malpractice premiums of $10,000 to $100,000, continuing education requirements, and third party utilization rules raising overhead costs by 50% or more, I understand why physicians are justifiably outraged by Congress’s annual threats since the 1997 implementation of the SGR (sustainable growth rate) formula to slash their incomes. This year the slash of 27.4% of physicain payments is slated to take effect on January 1, 2012.

MedPAC (Medicare Payment Advisory Commission) has offered an alternative proposal to SGR – a 17% cut of specialists’ fees (2/3s of American physicians are specialists) and a freeze of primary care physician fees over 10 years. This is unacceptable.

I agree with this excerpt from Jeff Goldsmith’s blog of yesterday entitled, “MedPAC’s SGR Solution: Bad Medicine For A Chronic Problem.” Goldsmith is president of Health Futures, Inc, in Charlottsville, Virginia.

The Medicare Payment Advisory Commission (MedPAC) is the closest thing Congress has to adult supervision on important health policy questions. The Commission commands bipartisan respect both for its record of sound policy advice and for its leadership.

With its October recommendations, MedPac attempted to solve the sustainable growth rate (SGR) physician payment formula budget crisis by spreading its more than $300 billion cost beyond the physician community. More than two-thirds of the burden would fall on hospitals, pharmaceutical and device manufacturers and, significantly, on Medicare beneficiaries themselves. Clearly MedPac’s intent was to widen the circle of pain.

However, a significant portion of the burden, over $100 billion, would still be borne by the physician community through 17 percent reductions in specialists’ fees and a ten-year freeze on primary care fees.

If implemented, MedPac’s policies will give rise to a festival of unintended consequences: weakening multi-specialty group practices (which rely upon specialist comp to cross-subsidize their primary care services); winding down private practice-based primary care medicine; accelerating the hospital roll-up of medical practices while widening hospitals’ losses on the practices they already own; and triggering a further wave of ill-timed cost shifting to private insurers.

Tweet: MedPAC recommends a 17% cut in specialists’ fees and a freeze in Primary Care fees over the next 10 years, a proposal most doctors reject.

Thursday, November 17, 2011

Is Health Care Capitalism Growth A Zero-Sum Game?

The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of misery.

Winston Churchill (1874-1965), Saying

Less than seventy-five years after it officially began, the contest between capitalism is over: capitalism has won.

Robert Heilbroner, (1919- 2005 ), American Economist, “Reflections: The Triumph of Capitalism,” New Yorker, 1989

November 17, 2011 - If you’re witnessing the Occupy Wall Street movement, you may be wondering who is winning: the capitalists or the socialists?

If you’re listening to American progressives: you know the answer: neither, it’s a zero sum game.

The gain in health care costs by providers must come at the loss of patients, other economic sectors, and society.

As Paul Starr, a strong advocate of reform, puts in his new book , Remedy and Reaction: The Peculiar American Struggle over Health Care Reform (Yale University Press, 2011), “By the second half of the twentieth century, the United States is the only major advanced society without a system of providing care for all its citizens…As a result of the various limitations of the insurance system. Americans, he asserts, experience forms of economic insecurity virtually unknown in the other advanced countries: “medical uninsurability,” “medical bankruptcy,” and “job lock” (inability to start a business or change jobs for fear of losing health benefits).”

In other words, if the U.S. could only be more like other advanced countries, we could become a civilized society. Starr then explains that U.S. health spending is 42% greater in the U.S. than its income would predict without commensurate gains in our health status.

There’s another side to the story. Health care contributes to U.S. economic growth. According to the Bureau of Labor Statistics, health cae contributed 300,000 jobs to an otherwise stagnant economy in 2011. And in many communities and states, it is the largest employee. Indeed, if you listen to United Health Care ads, headquartered in Minnesota, the health plan has 78,000 people covering 70 million Americans.

In yesterday’s WSJ in an Op-ED, John Mackey, co-founder and co-CEO if Whole Foods Market, and members of the Job Creators Alliance, a non-profit devoted to preserving free enterprise, had this to say,

Business is not a zero-sum game struggling over a a fixed pie, Instead it grows and makes the total pie larger, creating value for all major stakeholders, including employees and the community.

He continues,

Is the United States exceptional? Of course, we are. Two hundred years ago, we accounted for less than 1% of the world’s GP. Today our GDP is 23% of the world’s total and more than twice as large as the number two country’s, China.

Mackey attributes our current lack of economic growth to oppressive taxes and regulation and a dramatic growth in govenment spending. He says the total cost of government is now 40% due to taxes at all government levels, community, state, and federal. The big four tax-eaters – Defense, Social Security, Medicare, and Medicaid – account for 2/3’s of the total budget. Of the entitlement progams, Mackey says we need to steadily raise the retirement age and means-test recipients. Also wemust reform the tax system, lessen regulation, and increase economic freedoms, so entrepreneurship and innovation can flourish and re-energize the economy.

This is Global Entrepreneurs week, and the Kaufmann Foundation in Kansas City, Missouri, says entrepreneurial and innovative small business start-ups, sometimes backed by venture capitalists, contribute disproportionally to economy growth, accounting for as much as 50% of job growth.

Kauffmann points out that foreign enterpreneurs recognize the value of American capitalism. According to a Duke University study, foreign graduates of U.S. universities started 23.5% of new companies in the U.S, from 1995-2005, including 52.4% in Silicon Valley. These companies now emply some 450,000 Americans. Foreign physicians also recognize the value of the American model: 25% of practicing U.S. physicians are foreign-born or trained. The Kaufmann Foundation is backing the Startup Act, which increases access to U.S. educated STEM (Sciene, Technology, Engineering, and Mathematics) graduates educated in the U.S. It is time we acknowledged the value of American free enterpreise, says Carl Schramm, CEO of the Kauffmann Foundation.

Tweet: As the Occupy Wall Street movement reminds us, the contest between capitalism and socialism continues, especially in health care.

Wednesday, November 16, 2011

On SGR and Physician Distrust of Government

If the super committee fails to address the SGR, it will land back in the MedPac court. For the moment, though, another short-term fix, rather than repeal of the SGR, seems the most likely outcome, leading to further erosion in physicians’ confidence in government as a business partner.

John K. Iglehart, “Medicare Payment Reform – Proposals for Paying for an SGR Repeal, “ New England Journal of Medicine, November 17, 2011

November 16, 2011- Ask any physician, and they will tell you government makes a lousy business partner. Government waffles,hassle, baffles, and then downgrades physician pay in an arbitrary and capricious wways,

Take the SGR (Sustainable Growth Rate) – cumulative formula tying the growth of physician fees to the growth of the gross national product, practice costs, and Medicare’s covered population. The principle is that doctor pay should not exceed what Medicare costs. The formula invariably calls for a reduction of physician fees, for example, 27.4% in January 2012.

If Congress passes another short term fix, as it has done 12 times since 2001, the cost of permanent reform would escalate by $600 billion by 2016. If Congress does not fix SGR, it faces a mass exodus of physicians from Medicare, which is unthinkable since the jobs of Congress members depend on the senior vote.

Consequently, seeking an alternative, on October 6, the Medicare Payment Advisory Commission (MedPac) voted 15-2 to recommend replacing the SGR with a “predictable 10-year path of legislated fee-schedule updates.
Under the plan, specialists’ fees would be reduced by 5.9% for each of 3 years and frozen for the next 7 years Fees for primary care services would be frozen for all 10 years. This would save Medicare $100 billion over 10 years, but even then physician fees would double form $64 billion to $121 billion because of the expansion of th Medicare population and the intensity of services.

Over the 10 years drug companies would be cut $75 billion, clinical labs $10 billion, post-acute-care facilities $45 billion, hospitals $25 billion, durable equipment makes $13 billion, and health plans $13 billion. This would not leave many happy campers, including Medicare recipient who would be asked to pony up increased co-pays and a Medigap excise tax, amounting to $33 billion.

Tweet: Congress finds itself on the horns of a dilemma - how to cut the deficit by paying doctors less without driving them out of practice

A Poetic Review of Health Reform Books

Reviewers are usually people who would have been poets if they could.

Samuel Taylor Coleridge (1732-1834), Lectures on Shaespeare and Milton (1811-1812)

These days I find myself getting a bit too bleary-eyed,
Reviewing health reform books to see insight they provide.
I go from right to left,
From cleft, to deft, to heft.
I strive for middle ground,
But little of that is around.

In my own two books, Obama, Doctors, and Health Reform, and The Health Reform Maze,
On implications for physicians I graze,
With seldom a word of outright praise,
And with too much talk of doctor malaise.

On McDonough’s Inside National Health Reform,
A Democratic Insider’s view of the reform storm.
McDonough does his level best to deeply inform,
What went on to bring reform to its present form.

In the book Why Obamacare is Wrong for America,
Four conservative authors have a touch of sciatica.
They present multiple rational reasons numerica,
They say the health law is simply too esoterica,
To work in pragmatic, center-right America.

Then there are two books by two former Canadians
They claim the Canadian system is not for humanitarians.
Of Canada care, The Truth about Obamacare, Sally Pipes speaks for libertarians.
Dr. Kurisoco in Health Reform: End of American Revolution, represents utilitarians.

George Halvorson, CEO of Kaiser, in his two books Health Reform Now!
,Health Care Will Not Reform Itself.
Maintains we have to get off our collective shelf,
Facethe hard facts of system thinkers like himself,
And putaside economic incentives to save ourself.

Finally there’s my favorite, Paul Starr’s Remedy and Reaction
Which eloquently explains our political action and inaction,
Why America is so “peculiar” in its continued fraction,
And why we are so partisan in our complex interaction.

Facts on books on health reform (prices from Amazon)

1. The Health Reform Maze: A Blueprint for Physician Practices, by Richard L. Reece, MD., Greenbranch Publishing, 2011, 290 pages, $48.50

2. Obama, Doctors, and Health Reform: The Health System, from Top-Down to Bottom-Up, by Richard L. Reece, MD, IUniverse, 2009, 291 pages, $17.12

3. Inside National Health Reform, John E. McDonough, University of California Press, 2011, 339 pages, $22.30

4. Why Obamacare Is Wrong for America, by Grace-Marie Turner, James Capretta, Thomas Miller, Robert Moffitt, Broadside Books, 2011, 259 pages, $10.19

5. The Truth about Obamacare, by Sally Pipes, Regnery Publishing Inc., 2011, 276 pages, $6.78 (e-book $8.75)

6. Health Reform: The End of the American Revolution, by Lee Kurisko, MD, Alethos Press, 2009, 238 pages. $19.97 (e-book, $9.97)

7. Health Reform Now! A Prescription for Change, by George C. Halvorsan, John Wiley and Sons, 2007, 360 pages, $16.44

8. Health Care Will Not Reform Itself: A User’s Guide to Refocusing and Reforming American Health Care, by George C. Halvorsan CRC Press, 2009, 157 pages, $20.22

9. Remedy and Reaction: The Peculiar Amerian Struggle over Health Vare Reform, Yale University Press, 2011. 324 pages, $17.46

Tweet: According to these nine reform books, there are nine and sixty ways to fix the system, and every single one is right.

Tuesday, November 15, 2011

On Tweeting, Blogging, and Publishing

November 15, 2011 - Lately I've been sending out tweets to bring what's in my Medinnovation blog and in my book The Health Reform Blog: A Blueprint for Physician Practices(Greenbranch Publishing, 2011) to a wider audience.

If you count my number of hits, i.e.,page views, this strategy seems to be working. I now consistently have more than 400 page views each day. This may be small potatoes in the blogisphere, but I'm enjoying myself.

I may even be informing a reader or two in the crazy-quilt social media world about the impact of the health reform law on every American's health care and every participant destiny who provides services in the medical industrial complex.

Whatever the Supreme Court decides on the constitutionality of Obamacare, I know this: the stakes are enormous, ambiguous, and unpredictable. Hang onto your seat belts, your life jackets,and your collective and individual minds. This is going to be a bumpy ride.

Tweet: Tweeting, blogging, and publishing go together, like a horse and carriage, love and marriage, and the beauty and fallout of each

Monday, November 14, 2011

Supreme Court to Rule on Constitutionality of Obamacare

November 14, 2011- This morning the Supreme Court announced it will hear the case of the constitutionality of Obamacare. It also said it would set aside an unprecedented 5 ½ hours to hear the arguments.

1. Whether Congress has the power to enact the individual mandate – 2 hours.

2. Whether the Anti-Injunction Act bars the individual mandate- 1 hour

3. Whether the mandate, if unconstitutional, is severable from the rest of the Act - 90 minutes
4. Whether the new conditions pertaining to Medicaid constitute an unconstitutional coercion of the states - 1 hour

Arguments will be heard on multiple days in March and April. The decision will be rendered in June. This is the biggest and most significant Supreme Court decision since Roe vs. Wade and Gore vs. Bush. On the decision hinges four other decisions:

1.Whether Congessis the sold judge of its own authority.

2Whether the decision if judicially enforceable.

3.The outcome of the 21012 election.

4. Where health reform goes from here.

Tweet: The Supreme Court will take up the issue of whether Obamacare is constitutional in part or in whole and whether it coerces the states.

The Truth about Health Reform

As scarce as truth is, the supply has always been in excess of the demand.

Josh Billings (1818-1885), John Billings: His Sayings (1865)

November 14, 2011 - The Obama administration has finally caught up with the truth about health reform: You cannot simultaneously boost demand, lower costs, and decrease physician supply.

So today the administration announced plans to expand the health care workforce (Washington Post, November 14, 2011). If you read between the lines, most of these workers will be below the physician level. The administration will spend $1 billion (a paltry sum in Washington these days) to hire, train, and deploy who care for Medicare and Medicine patients.

This effort, says Dr. Donald Berwick, “will open the door for many innovators and organizations that have ideas to bring to the table.” We shall see.

Anyway, it’s about time the administration focused on a growth industry.

• Health care added 300,000 jobs last year, according to the Bureau of Labor Statistics.

• Medicaid will be expanding by 32 million in 2014 and is growing rapidly during the recession. Medicare is adding 12, 000 baby boomer eligible recipients each day.

• Health costs for commercial insurers rose 10% in 2010, and 7.5% according to S&P while the general inflation rate was 1.1% in 2010, and 3.8% in 2011.

• And the American Medical Colleges projects a 63,000 doctor shortage by 2015, and a 130, 600 shortfall by 2015.

Not a Pretty picture.

It is hard to reverse the laws of supply and demand, and of economic gravity. Meanwhile, care demands are expected to rise because of the aging population and the prolongation of life. New technologies are extending the lives of very sick patients, just as smoking cessation live 8 years longer than non-smokers, but as a headline in today’s Kaiser Health News proclaims “Death is Always Cheaper.”

There is no end in sight for the doctor shortage. Older doctors are retiring quicker. Younger doctors are choosing to work shorter hours, many as specialists working regular hours as employees. Morale is low. Doctors are infuriated by new regulations demanding compliance, projected SGR cuts of 27.4%, and control over their incomes by an unelected Payment Commission. They are dubious government “innovations “ with new delivery models such as ACOs will make practice more efficient or save money.

All of this in face of the truth that most patients prefer to see their own doctors, and doctors, by dint of their long years of training and daunting educational debts, will likely have to paid more than other “health care workers,” the administration’s term, not mine.

There is another truth as well. As long as patients and doctors are unaware and insensitive to the true costs of care, a byproduct of entitlement programs promising virtually “free care,” and as long as patients do not “pay up” at the point of care, costs will continue to spiral upward.

As I write in my book, The Health Reform Maze (Greenbranch Publishing, 2011) in a section entitled “Costs and Demands,”

As long as we have an aging population; sick patients who wish to live a little longer; evolving costly technologies, doctor devoted to those technologies, and consumers who demand them, costs will rise.

Tweet: Health reform faces this truth. You can’t simultaneously expand care, lower costs, increase demand, and decrease the physician supply.

Sunday, November 13, 2011

Obama Advisor Says $360 Billion (14% of Health Spending) Wasted on Administrative and Billing Costs

About half of all administrative costs - $163 billion in 2009 – are borne by Medicare, Medicaid, and insurance companies. The other half pays for the legions employed by doctors and hospitals to fill out billing forms, keep records, apply for credentials and perform the myriad other administrative functions associated with health care.

Ezekiel J. Emanuel, MD, “Billions Wasted on Billing,” New York Times, November 13, 2011

November 13, 2011 - Today I bring your attention to an excellent article by Ezekiel Emanuel, MD, advisor to President Obama. Emanuel laments the cost of administration required to submit bills, a burden that falls on patients, who must repeatedly fill out duplicate information before undergoing the most minor of procedures, and doctors, who must spend time and money justifying claims and hiring staff to administer the claims.

Every doctor knows this. They know that 50% or so of their overhead costs go to justifying and figuring out how to wend their way through the coding labyrinth of 7500 or so codes in the CPT code book.

Emanuel explains why billing and administrative exercises are so frustrating, so time consuming, and so expensive. He says there are six steps in the billing process.

1) Determining a patient’s eligibility for services.

2) Obtaining prior authorization for specialist visits and treatments.

3) Submitting claims by doctors and hospitals to insurers.

4) Verifying whether a claim was received and where in the process it is.

5) Adjudicating denials of claims.

6) And receiving payment.

Frustration with this process is why doctors claim so bitterly about bureaucracy, why they tend to code for those claims for which they know they will receive payment, and why they are opting out of third party arrangements with Medicare, Medicaid, and insurance companies.

Emanuel’s answer to addressing these problems is:

• Universal use of electronic health records by physicians and hospitals.

• An electronic credentialing system shared by all hospitals, insurance companies, Medicare, Medicaid, and insurance companies.

• Requiring all parties to use electronic health records.

Doctors are reluctant to install electronic health records because of cost of installation and maintenance, lack of clinical usefulness, unintepretable reports, little clinical impact and benefit, expenses of education and training for data entry, and disruption of practice patterns.

Instead doctors are opting out of Medicare, Medicaid, and third parties and turning to concierge medicine and other forms of cash-only practices, anything to offer more convenience and lower costs to themselves and patients, and anything to escape the burdensome fetters of billing and administration.

Tweet: Administrative and billing costs in the health care system cost $360 billion, 14% of all health care spending (medinnovation blog 11/13)

Creative “Why Not” Approaches to Treating and Paying for the Insured

Creative “Why Not” Approaches to Treating and Paying for the Insured

You see things, and you say,”Why” But I dream things that never were, and I say “Why not?”

George Bernard Shaw (1856-1950), Back to Methuselah (1921)

November 13, 2011- “Everyone knows” that the number of uninsured recently passed 50 million.

“Everyone knows” that paying for these uninsured through government subsidies of up to $88,000 for a family of four will break the federal bank and the banks of the states.

“Everybody knows”the United States and Western Europe can no longer afford generous social welfare programs with an aging population, huge federal debts, and high unemployment.

“Everyone knows,” including the “99 percent” participating in the Occupy Wall Street movement, that these things are a social abomination – a travesty of social justice.

“Everybody knows” that less than 10%, some say 2% of medical students, are entering primary care and that primary care physicians will not accept 50% of Medicaid patients.

“Everybody knows” that administration and billing accounts for $360 billion of the $2.6 trillion spent on health care ( Ezekial J. Emanuel, “Billions Wasted on Billing,” New York Times, November 14, 2011).

“Everybody knows” that about 50% of overhead in a doctor’s office goes for justifying claims.

Why Not Adaptations to These Realities?

So why not do something – in many cases something that has already been done and works – about it?

• Why not post “cash only” charges in the front office for the price of care? Robert Berry, MD, A family physician in Greenville, Tennessee, a rual area with many uninsured patients, has a “cash only” practice and lists his prices in his front office. The uninsured, who can’t afford to pay health premiums, flock to his office for care they can now afford, and for which they no longer have to pay monthly premiums.

• Why not do what the Simplecare network in Reston, Washington has done? It is a “direct cash” practice that charges for short , medium, and long )visits without the hassle of third party visits. Simplecare has crated a simple billing system – 3 codes rather than the 7500 codes found in the CPT code book. Simplecare has national network of some 1500 practices. Many, sometimes most, of Simplecare’s patients are uninsured.

• Why not encourage employers to offer health savings for flexible saving accounts with high deductibles, as 30% of employers are now doing. Employees like these plans, partly because premiums are roughly one-half those of traditional PPOs and PPOs, partly because one-third of those joining were previously uninsured, and partly because they can set aside unspent and untaxed money in retirement accounts. Employers like it because they save up to 40% for health benefits for employees

• Why not allow doctors to deduct the cost of charitable care for the uninsured? Let doctors write off charitable care. This would be elegant solution to the uninsured problem problem: Allow doctors to write off charitable work as a tax deduction. On the downside, this solution would cost the government a slight reduction in tax revenues. On the upside, it would significantly reduce the tax burden for primary care physicians and encourage them to treat the uninsured.

• Why not let doctors charge for phone calls, as attorneys do? Some doctors spend as much as 1/3 of their time on the phone, so they delegate the task of talking to patients to nurses or receptionists. Charging for phone calls would spare patients the expense of office visits. Charging for call is done in some European countries, like Denmark, and is accepted by patients and doctors alike. Charging for phone calls had become a lively subject at medical conferences across the country. After all, Donald Berwick, administrator for CMS, has declared “The health care encournter as a face-to-face visit is dinosaur.”

• Why not more walk-in clinics, retail clinics, ambulatory clinics, home care visits ? Why not more membership care models, where patients pay a fixed amount for care, whether they are seen or not? Why not indeed? There is more than one way to make care affordable for the uninsured without resorting to massive federal subsidies or resorting to the last resort – emergency room care?

• An why not, critics of the present system will counter, let government preside over the system- paying for everyone, setting the rules, and offering the same level of care for all? Two reasons why not: one big government cannot possibly and fairly manage a complex adaptive system; two, America is a nation with a culture that cherishes freedom and individualism.

Creative approaches to making care affordable and convenient for the uninsured are evolving without requiring massive federal intervention.

Saturday, November 12, 2011

The Physicians Foundation Begins to Roll Back the Tide Against Independent Physicians

Truly there is a tide in the affairs of men, but there is no gulf-stream setting forever in one direction.

James Russell Lowell (1819-1891)

November 12, 2011 - The Physicians Foundation deserves greater visibility for its contributions for improving the practice of medicine.

Created in 2003 with a $115 million endowment from several major insurance companies, the non-profit organization has issued $28 million in grants to physician and other organizations to improve care and to protect independent physicians. These physicians provide most of the care for Americans, but their numbers are fading as they come under increasing economic and political pressure.

Here, Philip Betbeze, senior leadership editor with HealthLeaders Media, in a November 11 article entitled “Fighting the Tide Against Independent Physicians, “ describes the plight of independent physicians and what the Foundation is doing to reverse the tide. For emphasis, I have italicized the contribution of the Foundation in turning back the tide.

“Independent physician practices are slowly fading away, and with the advent of healthcare reform, the pace may be about to get much quicker. It's only one of a few troubling signs about the physician labor pool, which seems increasingly dissatisfied with their career choice and the direction of the healthcare industry.

Physicians are being pushed to employment in hospitals or by hospitals, and they're not necessarily happy about it. To be sure, some, especially recent medical school graduates, like the safety, the (somewhat) regular hours, and the freedom to practice medicine rather than worrying about small business concerns that an employment contract offers.

On the whole, though, physicians' dissatisfaction is palpable. According to the physician component of the 2011 HealthLeaders Media Industry Survey, 58% of doctors say that healthcare reform has weakened their organization's financial position—even though many of its provisions haven't kicked in yet!

Even worse, 60% say healthcare reform has weakened morale, and only 67% of them would encourage their child to enter healthcare. Not exactly encouraging for an industry that needs more physicians.

Here's further evidence that physicians are rethinking their choice of career: Merritt Hawkins, a national physician search firm, recently released a survey showing that, despite the fact that 75% of physicians coming out of training are getting at least 50 job solicitations, close to 28% of the same group said that if they had the chance to do it all over again, they would choose a different profession.

How depressing is that?

I could imagine, in theory, being quite happy in a field that provided me 50 job offers upon completion of my studies and training. I hope I'm not letting a big secret out of the bag by saying the demand for journalists is just a little less strong than that. In any case, physicians see that reimbursements are declining.

They have huge debt, generally, and they're not sure when they'll ever be financially whole again, given the expected clampdown on their future earning potential.

In an excellent story in the forthcoming November issue of HealthLeaders magazine about the realities driving physician employment at hospitals, my colleague Karen Minich-Pourshadi says that the percentage of truly independent physicians, according to the American Medical Association, has been declining by 2% a year and is projected to decline by as much as 5% annually by 2013.

At least one relatively deep-pocketed organization is doing the best it can to hold back the tide not only of doctor departures from the field of medicine, but also departures for employment in big institutions.

"Because bigger is not always better," says Lou Goodman, president of the Physicians Foundation, a nonprofit grant-making entity that was formed with a $115 million endowment. The endowment came from a group of physician societies who won about $1.5 billion in retrospective and prospective relief resulting from a class action suit in 2003 against several major insurance companies.

Physicians alleged, successfully, that the companies were using a hidden system (colloquially called a black box) to deny reimbursements to which physicians were entitled under their contracts with the insurers.
The foundation has awarded about $28 million in grants since its founding, and usually funds research and ventures that are in the business of keeping physicians who want to be independent.

"All the incentives are arrayed against it," he says. "We're collecting information, through our medical practice task force, with a survey of young physician needs. They're not seeing a lot of alternatives to employment."

In an effort to help physicians see another way, the foundation has developed technological solutions aimed at the independent physician office, and they are committed to helping educate physicians on the realities of running a business, even one that's challenged by healthcare reform.

Together with Northwestern's Kellogg School of Management, the Physicians Foundation hosts a three-day educational institute with Kellogg professors at which presidents of state medical societies learn negotiating skills and other business concepts so they have a toolkit to deal with hospitals, insurance companies, and employers.

Further, they've developed a Roadmap for Physicians to Health Care Reform, a simplified guide for independent physicians that "explains to physicians in straight English what the Affordable Care Act means to the doctor and his patients and what opportunities they might have to participate," says Goodman.

He hopes these efforts encourage physicians of an independent bent that they can maintain that, though he concedes it's a tough sell sometimes. Goodman says that many of the physicians who initially choose employment with a hospital or large group also choose to leave that position after three to five years. Whether or not they go to another employed position is immaterial, he says. They need other options.

"They feel under pressure, stress, unappreciated, overworked, and treated more like housekeeping than the fine professionals that they are," says Goodman. "But there's no medicine without physicians."

Tweet: The Physicians Foundation, awards $ millions in grants to doctor groups, conducts surveys, and hosts a business institute for M.D. leaders

Three Republican Senators Question Value of $10 Billion CMS Innovation Center

Are government programs worth deficit spending costs?


November 12, 2011 – In my book The Health Reform Maze (Greenbranch Publishing, 2011), I said this about government innovation.

Government is poor at innovation:

• 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 with taxpayer money.

Perhaps these inherent governmental weaknesses can be corrected, or at least modified. CMS, the mother of all federal agencies with the biggest budget of them all at $1 trillion per annum, is reaching out to the private sector.

CMS is initiating an Innovation Advisory Project, Beginning in December 2011, CMS will recruit 50 innovation advisors from the private sector to help define and find what innovations work.

As this recruitment process progresses, three Republican Senators – Orrin Hatch (R-Utah), Mike Enze (R-Wyo), and Tom Coburn (R-Okla) are asking the Government Accountability Office to investigate to see if the $10 billion devoted to the Innovation Centers of Medicare and Medicaid, part of the Accountable Care Act, is worth it.

The Senators worry the Centers may be a federal boondoggle. They seek an accounting pf all CMS Innovation Center expenditures to test new payment and delivery models.

Tweet: Three Republican Senators – Orrin Hatch, Mike Enzi, and Tom Coburn- question the worth of the $10 billion CMS Innovation Centers.

Health Reform Remedy and Reaction

Force is not a remedy.

John Bright (1811-1889)

November 12, 2011 - I note with pleasure that the Yale University Press has released Paul Starr’s new book, Remedy and Reaction: The Peculiar American Struggle over Health Care Reform, available at $17.35 on Amazon. For that price it’s a steal.

If you’re going to read one book on the ideological chasm over health refvorm between liberals and conservatives, this is the book. Paul Starr is one of the few liberal wonks who fully understands the conservative world view of health care and the dynamics behind the rise of profit and entrepreneurial health care.

He first articulated this understanding in his 1982 book The Social Transformation of American Medicine; The Rise of a Sovereign Profession and the Making of a Vast Industry, Basic Books.

I used this quote from his 1982 book to introduce my 1988 Book, And Who Shall Care for the Sick (Media Medicus,Minneapolis),

In the twentieth century, medicine has been the heroic exception that sustained the waning tradition of independent professionalism. Physicians not only escaped from corporate and bureaucratic control in their own practices; they channeled the development of hospitals, health insurance, and other medical institutions intoforms that did not intrude upon their autonomy. But that except now be brought into line;the great irony is that the opposition of the doctors and hospitals set in action entrpreeurial forces that may end up depriving both private doctors and local voluntary hospitals of their traditional autonomy.

Well said.

Those forces culminated in the health reform law, The Patient Protection and Affordability Care Act, which the Democrats passed in the face of unanimous Republican opposition on March 23, 2011. Ironically, this law, which so far neither protects patients nor makes care more affordable, could be the undoing of President Obama in the November 12, 2012 elections.

Paul Starr, professor of sociology and public affairs at Princeton, co-founder and co-editor of The American Prospect, and chief spokesman for the failed Clinton reform effort in 1994, is a veteran observer of national political wrangles over health reform and of the widely different world views of liberal and conservatives. One view focuses on centralized government control and the other on decentralized market forces.

Rather than give my own views, which I have outlined in my book The Health Reform Maze: A Blueprint for Physician Practices (Greenbranch Publishing) and in 2015 Medinnovation blogs, which bear the slogan, “Where health reform, medical innovation, and physician practices meet,” I shall reprint the Yale University Press’s review of his book, which is accurate and balanced.

"In no other country has health care served as such a volatile flashpoint of ideological conflict. America has endured a century of rancorous debate on health insurance, and despite the passage of legislation in 2010, the battle is not yet over. This book is a history of how and why the United States became so stubbornly different in health care, presented by an expert with unsurpassed knowledge of the issues.

Tracing health-care reform from its beginnings to its current uncertain prospects, Paul Starr argues that the United States ensnared itself in a trap through policies that satisfied enough of the public and so enriched the health-care industry as to make the system difficult to change.

He reveals the inside story of the rise and fall of the Clinton health plan in the early 1990s—and of the Gingrich counterrevolution that followed. And he explains the curious tale of how Mitt Romney’s reforms in Massachusetts became a model for Democrats and then follows both the passage of those reforms under Obama and the explosive reaction they elicited from conservatives. Writing concisely and with an even hand, the author offers exactly what is needed as the debate continues—a penetrating account of how health care became such treacherous terrain in American politics. “

Unfortunately, Democrats, with an eye on their historical legacy, sought to force their health reform remedy through without thoughtful debate and consideration of the consequences.

Paul Starr’s new book, Remedy and Reaction: The Peculiar American Struggle over Health Reform, is a must read (see

Friday, November 11, 2011

Returning Veterans as Entrepreneurs

So far, the entrepreneurial economy is purely an America phenomenon.

Peter F. Drucker (1909-2005), Innovation and Entrepreneurship: Practice and Principles,1986

Innovative entrepreneurs and dedicated clinicians have found ways to break down barriers and redesign care to better help their patients and communities. But bringing the best in our system to every community in the country is the health care challenge of our time.

Donald M. Berwick, MD, “Making Good on ACOs’ Promise – The Final Rule for the Medicare Shared Savings Program,” New England Journal of Medicine, November 10, 2011

November 11, 2011, Veteran’s Day - This morning I read an article “On Veteran’s Day, An Opportunity for Entrepreneurial Excellence, “ in Real Clear Politics. Since 2002, Its author, Carl Schramm , has been president and CEO of the Kauffman Foundation. Kauffman is the world’s leading organization dedicated to creating new firms and understanding their role in economic growth.

Schramm observes,

“On November 11, Veterans Day, we as Americans have an opportunity to recognize our great debt to our armed forces. At the same time, we can and should acknowledge how veterans’ service to the country can continue even after they have taken off the uniform.

The men and women who have served share a number of common traits: persistence, decisiveness, tenacity, adaptability, comfort with risk and preference for bold action, and personal sacrifice for something larger than themselves.

Not surprisingly, these are traits that are also often attributed to successful entrepreneurs.

In fact, many of America’s most innovative – and most successful– companies were founded by veterans.

Consider FedEx, founded in 1971 by Fred Smith, who just a few years earlier had been serving as a Marine in Vietnam.

Veterans who are also entrepreneurs say military service imbued them with a number of attributes that equipped them for success as business founders. They know how to work in teams, to lead, and to build camaraderie. They are decisive in the face of the unknown – it’s something they had to confront regularly. They know how to not only survive, but thrive in chaotic situations – invaluable raining for the inevitable surprises that confront every entrepreneur sooner or later.

They also understand the need for a strong work ethic. “When I saw an opportunity for this business, I hustled every day, working 80 hours a week,” one veteran told the Wall Street Journal recently.n “Because of my experience in the Marines, the hard work didn’t scare me.”

America’s veterans have served at the frontiers of our nation’s foreign policy. It is from a desire to serve that they first donned a uniform, and even though they may no longer wear it, the desire remains.

Our country would do well to make it easier for them to serve at the frontier of our nation’s economy–at a time when we need to fully tap the entrepreneurial potential of all of our citizens. Perhaps our veterans today can become American’s “greatest generation” of entrepreneurs tomorrow.”

When I finished reading Schamm I read Dr. Donald Berwick’s piece in the NEJM on what America needs to cut Medicare costs. Bewick described how CMS had reached out to the hospital and physician communities for comments on the initial March 31, 2011 guidelines, How CMS had received 1200 formal comments for change, and how CMS how modified the rules to satisfy reluctant providers, who so far have said, still no sell, too many risks, too rules, too little to gain, and too much to lose.

Then I turned to the Morning Joe TV program, where I watched Ezekiel J Emanuel, MD, former White House Advisor, talk of the promise of Obamacare.

Dr. Emanuel said the key to cutting health care spending was finding new ways to pay doctors besides fee-for service. This could best be done, he explained , through government-directed programs such as ACOs, bundled billing, and medical homes.

The government should spend federal monies only to those doctors who follow government guidelines and protocols based on the precepts on data from best practices and evidence-based medicine.

Emanuel said fee-for-service medicine, with doctors paid to do more, was the central cost and quality problem of our system.

He dismissed the notion that “defensive medicine” contributed to high costs and that malpractice reform would cut costs.

As I read Berwick’s comments and as I listened to Emanuel, who writes regular opinion columns for the New York Times, I realized a wide , perhaps unbridgeable, chasm exists between the philosophy of the entrepreneurial community, who believe innovative bottom-up activities, as the best means of promoting growth, cutting cost, and improving care, and Obama followers, who maintain that government actions promoting a “shared commitment” to “coordinated care” are the only path toward financial sustainability, i.;e. adaptation of the U.S. to a European-style social welfare model.

In his 1986 book, Drucker pointed out that from 1970 to 1984, the United States economy created 20 million jobs, while Western Europe lost 3 to 4 million jobs. Drucker attributed this gap to American entrepreneurial management and to small businesses entrepreneurs. He commented, “Fastest growing are the ‘freestanding” health facilities, such as hospices for the terminally ill, medical and diagnostic laboratories, freestanding surgery centers, freestanding maternity homes, psychiatric ‘walk in’ clinics, or centers for geriatric diagnosis and treatment.

Today I would add to this list of entrepreneurial-created facilities - hospital satellite clinics, orthopedic and other speciality “walk-in” clinics, free-standing EMR centers, focused facilities for diseases like diabetes or for conditions like wound healing, cosmetic-related centers, urgicenters, fitness centers for the elderly, concierge practices.

But since 1986, two fundamental thing have changed in the global economy.

entrepreneurs around the world have taken note of America’s success with its entrepreneurial economy. These foreign entrepreneurs – in Israel, and emerging economies such as India, China, and Brazil – are coming to America to set up entrepreneurial companies

Two, America-trained entrepreneurs are returning home to apply their U.S.-acquired skills. Native sons have gone from working in the West to fixing problems at home.

We need to encourage them to keep on coming by loosening restrictions on visa requirements and we need encourage them to stay. And we need to encourage our returning veterans, who have technological and leadership skills, to become entrepreneurs.

Tweet: Veterans have entrepreneurial skills the U.S. needs: decisiveness, adaptability, comfort with risk, action, and personal sacrifice