Thursday, July 31, 2014

Private Practice Future Under ObamaCare

Government is certainly all pervasive. But is truly strong? Is it only big?

Peter F. Drucker (1909-2006), “The Sickness of Government,” chapter in The Age of Discontinuity, Harper & Row, 1967-1968

Governors’ mansions and state legislatures, in the courts, among health care providers, and most importantly, around the kitchen tables of ordinary Americans. Battle lines are being drawn in the Congressional and state races for the 2014 mid-term elections to be held on November 4, 2014. Majority control of the House and Senate in the U.S. Congress and thirty-six Governors’ seats are at stake. Practicing physicians are on the frontlines of the ACA debates.

Kathy Means and Ken Monroe, "The Patient Protection and Affordable Issue Beyond the Horizon into 2015", The Physicians Foundation, White Paper, 2014

As is my wont, I have been reading two things at once – one is a 1967 book by Peter F. Drucker, the imminent social and management theorist, The Age of Discontinuity (1967): the other is a 44 page white paper,” The Patient Protection and Affordable Care Issue Beyond the Horizon into 2014, Part II” by two well-known and widely respected Physician Foundation consultants, Kathy Means and Ken Monroe,

• I will let Drucker speak for himself, “There is mounting evidence that government is big rather than strong; that it is fat and flabby rather than powerful, that it costs a great deal but does not accomplish much..In the seventy years or so between the 1890s to the 1950s, mankind, especially in the developed countries, was hypnotized by government. We were in love with it and saw no limits to its abilities or good intentions. It promised: “Utopia is here – all that is needed is to take everything away from the “wicked, selfish interests.” Once they had been eliminated, the right course of action would emerge from “the facts” and decision would be rational and automatic, and would be turned over to government…The British, in adopting the “free” health service believed that medical care would cost nothing. There are, of course, never enough rich people to carry the burden of any general service. The best we get from government is competent mediocrity. What is impressive is the administrative incompetence. Every welfare state reports the same confusion, the same lack of performance, the same proliferation of agencies, of program, of forms, and the same triumph of rules over results. “

What Drucker was saying, of course, is that government cannot be everything to everybody in a pluralistic society calling for specialized competencies among individuals and organizations. For examples of this incompetency, look no further than the disastrous launch, the rapid rise in health care premiums, and the coming bailout of health plans due to demographic miscalculations of who might enroll in ObamaCare exchanges.

• Fast forward to 2010 to 2014.the first 4 ½ years of ObamaCare – with its expansion of big government and the passage of a massive, complex health law which promised to offer coverage of everything for everybody, and a botched and incompetent implementation of, while retaining your doctor and your health plan, and lowering your premiums. One of its hidden premises was that we would have reform those “wicked” overpaid, under performing, fee-for-service physicians. We would reduce their pay by 30% or more, eviscerate those “overvalued codes,” introduce an elaborate coding system that would systematically decrease or bundle their pay, force them to work on salaries, attack the fees of overpaid specialists (e.g, cardiologists, orthopedists, radiologists, ophthalmologists), decrease reimbursements for imaging procedures and laboratory work, and restructure and restrain hospital fees and penalize hospitals in every way possible.

For more on the critical issues facing physicians, go to the Physicians Foundation website, and download “The Patient Protection and Affordable Care Issue Beyond the Horizon into 2014, Part II.”
ObamaCare Consequences Reported This Last Day of July

Laws have consequences.


• Spending $15 billion more of government funds for doctor training will go disproportionally to Northeastern teaching hospitals, critics assert.

• Just 6 states and D.C. will use new Medicaid money to raise pay of primary care doctors.

• is not yet ready to enroll more people on November 15, 2014 – next signup period- due to multiple flaws on back-end of website.

• Government Accounting Office (GAO) concludes was badly planned , had insufficient oversight, and was poorly implemented, despite $840 million spent on its oversight and implementation.

• GOP-led House of Representatives votes 225-201 to sue Obama in first-of-its-kind lawsuit over historic constitutional checks-and-balance fight. Obama says it’s time to stop “hating;” GOP says there’s a time for hate and a time for lawyers.

• House of Representatives easily approves long-over-due VA $17 billion overhaul providing private care outside VA, hiring of more doctors and nurses, and rewriting rules to fire 5 senior executives.

• Humana, Wellpoint, and Cigna report lower earning or losses due to recent ObamaCare signups and higher than expected enrollments of sick, women, and older people, setting stage for health plan bailouts. Sign-up problems may sldo cause sharp spikes in health care premiums.
Video Link to my May 9 talk Before the American Association of Physicians and Surgeons in Minneapolis can be viewed at:

The talk, entitled “Direct Pay Independent Practice: Remnant of the Past and Wave of the Future,” is 20 minutes long.

My Kindle book, by the same name, is available on Amazon for $9.97

My new E-book Understanding ObamaCare: Travails of Implementation: Notes of a Health Reform Watcher is now on Amazon. The Kindle edition sells for $3.99. You may be interested in reading it since ObamaCare may determine the outcome of the November midterm elections. You may also order the book from Westbow Press, a division of Thomas Nelson Publishers, or its 35,000 outlets, which include bookstores, who can help order the book for you. This is the first of 3 E-books on ObamaCare. The second book will be called ObamaCare Revealed, and the third will be ObamaCare: Dead or Alive.
Richard L. Reece, MD, 1-860-395-1501,

Wednesday, July 30, 2014

Mark Twain and Health Reform

It’s not as bad as it sounds

Mark Twain (1835-1910), speaking of Richard Wagner’s music

Last night I was watching a PBS documentary on Mark Twain by Ken Burns on PBS . I was struck by Twain’s humor, worldliness, pride in America, racial tolerance, and grasp of how grass roots Americans think.

I got to thinking about what he would say about health reform. I went looking for Twain quotes that might apply to health reform and ObamaCare, and I came up with these.

• There’s a million in it!
In our day, it’s more like $3 trillion.

One of the brightest gems of New England weather is the uncertainty of it. Ditto, ObamaCare weather. It’s hot and cold with gusts of wind. But it's not the heat, it's the humility.

• The Child of Calamity!
Otherwise known as unintended consequences, such as 1 in 5 Americans deciding not to have any health plans at all. They have decided they're too costly.

I said I didn’t know. Obama’s stock answer when he learns of an unexpected scandal, “ I didn’t know. I learned it on the news.”

All the modern inconveniences. Such as coping with ACA rules and regulations and unexpectedly high premiums

When angry, count four, when very angry, swear. When very, very angry, vote.

Nothing so needs reforming as other people’s habits. Individuals in a Democracy are stubborn. They don’t want government mandating what they should do and not do and why and what they should pay and otherwise tinkering with their freedom.

Put all your eggs in one basket and – and watch that basket. The basket is known as the one-size-fits-all basket which contains all the services you or others might theoretically need.

• Noise proves nothing. Often a hen who merely laid an egg cackles as iif she had laid an asteroid.
Obama may have laid an egg, and no amount of cackle or crackle will make it into an omelette.

• Laws are sand, customs are rock.
Culture shapes our health system engine, throwing sand in the gears doesn’t make it run better.

• It is a difference of opinion that makes for horse racing.
And Senate races.

I could do it as easy as falling off a log. ObamaCare is not a log.

• The report of my death is an exaggeration.
So is the death of ObamaCare.

Familiarity breeds contempt and children. And frustrations with

All kings are rapscallions. That goes for politicians, too.

• All I know is that man is a human being – that is good enough for me.
And it is good enough for the uninsured and the middle class.

• When it doubt, tell the truth.
Sometimes that’s hard when you’ve broken your major promises about keeping your doctor and health plan and lowering premiums.

• Be good and you will be lonely; be good and you will be eccentric.
It’s easy to be good when you’re spending other peoples’ money, but you may end up lonely and eccentric.

• I have been reading the morning paper. I do it every morning - well knowing that I shall find in it the usual depravities and basenesses and hypocrisies and cruelties that make up civilization.
Welcome to the health care debate.

• I have had a “call” to literature, of a low order- i.e.humor. It is nothing to be proud of, seriously scribbling to excite the laughter of God’s creatures.
It is sad to say, but there is nothing funny to be said about ObamaCare.

Tuesday, July 29, 2014

Obama Impeachment as Fundraising Tactic

Dems Can’t Stop Talking About Impeaching President Obama

Mike Lillis, title of article in The Hill, July 29, 2014

Think about it, threat of impeachment,
Is heaven made for demagogic preachment.

Boehner may call impeachment talk a "scam".
But to Dems, it’s verbal battering ram.

You can call Obama’s critics racists,
You can even call them Tea Party fascists.

When Boehner proposes to sue the President,
Dems know what he has in mind isn’t pleasant.

The prez says, go ahead: sue me, impeach me.
He knows odds for success will not come to be.

Besides, in the land of Obama milk and honey,
Talk of impeachment raises gobs of money.

And if the President is expert at anything,
He's an expert on the fund raising thing.

Corporate America and Health Reform

The best we get from government in the welfare states is competent mediocrity. What is impressive is the administrative incompetence. Every country reports the same confusion, the same lack of performance, the same proliferation of agencies, of programs, of forms, and the same triumph of accounts rules over results.

Peter F. Drucker, (1909-2006), father of modern management, social philsopher, and conservative economist

With ObamaCare, corporate America is up against it.

They are being asked to cover all workers if they have over 50 employees or pay a stiff fine.

They are being asked to offer often unaffordable same-size-fits-all plans covering 10 essential benefits to all workers whether their employees need these benefits or not.

They are being asked to carry the load for over 150 million workers, while being taxed at the highest corporate tax in the world 39%, while the average corporate tax for the rest of the developed world is 25%.

Corporate Options

What are the corporate options?

• They can offer wellness programs and bonuses for workers who participate or who have measurable health improvements. Most major companies are doing this, but they are running up against employee resistance. People do not like being told how much they should exercise, eat, drink, smoke or weigh, or how large their waistlines should be. Those are private matters. Americans are increasingly resisting private surveillance and intrusions into their private lives and calls for behavioral changes.

• They can hire in-house doctors, pay companies who offer these services on an ad hoc basis, or set up worksite clinics. These are fine ideas, best suited for large companies with enough employees and enough scale to make these options work. Through these options, they can hire nurses and doctors to teach preventive care, provide care at the workplace, pick effective low-cost specialists.

• They can offer and encourage Health Aavings Accounts (HSAs) plans as the only or the preferred option to traditional PPOs and HMOs. This opyin shifts choice and costs to workers, who now have the incentive and responsibility of choosing their own doctors, negotiating on the basis of price and quality, taking better care of their health, and putting aside money in savings accounts for a rainy day and retirement. It is a powerful option and is catching on fast among employers and employees alike because of cost savings for business and lower premiums for workers.

• They can set up private exchanges to manage the costs for retirees and dependents. This is now being actively pursued by large corporations with an aging work force.

• They can directly contract and directly pay for certain health care services with retention payments for concierge practitioners and for commonly performed ambulatory surguries independent of third party involvement. This movement is in its infancy. But 3rd party administrative takes as much of 40% of the health care dollar. By bypassing 3rd party bureaucracies , be they governmental or private, companies and private individuals saves enormous amounts of money, but there are concerns about assuring quality of services being offered, the health outcomes of patient receiving these services, jurisdictional conflicts with health plans and hospitals, and short circuiting of government social policies.
Medicare- for-All

For every complex problem there is an answer that is clear, simple, and wrong.

Henry Mencken (1880-1956)

With 99 days to go before the midterms, when the fate of ObamaCare may be decided, people are debating how best to cover the uninsured.

I’ve been talking to three Democratic internist friends, contemporaries of mine, about ObamaCare prospects and they all say the answer is simple: Medicare-for-all.

Medicare-for-all is a simple, direct, and compellingly attractive answer. Medicare has worked for 50 years. People like it. It reeks of compassion.

Above all, Medicare-for-all would remove, minimize, or control those profit-mongers - drug companies, device-makers, business-men of every ilk, those proponents of capitalism -from the medical-industrial- complex. Business and medicine don’t mix. Never mind that profit is the life-blood of capitalism and socialism, for that matter. Without profit, social programs are not feasible. Don't sweat the details. Regulate the hell out of those greedy business bastards. That is the answer.

In any event, Medicare-for- all assigns clear responsibility to government. No one need worry anymore about who pays for care. Big Brother does. We all do. It is health care utopia – one for all, all for one, and everything for everybody, within rationing limits of course.

There is one problem - with the aging population, life-spans soon stretching to over 90, governmental managerial bureaucratic inefficiencies and perpetual cost overruns- Medicare-for-all is unsustainable. Even in its present form, Medicare is the largest and fastest growing share of the national budget. It will be consuming 20% of it by 2050. Compare that to the 4.4% now spent on the military.

Even now, Medicare does not have the managerial skills to implement a Medicare-for-all program – it has to outsource care. Just this week, Congress reached a deal to spend $10 billion to cut waiting times for Veterans in the VA by outsourcing care to the private sector. Think of The VA as a single payer microcosm of Medicare-for-all. The appetite of government for more money as a solution never ends.

In my conversations with my three internist friends, they all said they admired the late Arnold Relman, MD, who died last week at age 91.

Now there was a visionary of Medicare-for-all. As editor of thee New England Journal of Medicine Relman advocated single-payer by putting doctors on salary in large integrated groups and removing the profit motive from medicine.

Separating medicine from business is not so easy. Hospitals, which are businesses, make up 30% of health spending, and are the largest businesses and biggest employers in most cities. Health care hires 10% of Americans. Physician services comprises 10% of tax revenues for most states. Businesses offer health coverages for 156 million Americans. Business-minded entrepreneurs and innovators develop the medical devices and drugs that advance medicine. Health plans are mostly for-profit businesses that must satisfy investors.

So much for the health care-business quandary. Relman was an articulate powerhouse in presenting his point of view. In a moving tribute to Relman in the July 24 New England Journal of Medicine, the Journal’s president editors had this to say.

“Between 1977, when he assumed the role of editor of the Journal, and 1991, when he retired from that position, Bud wrote more than 100 editorials on a wide range of topics. His writing style was lucid and direct, and he framed his arguments with great clarity of thought. “

“He was a master in the use of the bully pulpit, and he wrote passionately about many aspects of health care, especially voicing his unshakable opposition to the intrusion of business interests into the practice of medicine. He fought against commercialism and the rise of for-profit hospital systems. His views on health care, particularly his support for a single-payer health insurance system, were often controversial, and at times he became a lightning rod. He gave testimony on health care on Capitol Hill and spoke in many other venues, always with confident determination. Though his opinions often came under attack, he successfully prodded the health care community in an ongoing national debate about our health care system, the likes of which had never occurred before.”

Arnold Relman, RIP. Like my internist friends , I admired Relman. But in my view, he was an impractical idealist, caught up in a single-payer dream that will never die even though it has been debated, deflated, and defeated for over 100 years.

Monday, July 28, 2014

VA Deal Reached

See how the World rewards its Veterans!

Alexander Pope (1688-1744), Moral Essay

Just when it seemed the do-nothing Congress we do nothing, it did something. Just before its five week August recess, which will be devoted on how to prepare for the midterms, it reached agreement on a $17 million deal on how to clean up the VA mess.

The mess plaguing the 1000 hospital and clinic system were the unconscionable wait times for veterans to see a doctor, during which 1000 or so are said to have died. All told, 46,000 waited more than 3 months to be seen, and 7,000 were never seen after they applied. It was generally agreed that once they were seen, they received excellent care.

Of the $17 million, $10 million will go to being seen by private doctors outside the system, especially for veterans living more than 40 miles away from a VA facility; $5 million will be appropriated to hire new doctors, nurses, and other health care personnel; $1.5 billion will go for leasing 27 new clinics; and an unspecified amount will be spent for scholarships for veterans and for loans for in state tuition.
ObamaCare: The Big Bet

Put your money down, and place your bet.

Casino expression

In retrospect, it seemed like a good bet.

Health costs were rising. People were unemployed. Money was tight. They didn’t have money to spend on health care. You controlled all three branches of government. Fifty million people were uninsured.

Why not invest trillions in a nation-saving stimulus program, including a million or so for electronic health records? Why not pass a trillion dollar health reform program? The country needed your programs. You were the country’s transformational savior. You needed a big bang to cement your legacy in the pantheon of presidents.

So what if Republicans en masse opposed you. So what if the states opposed your reform proposals for Medicare. Just tell the states if they didn’t set up exchanges, they would get no tax credits and they would have to pay for the other states. That was his chief adviser, Jonathon Gruber’s , spin on what happened.

To hell with the Republicans and the Red states. It was full speed ahead.

Anyway, using federal largess to covering the uninsured was a noble idea. But as Samuel Johnson (1709-1785) once reminded us, “The road to hell is paved with good intentions.”

ObamaCare was and is a huge gamble. As Michael Barone points out: “Obama Democrats Lose Their Big Bet on Health Health Exchanges, “ Washington Times, July 25, 2014”.

“Under previous court decisions, Congress couldn't force state governments to administer federal laws. So congressional Democrats, seeking to muscle states into creating their own health insurance exchanges, chose to provide subsidies only for those states. Those opting for the federal exchange would have to explain to voters why they weren't getting subsidies.”

But this bet to muscle the states failed. By August 2011, only 10 states had created their own exchanges, and 17 states explicitly refused to do so. Health and Human Services Secretary Kathleen Sebelius kept extending deadlines to force states to create their own exchanges. The Supreme Court complicated things in 2012, by ruling government couldn't force states to pay for Medicaid expansion.

“Congressional Democrats and the Obama administration bet that they could force the states to do their will. When they lost their bet, the administration ignored the Constitution and ordered the spending of monies that Congress never authorized.”

“This,” said Barone, ” was lawless behavior, and reckless as well. It promised to individuals acting in reliance on government regulations money that was subject to being clawed back if a court applied the statute as written.”

Why did the bet fail? For several reasons.

• ObamaCare was unpopular from the onset by double digit margin, at this writing by 59% to 38%. People didn’t like being mandated to buy insurance. Employers didn’t like being told to cover employees or pay stiff fines of $3000 for each uncovered worker if they had over 50 employees. Religion minded corporations resented being forced to pay for contraceptives. Citizens didn’t like sharp increases in premiums to pay for benefits they didn’t need and to pay for the care of others.

• To the shock of the administration, people preferred local marketplace care to heavily regulated “free” government care. They disliked bureaucratic delays and restrictions and lack of access to local hospitals and long time doctors, which they had been promised they could keep.

• People began to have questions about the competence of government (58% in recent polls say the Obama administration is “incompetent”). This perception stems in part from the recent botched launch, the multiple delays in implementing ACA provisions, and the waivers being granted to, among others, congressional staffs, unions, and political friends.

• Critics began to level charges whether it was legal for government to spend trillions of dollars for things never authorized by Congress , as required by the Constitution. And they began to ask, why doesn’t the administration enforce the law as written, namely, only the states, not the federal government, can provide subsidies. The ObamaCare bet wasn't helped when it was learned that one of its chief architects, Jonathon Gruber, an MIT economist, revealed that he and the administration intended from the beginning to have only states pay for subsidies ("ObamCare's Insider Testimony: An Architect of the Health Law Backs Up Critics," WSJ, July 25, 2014).

The bottom line of the big bet: Obama succeeded in expanding government, but in the process, he has discredited big government. A lost bet may discourage future massive expansion of federal programs that require, as most do, matching spending by the states and approval by Congress and the Supreme court .

In the end, the owners of the national casino, American voters, will have to decide what the rules of the house are.

Sunday, July 27, 2014

Jonathon Gruber, ObamaCare Chief Adviser, Pulls Foot out of Mouth

Foot-in-mouth disease - Saying the wrong thing at the wrong time.


Halbig-Burwell's court of appeals decision,
Is undergoing liberal revision.

The court said only states could offer a subsidy.
That decision, says the left, was a right-wing atrocity.

ObamaCare’s authors say they had a lapse.
A momentary language relapse.

The law did not really mean what it said,
The law, you see, was not meant to be read.

What matters is what was truly meant,
Let not its intent by critics be bent.

But now Obama's chief adviser, Gruber of MIT.
Who is no fawning, modest Walter Mitty,

Is quoted as saying in twenty twelve,
In an off-the-cuff remark off the shelve.

Before Chief Justice Roberts had made his rule.
That states need not join the Medicaid pool.

Gruber said states should set up their own exchanges,
So as to into federal budgets dig their phalanges.

He now says he put his foot in his mouth,
His mind, in a meandering moment, went south.

What he said was one of those human mistakes.
It was a comment which he now forsakes.

With the ACA, loose lips may not sink the ship.
But it’s telling from whose lips came the slip.

For Gruber to err was no doubt human,
To now take his foot from his mouth shows his acumen.

And maybe what was originally written,
Was not a mistake by the reform-minded smitten.

In the end subsidies will cost $1 trillion a year,
That, we must all admit, is no small beer.

$1 trillion a year is no small matter,
As part of the federal budget batter.


Adam Serwer, "Adviser's Past Remarks Could Give ObamaCare Headache," MSNBC, July 26, 2014

Saturday, July 26, 2014

Quotes to Note: Underappreciated and Overlooked Facts about Hospitals

We fail to appreciate merits of which we have no conception.

James Fenimore Cooper (1789-1851), The American Democracy

About half of the eight million people who obtained coverage in health –law marketplaces between October and mid-April arrived in the final six weeks of the extended enrollment period.

"Under the law, up to 26 million people are expected to gain coverage over the next few years through expanded state-run Medicaid programs and through the new, online marketplaces that allow consumers to get subsidies to buy coverage. Many who were previously uninsured already received hospital care, but sometimes racked up bills that were never paid."
Christopher Weaver, “Health-Law Patients Lift Hospital Profits,” WSJ, Jul7 26-27, 2014

“Oregon’s largest employer is not Nike, which ranks only sixth. The three largest employers, and 13 of the top 25, are health-care providers. But, then, in the archetypal Rust Belt manufacturing city of Cleveland, the largest employer is the Cleveland Clinic and the second-largest is another health-care provider. Houston is America’s energy capital, but four of its five largest employers are in the health-care field. Pittsburgh’s largest employer is the University of Pittsburgh, partly because of its medical center.
Given the enormous and growing role of medicine in this aging nation’s economy, it is unfortunate that only three senators are physicians: Wyoming Republican John Barrasso, an orthopedic surgeon, Oklahoma Republican Tom Coburn, an obstetrician, and Kentucky Republican Rand Paul, an ophthalmologist. Coburn is retiring, but another doctor may be coming, straight from the operating room to her first elected office.”

George Will, “Oregon’s Monica Wehby May Make House Call on Senate, Washington Post, July 25, 2014

Comment: In world of health care politics, hospitals, as the largest employers in many cities, are often underappreciated and overlooked as power players in shaping ObamaCare policies.

ObamaCare Issue: Private Choice Versus Government Coercion

Debate on public issues should be uninhibited, robust, and wide open.

William Joseph Brennan, Jr (1906- 1997), Supreme Court Justice, New York Times v. Sullivan (1964)

Issues raised by ObamaCare boil down to private choice versus public coercion. There are unsettling issues on both side of the political divide that do not lend themselves to easy solutions.

Some issues come down to volume-based care (i.e. paying for care without question while trusting doctors and hospitals ) and to value-based care (paying for results and outcomes based on data).

It’s not that simple. Psychological , philosophical, and ideological issues, e.g. trust in government versus trust in markets, government control and coercion versus individual freedoms and free enterprise loom.

An example of coercion is ObamaCare with its individual and employer mandates with penalties if one does obey these mandates. Exemplifying choice is free market medicine allowing physicians and hospitals to charge fee-for-service with market competition allowing consumers to choose providers.

Phil Gramm, former House of Representative member (R-Texas). believes choice and freedom will be winning issues for Republicans in the upcoming midterms.

“There is one unifying principle that Republicans can and should rally around now; the right of American families to choose their own health-care coverage…Americans should have the right to buy insurance that meets their own needs…in the end they debate is not about money or efficiency, it is about freedom.( “ 2014 Health-Care Strategy: Freedom, WSJ, July 25, 2014).

Aligned against the freedom concept are ObamaCare supporters who insist the central issue is affordability for the uninsured, the poor, and the sick. This strategy requires subsidies , redistribution of resources , and coercion in the form of mandates, penalties, and higher taxes.

Both solutions require tradeoffs, compromises, and tectonic shifts in thinking (Rene Letourneau, “ Four Tectonic Shifts Shaking Up Health Care”, Health Leaders Media, July 24, 2014). According to Andrew Croshaw, president of Leavitt Partners Consultants, four of these tectonic shifts are:

1. Risk-based reimbursement - Accountable Care Organizations, bundled services, shared savings for Medicare patients. These approaches tend to be coercive. They require government oversight and losses of freedoms and choice for patients and physicians, particularly specialists.

2. Health insurance exchanges - Implementing these exchanges is coercive . Making them work demands federal-state cooperation, federal subsidies of $4200 per patient, an efficient computer system, narrowing of physician networks, and significant increases in premiums for the young and the healthy. Coercion is needed to generate enough revenue in penalties to support the system. Patients lose freedom of choice through narrowed networks.

3. High deductible plans with health savings accounts. These plans stress freedom of choice of action for consumers. Liberals and Obama advocates in general oppose HSAs with high deductible plans because they leave choice in the hands of consumers, who may exercise their own judgments rather than following federal guidelines.

4. Economic dispassion - Coercive. ObamaCare is based on premise market dispassion trumps emotions surrounding keeping your doctor and health plan. Tends be coercive. Under ObamaCare, patients will be directed to low cost hospitals an and doctors (sometimes called “race to bottom’) who will be paid on basis of adherence of guidelines and value (outcomes /dollar spent), rather than volume ( paying and trusting doctors to do the right thing). The notion is: use data to control and judge performance and improve quality: sacrifice choice and freedom of patients and doctors if necessary.

Friday, July 25, 2014

Conventional wisdom has it U.S. needs a comprehensive public-private national bureaucratic system to cure all health woes. Maybe so. But maybe we also need direct no-nonsense access to doctors and surgeons, as set forth in Direct Pay Independent Practice – Medicine and Surgery, Kindle book,, $9.97
Great Expectations and High U.S. Health Costs

Great Expectations

Title of Charles Dicken’s Novel

Great Expectations is regarded as Charles Dicken’s greatest novel. It concerns relationships of man and society in Victorian London , and what Victorians expected of that society.

This blog is about what Americans expect of their health system. We expect convenient high tech care from specialists with near perfect results. These results may include complete cure of disease, return to normal function, perpetuation of youth and beauty, avoidance of complications and of death, and relief of pain and discomfort.

When these great expectations are not met, Americans, more than citizens of other developed nations, sue their physicians ,their health institutions, and anybody or anything associated with their care.

America’s malpractice lawyers, under the rules of American jurisprudence, which do not require lawyers and clients to pay if a suit is lost, potentially reward plaintiffs with huge open-ended settlements. The number of law suits in the U.S. exceed numbers in other nations, for attorneys in America have much to gain and little to lose. The fact that U.S. trial lawyers have a powerful political lobby and are major contributors to political parties, tends to perpetuate the culture of great health care expectations.

This culture also contributes to a society in which “more” is expected. As Dicken’s Oliver Twist said, “Please, sir, I want some more.”

In the current issue of Atlantic, Victor Fuchs, the renowned health care analyst from Stanford and prime promoter of the idea of managed competition, says U.S. citizens and providers always want more: “We deliver three times as many mammograms, two-and-one-times as many MRIs, and a third more C-sections than the average OECD country (“Why Do Other Rich Nations Spend So Much Less on Health Care,” Atlantic, July 23, 2014).

Why does the United States spend so much more?

According to Fuchs, “ The biggest reason is that U.S. healthcare delivers a more expensive mix of services. For example, a much larger proportion of physician visits in the U.S. are to specialists who get higher fees and usually order more high-tech diagnostic and therapeutic procedures than primary care physicians.”

We have more technology of every kind, more aggressive treatments of the sick and dying, more treatment in intensive care units, more physician visits, more hospital days, more expensive drugs, more expensive administrative costs, but less government spending on health care - 50% compared to 75% on total costs than other nations.

Fuchs answer to all of this is a more powerful role for government and more managed competition in the private sector.

“With regard to healthcare, the United States is at a crossroads. Whether the Affordable Care Act will significantly control costs is uncertain; its main thrust is to reduce the number of uninsured. The alternatives seem to be a larger role for government or a larger role for managed competition in the private sector. Even if the latter route is pursued, government is the only logical choice if the country wants to have universal coverage. There are two necessary and sufficient conditions to cover everyone for health insurance: Subsidies for the poor and the sick and compulsory participation by everyone. Only government can create those conditions.”

Nowhere in his piece does Fuchs mention the great expectations of the America people or the role of American malpractice attorneys. Yet we as a people, our culture, expects more specialty care, more high tech, more drugs, more intensive care for the sick and dying, and more perfect results. If we do not get more, someone has to pay the consequences.

Our health system is a creature of our culture. We are pro-democracy and anti-government. We are anti-authority and desire a government that governs least. We look to local solutions, reject federal mandates, prefer equal opportunities over equal results, feel capable of making our own decisions, seek access to high tech solutions, rely on specialists rather than generalists, and are victims of our great expectations. With regard to high health costs, as Walt Kelly’s Pogo remarked, “We have met the enemy, and he is us.”

Thursday, July 24, 2014

10 Million Newly Insured Because Of Health Law, Study Says

Preface: From time to time, I reprint ,with their permission, material from Kaiser Health News. Their lead story is today is that the Affordable Care Act reduced the rate of uninsured by 5.2% from October 13, 2013, the date of launch to June 2014. The full text of the article is available in July 24,

The study, done by Harvard researchers and published by the New England Journal of Medicine, was based on Gallup polling and data from the Department of Health and Human Services. It also estimated that the uninsured rate declined by 5.2 percentage points in the second quarter of 2014.

In their conclusion to their NEJM piece, its six authors carefully hedge their bet on the future of ObamaCare and the significance of their data: “These observations are merely observational. We can only identify suggestive associations between the ACA, the declining insurance rate, and access to care.”

The Associated Press: Study: 10M Have Gained Coverage Through Health Law

A new study estimates that more than 10 million adults gained health insurance by midyear as the coverage expansion under President Barack Obama’s law took hold in much of the country. The study published Wednesday in the New England Journal of Medicine found that the share of Americans ages 18 to 64 without insurance dropped by a little more than 5 percentage points

Politico: New England Journal Of Medicine Report: 10 Million Newly Insured

The Obama administration is touting yet another study showing that the Affordable Care Act has expanded health insurance to millions of Americans — this one published in the New England Journal of Medicine and estimating that 10 million have gained coverage under the law. Using Gallup polling and HHS data, Harvard researchers estimate that the uninsured rate declined by 5.2 percentage points in the second quarter of this year, corresponding to 10.3 million adults gaining coverage — although that could range from 7.3 to 17.2 million depending on how the data are interpreted. At least one researcher also has an HHS affiliation (Winfield Cunningham, 7/23).

Modern Healthcare: 10.3 Million Gained Insurance Under Obamacare

About 10.3 million Americans have gained insurance coverage since the full implementation of Obamacare last year, according to an analysis published Wednesday in the New England Journal of Medicine. The uninsured rated dropped to 16.3% at the end of April from 21% before the initial open enrollment period for plans on the new insurance exchanges. The decreases were most pronounced among low-to-middle income households in states that expanded Medicaid eligibility to residents with incomes up to 138% of the federal poverty level .

The Hill: Study Finds 10.3M Gained Insurance Through Health Law

The study conducted by researchers from the Department of Health and Human Services and Harvard University found the the number of uninsured has fallen from 21 percent in September 2013 to 16.3 percent in April 2014. In particular, it found jumps in the insurance rates for Hispanics, blacks and young adults.

: Over 10 Million U.S. Adults Gain Coverage Under Obamacare

The study, which appeared in the New England Journal of Medicine, also found evidence that more Americans had a personal doctor and fewer difficulties paying for medical care within the first six months of gaining insurance (Morgan, 7/23).
Ouch! Government Accounting Office (GAO) Sting Reveals Applications for Subsidies Can Be Faked

Nothing stings more sharply than the loss of money.

Livy (58 BC to 17 AD), History XXX

Something is rotten in the state of Denmark.

Shakespeare (1564-1616), Hamlet

Government subsidies are what make ObamaCare work. Subsidies are what make the individual and employer mandates possible. Without subsidies, ObamaCare collapses into an unworkable, unsustainble heap.

Subsidies take the sting out of ObamaCare premiums. Without subsidies, premiums become unaffordable, subsidized people exit from the market, and ObamaCare enters a death spiral.

According to Betsy McCaughey “A Ruling That Could Doom ObamaCare,” New York Post, July 22, 2014), without ObamaCare, subsidized people would have to pay four times the subsidized price. That would be too much financial pain to bear, and they would withdraw from the ObamaCare market.

McCaughey is referring to the possible effect of the Halbig-Burwell ruling on July 22. The ruling barred the federal government from handing out subsidies in 35 states with federal health exchanges.

In those states, five million people enrolled in health exchange plans. Eighty five % qualified for subsidies because of individual incomes below $46, ooo or family incomes of $194,000 or less.

If the Halbig- Burwell ruling were to stick (it probably won’t, and it may be up for the Supreme Court to decide), a mass exodus from ObamaCare plans would occur, an insurer death spiral would ensue, and ObamaCare would die.

This theoretical sequence of events is unlikely but was predictable. The accuracy of the verification system has always been suspect, along with prospects for massive fraud. The “back-end” of, it has been repeatedly pointed out, could not sort out those eligible to qualify for government subsidies. Now we learn you can fake eligibility.

To ObamaCare backers, prospects for compassionate “free” government handouts to help the poor and uninsured was irresistible. Obama’s IRS ruled that intent to subsidize the politically disenfranchised overrode the specific wording of the Accountable Care Act, which plainly said only the states could hand out subsidies. ObamaCare supporters had three years to find textual evidence in the law supporting their theory of congressional intent, but they could not or did not.

On July 22, the D.C. court of appeals stepping in with the Halbig-Burwell ruling. Two hours later, the less prestigious court of appeals in Richmond ruled otherwise, saying subsidies were legal because of congressional intent.

Then, in a bewildering turn of events, to compound the confusion, the GAO (Government Accounting Office) simultaneously announced results of s sting operation. The GAO said it had faked online and telephone applications for 12 people, and 11 of the 12 qualified for subsidies. The GAO did this by creating false identities by inventing Social Security numbers, income, and citizenship information and counterfeiting documents.

And so it went. To critics, the GAO sting confirms their worst suspicions – that there is something rotten about and ObamaCare itself. It opens the government and taxpayers to massive hacker fraud. This may not prove to be the case, the possibility exists.

In the words of Muhammed Ali (aka Cassius Clay), born 1942, ObamaCare and “Float like a butterfly, sting like a bee.”

Wednesday, July 23, 2014

Obama and His Health Law

Show me the man, and I’ll show you the law.

David Ferguson: Scottish Proverbs (1641)

Obama seems to think he is above the law.

Even as lower appeal courts fight to a draw.

He feels he can make or break any statute,

The President, you see, is a national statue.

His intentions, not the law, are what counts.

That is to what his attitude amounts.

The health law does not reflect his intent.

Its language does not say what he meant.

Critics say law is clear and unambiguous,

But with its words he is noncontiguous.

Mere words of the health law are meaningless,

To those uninsured in such distress.

Next legal step is full court of appeals.

His knowledge reveals how its majority feels.

He appointed four of its eleven judges.

Against him they harbor no real grudges.

Seven of the eleven voted Democratic.

Their decision will be for him automatic.

So says he, let the Supreme Court decide.

It cannot and will not my law override.

Tuesday, July 22, 2014

Kindle book Direct Pay Independent Practice: Medicine and Surgery, is now available on amazon Book makes point that ObamaCare, which raises premiums and deductibles to unaffordable levels for many, is a potent incentive sales program for direct pay concierge and direct pay ambulatory care practices as alternative to ObamaCare.
Appeals Courts Conflict on Health Law Subsidies

It is emphatically the province and duty of the judicial department to say what the law is.. If two laws conflict with one another, the court must decide.

John Marshall (1755- 1835), First Supreme Court Chief Justice

It is starting to look like the Supreme Court will again have to decide if ObamaCare meets the letter of laws governing the President and his executive actions.

Today, Tuesday, July 22, 2014, two appeals courts issued two conflicting rulings of ObamaCare within hours of each other.

• The D.C. circuit court rules 2:1 that subsidies could only be available in state exchanges, not in the 36 federal exchanges, thereby ruling invalid subsidies given in the recent health exchange launch, which ended on April 1 and in subsequent two weeks.

• The U.S. Appeals Court for the Fourth Circuit in Richmond , unananimousliy struck down this challenge to ObamaCare subsidies, which effectively the entire intent of the ACA.

These conflicting decisions come in the wake of the Hobby Lobby decision to invalidate part of the Contraceptive Mandate, a setback for ObamaCare.

If subsidies are blocked, an estimated 7.3 million people – about 62% of those expected to enroll in federal exchanges by 2016 – will lose out on $36.1 billion in subsidies. As matters now stand, people qualify for subsidies with incomes under $45,960 for individuals and $94, 210 for families of four.

On the other hand, if subsidies continue, health care premiums may rise to unacceptable levels for many of the middle class.

A negative rulings by either the full court of appeals, expected soon, or the Supreme Court latter, should it accept the case, would effectively kill the Employer and Individual mandates and ObamaCare itself.

If the subsidies case goes before the Supreme Court, ObamaCare success is not a given court rulings so far on Hobby Lobby and the 13 to 0 record of recent negative Court rulings against Obama.


1. Paige Winfield Cunningham, “Wild Day for ObamaCare: Appeals Court Rulings Conflict, Politico, July 22. 2014.

2. Robert Pear, “Courts Issue Conflicting Rulings on Health Care Law,” New York Times, July 22, 2014.

Looking at Health Reform Anew

Our obligation is about generating new ways to reconceptulize the world and new ways to participate in it, new ways to imagine, to shape, and make it.

Mariko Silver, “Show the World Anew,” President of Bennington College, 2014 inaugural address to alumni, students, faculty, and friends of Bennington College

I am not an alumnus of Bennington College. But one son, Carter, went there. The other son, Spencer, presented his poems there.
And it was at Bennington that my society mentor, Peter Drucker (1909-2005), taught and learned what he needed to know to develop the theories that inspired and informed modern management.

There Drucker learned about makes America tick – its history, government, philosophy, and religion. Drucker believed in limited government but also in business management that created and led institutions with larger social purposes.

I am writing this because I am engaged in writing an ObamaCare triology spanning the period from ACA passage, March 23, 2010 to November 4, 2014. I believe the midterms will determine the fate and shape of health reform.

What am I learning from this writing engagement, this process, of writing about ObamaCare?

Much of what I am learning was expressed eloquently in Mariko Silver’s inaugural address as President of Bennington College.

One, “Life has never been lockstep or linear.” Neither has the process of implementing ObamaCare. ObamaCare is a new way of reconceptualizing health reform, a sometimes bizarre combination of government and the private sector, as a means of reshaping and remaking health care delivery.

Two, “Humans are ever seeking to capture the complexity of the world and to bind it into little boxes.” I have tried to capture the essence of ObamaCare by binding them into 600 little boxes called blogs and then to rebox them into bigger boxes called categories and then into even bigger boxes called books.

Three, “But if we want change, if we want progress, if we want fundamental shifts and improvements in the human experience – and the state of the planet as well – then we need to require our institutions to advance and even to break course and take on new, as yet never realized or even yet imagined, directions – new boxes, or maybe no boxes.” ObamaCare does not fall neatly into little boxes, like blogs, or even into big boxes – like liberalism or conservatism, or single-payer, government- driven care. or competition, and market-driven care.

Instead ObamaCare advocates and distractors and the alternatively-minded opponents should seek “liberate and nurture the individuality, the creative intelligence, and the ethical and aesthetic sensibility” of students and perpetrators of health reform for “constructive social purposes” , rather than for raw political power.

The quest for the right health reform is an ongoing, perpetual , creative – and chaotic – process. It has no definite endpoint. There will always be room and gloom for improvement.

But we as a resilient nation can do it because of our endowment of individual, natural, and freedom-loving resources. We can do it by defying conventional wisdom that there is just one right way of doing things. Let us do it the American way by embracing complexity and diversity and by thinking of our creative restlessness as an asset, rather as an exercise in political partisanship.

Monday, July 21, 2014

Less Doctor Pay, More Health Costs

Less is more.


Of all the ways to limit health care costs, perhaps none is as popular as cutting payments to doctors. In recent years payment cuts have resulted in a sharp downturn in revenue for many hospitals and private practices. What this has meant for most physicians is that in order to maintain their income, they’ve had to see more patients. When you reduce the volume of air per breath, the only way to maintain ventilation is to breathe faster.

Sandeep Jauhar, MD, “Busy Doctors, Wasteful Spending,” New York Times, July 20, 2014

If something sounds too good to be true, it often is. Such is the case with cutting doctors’ pay. American doctors are among the highest paid in the world. Why not just cut their pay, put them on salary, bundle their services, just pay them for what works? Wasteful spending costs the U.S. $750 billion a year. What doctors order accounts for or affects 80% of health costs.

But alas, less may not be more. As Doctor Jauhar, an internist, points out, when you receive less pay, you have to see more patients to make up for the loss. And when you see more patients faster, you make mistakes and you miss things.

To keep those mistakes and misses from hurting you and the patient, you worry more about malpractice.

When you worry more about malpractices, you make more referrals to specialists, who order more tests. And who will certain do something. That is what they are trained to do - do something.

You may order more tests yourself, just to make sure you haven’t missed something.

You may order an MRI or CT scan , which have been embedded in the public’s mind as a standard of care and the magic answer for finding out or ruling out the causes of back pain or joint pain or headaches or belly or chest pain, or whatever else ails you.

You may write a prescription. The patient came to you for help. They want something done for them. And writing a prescription is something. It is better than simple talk and counseling, which takes more time. And more time is something you do not have.

To create more time for yourself and your family and to assure yourself of a more secure financial future, you may go to work for the local hospital. Unfortunately, because of a law allowing “facility fees, “ more and larger fees are charged if the patient is seen in a hospital-owned facility Fees charged are often 50% to 60% higher than fees charged in a physicians office.

And so the physician payment and health cost cycle goes. Where it stops no one knows.

Perhaps we could slow it down by reducing the pay differential between hospital-owned and independent doctors, by cutting regulatory paperwork, which takes 25% of doctors’ time, by punishing doctors for ordering those procedures patients and lawyers expect, by spending more time counseling patients to walk more, eat smarter, drink less, and take better care of themselves, but that would take more time, of which you have less and less.

Sunday, July 20, 2014

Existential Threats to ObamaCare

Existential – Pertaining to existence or existentialism, as in a threat to the existence of something.

In my reading, I keep coming across the word “existential” when applied to politics. Most commonly, use of the word implies some problem or movement threatens the existence of something.

To wit, the Tea Party is existential to conservatives and the Republican Party, or the botched or a failed ObamaCare law, is existential to liberals and Democratic party.

I turned to the dictionary for the definition of existentialism and came up with this:” A belief or movement that man has an absolute freedom of choice but there are no rational criteria saying on what basis of choice and the universe is absurd producing anxiety and alienation”.

That definition pretty much sizes up the current prospects for ObamaCare.

So what are threats to the existence of ObamaCare?

In my mind, the existential threats are:

• Persistent public disapproval in the 58% to 37% range in the latest poll , with an average disapproval margin in 14.5% in multiple polls. How can this continue? It likely will continue because ObamaCare has been helpful in bringing down the number of uninsured Americans from 18% to 13.5%, but if the GOP wins the Senate, the existence of ObamaCare in its present form will be hobbled, maybe even threatened with extinction and repeal.

• Legal threats - One, The Boehner and the House threat to sue President Obama for those multiple executive actions resulting unilateral changes and delays in ObamaCare without seeking Congressional approval as required by the Constitution. Two, the wording in the ObamaCare law which states that only the states, not the federal government, can offer subsidies for health exchange plans. There are undoubtedly ways around these legal problems given that Democrats run the Justice Department. These may be issues the Supreme Court decides.

• Public and election revolts, locally, regionally, and nationally , against premiums and deductible spikes to unaffordable levels, cancellations of millions of existing plans due to onerous coverage requirements , narrowing of health plan networks resulting in losses of trusted doctors and hospitals, coercion of individuals and employers to buy health plans or cough up penalties, a continued unacceptably slow economic recovery attributed to ObamaCare, and, of course, threatened or actual fiscal insolvency of Medicare, Medicaid, and state and federal governments.

These various dreadful scenarios are unlikely to threaten the existence of ObamaCare or the major political parties, but sometimes fear of going out existence or becoming irrelevant hastens change. However, with the presence of multiple vested moneyed interests, policy adjustments signaled by polling, and the resiliency of the two major political parties, existential obsolescence is not in the cards.

Saturday, July 19, 2014

An Interview with CMS as a Person

Where does an 800 pound Gorilla sit? Where it wants to sit.

Common Expression

Q: Many people think of you as a huge faceless bureaucracy – a government godzilla.

Do you mind if I address you as a person?

A: Not at all. It’s about time someone recognized me as a living, breathing person, rather than as an impersonal entity or as some kind of dominating force of government.

Q: I hope you don’t mind if I remind you many doctors think of you as an 800 pound health care gorilla, controlling and dictating everything they can and cannot do and what they are paid, even though you are far removed from the point of care.

A: I would prefer to be known as a paternalistic, compassionate sugar-daddy – bent on improving the health system with well-spent federal dollars and protecting people against free market predators and poachers, some of whom are physicians.

Q: So you regard yourself as a kind king and guardian of the health care jungle.

So you have tHis perception of yourself, as someone with a public protector with a passion for compassion?

A: Well, yes. After all, I cover 100 million Americans in three programs – Medicaid, Medicaid, and Children Health Insurance Program (CHIP), presumably the vulnerable, under-served, and uninsured among us.

The need for my services will only grow. Fifty million more Americans will qualify for these programs in the next five years.

And my policies essentially govern the health care coverage of 215 million other Americans, thereby protecting the other thow-thirds of the population.

Q: But there is a downside to your view of yourself. Follow your rules, or else, you seem to say. Otherwise, you will not be paid to deliver care or receive care. Obey the king of the health care jungle – the biggest health care payer and giver on the planet. The health care world must heed your instructions - or not be part of that world. That's pretty arbitrary. Is it not?

A: I carry a heavy burdent. Since 2010, I have been responsible for implementing ObamaCare, the biggest national health care program since Medicare, far bigger than Medicare/Medicaid/CHIP, since it covers everyone. The Office of the Budget estimates ObamaCare will cost over $2 trillion over the next 10 years.

Q: Who can argue with that projection? Since its 2010 passage, ObamaCare has already resulted in $1800 increases in premiums for families, rather than its promised $2500 decrease by 2016.

My question is: How big is Medicare/Medicaid/CHIP/ObamaCare going to get, and what will it cost the taxpayer?

A: I know not, but I am certainly big, and I’m getting bigger every day in every way. That is the curse of being a bureaucratic care giver. You have to spend big to get big results. I have a budget this year of $1 trillion, and, if history is any guide, that will grow, along with the current $17.6 trillion federal deficit, with debts of $900 billion for Medicare/Medicaid, $55,000 for each citizen, and $151,000 per taxpayer.

In 1965, when I was introduced to the health care world, it was projected I would only cost the U.S. $9 billion by 1990. That projection came before my little sister, Medicaid, the children of CHIP, and the budgetary beasts of burden of ObamaCare arrived.

Look how big I have become. By 2020, my collective costs may exceed $1.5 trillion. As Doctor Seuss would say, I'm figuring on biggering and biggering and biggering.

Q: Why do you cost so much?

A: That’s not an easy question to answer. But among other things, over the last 50 years, the life expectancy of women has increased seven years and 10 years for men. I regard myself as primarily responsible for the increased longevity and better health of Americans.

There’s all those new technologies, allowing organ transplants, long-term dialysis, and CT, MRI, and PET imaging, not to mention all those life-saving drugs. The list goes on and on. I take credit for financing them.

Then there’s the simple incentive that government promises of a “free lunch”, especially when you’re spending other people’s money, demand skyrockets. My job is to meet the demand.

Q: Some people claim U.S. has no health system. People don’t seem to acknowledge the hard reality – you are the system, and it's basically single payer in tht you set the fees.

A: How so?

Q: Look, I ask the questions here. Anyway, what I mean is this. You set the standards of how many doctors there will be, how much money for physician training you will provide, what doctors will be paid and for what , what their payment codes will be, who can and cannot practice, what much data doctors must collect, how they they must prescribe online, what electronic systems they must install in their offices, how they will transmit that data to you, what patients will be covered and who will receive subsidies, what federally improved plans they can enroll in, what doctors they can go to, who can run a hospital or any other health facility and who will own it, and what they can charge. Other health plans follow your lead.

A: When you pay the money, you set the fees , you dictate the choices, and you make the rules. You have to account for each dollar spent. You have to watch out for fraud, which is why I initiated a $210 million fraud protection programs. You have to control what doctors order because what they order accounts for 80% of health costs.

Q: What would happen if the costs of your policies cause health premiums and deductibles become unaffordable, bureaucratically unfathomable, and unacceptable to Americans.

A: That will never happen.

Q: Any closing comments?

A: Go to and to appreciate the breath and magnitude of what I do and what I promise to do for the American people.
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Friday, July 18, 2014

Quotes to Note: What We’ve Got Now with ObamaCare

“So what you’ve got is an insurance industry that did not do a good job in gearing up for a population that has never had health insurance before, an Obama administration that did a horrible job on the back end, resulting in a flood of calls to insurer call centers, and a population that is low-income and is not health-insurance literate. Put those things in a bag and you’ve got a problem.”

Robert Laszewski, a health industry consultant who has been critical of the Affordable Care Act.

"This fall, voters will get another chance to register their opinion on Obamacare. President Obama’s signature legislation is causing health costs to spike, federal spending to soar, doctors to leave their profession, millions of Americans to lose their health plans, and millions more to be coerced into buying overpriced insurance against their will. For those who care about quality and affordability in health care, fiscal solvency, the separation of powers, liberty, or economic prosperity—which is to say pretty much everyone—Obamacare is a disaster, and it must be repealed and replaced with a well-conceived conservative alternative."

Jeffrey Anderson and William Kristol, "A No Brainer," Weekly Standard, July 2014

Thursday, July 17, 2014

Bald-Faced Prediction: Self-Funded Businesses Will Directly Contract for Care

Bald-faced lie.

An obvious untruth

I shall make a bald-faced prediction, an obvious truth, as contrasted to a bald-faced lie, an obvious untruth:

Direct self-funded health care , whereby employers provides health benefits to workers with its own funds will be the wave of the future.

Self-funded plans differs from fully-funded plans where the employer contracts with an insurance company to cover employees and dependents. These direct contracts will be with both independent direct pay primary care physicians and specialists and with ambulatory surgery centers, and in some cases, with hospitals specializing in special procedures requiring hospitalization and overnight or lengthy treatment.

The reasons for this switch in corporate strategies to direct-pay are self-evident.

1. It offers cash flow advantages. You know where your money goes and when to pay it .

2. You achieve significant cost savings, sometimes 30% to 50% savings.

3. You, rather than the insurance company, control the plan.

4. You can achieve flexibility by negotiating directly with the provider, rather than through the insurer.
5. You avoid paperwork and cost-generating, often bureaucratic delays, by dealing directly with the provider.

6. The total cost of the procedure or bundle of care is transparent in advance.

7. You avoid significant comprehensive mandated benefits, often imposed by states and governments at all levels, which are often unrelated to the procedure itself.

8. You satisfy employers, patients, and providers through lower costs, immediate access, and predictable outcomes.

9. You can contract for bundled primary care/concierge/retainer care and ambulatory surgery care.

You can control your costs for common procedures and services which can now be performed at ambulatory surgical centers and doctors’ offices at bundled prices agreed upon bundled prices in advance.

These procedures and services include operations and services increasingly performed because of an aging workforce, and which include.
1. Hip, knee, shoulder, and other joint replacements and procedures.

2. Cataract and other opthalmology procedures.

3. ENT procedures, cosmetic and otherwise

4. Endoscopic procedures such as laporoscopic gallbladder or other organ removals or procedures.

5. Bone marrow or other procedures requiring needle insertions or aspirations.

6. Cardiac procedures, some ambulatory, some requiring hospitalization.

7. Orthopedic microinvasive techniques for spinalstenosis and disc problems.

8. Imaging procedures – CT scans, MRIs, and PET scans.

9. Cosmetic procedures - face lifts, nose procedures liposcopic fat removal , breast and buttock augmentation, and skin cancer biopsies and excisions.

Medicare-approves 0f 2162 ambulatory surgery center procedures. With the shift towards outpatient-care and the drive for cost reductions, the number of indepedent ambulatory care centers and procedures will almost certain to increase. Many of the direct pay ambulatory care centers, by definition of the word “direct”, are not associated with Medicare, and more directed towards contracting with self-funded corporations. The number of procedures independent ambulatory surgery centers perform will not approach the number approved by Medicare, but the number pf procedure done are destined to mount.

Future of Medical Practice

O blindness to the future!

Alexander Pope (1688-1744), Essay on Man

Physicians are blind to what the future holds, for the future depends on factors beyond their control.

These factors include:

• one, the outcome of the November 4, 2014 midterm elections;

• two, the results of next open enrollment period from November 15, 2014 to February 15, 2015;

• three, variations in state politics and policies in response to Medicaid and ObamaCare;

• four, the confusion of the public and its health care illiteracy on ObamaCare (they dislike it but do not want it repealed) how much the ObamaCare numbers from the initial October 1, 2013 to April 31, 2014 rollout will raise federal costs and health care premiums;

• five, the impact of external political events such as the immigration crisis, U.S. economic health, Middle East turmoil, and the unstable Ukrainian situation.

Physicians cannot know these things because they rest on the outcome of political battles now being waged for control of the U.S. Senate, battles over which physicians have little control. If the GOP wins the Senate, ObamaCare is in deeper trouble than it already is; if the GOP fails, political ObamaCare paralysis will continue. If premiums rise dramatically between now and November 4, 2014, it will bode badly for Democrats.

Difficulties in predicting how all of these uncertainties will, in turn, rest on these imponderables which the Physicians Foundation has identified as critical issues to watch.

• One, the trend towards “consolidation” and “monopolization.” Health plans and health systems are consolidating into ever larger entities designed to control premiums and costs. Hospitals are hiring doctors in record numbers; regional monopolies are growing; smaller practices are shrinking in numbers; costs and premiums are rising, doctors at the margins are resisting by joining the direct pay/concierge movement.

• Two, growing regulatory burdens. A 2013 Physician Foundation survey indicated doctors already spent 22% of their time on paperwork. This percentage of time away from patients will grown when the October 2014 for ICD-10 coding kicks in and increases the number of codes from 7,600 to 69,000.

• Three, public , physician, and employer confusion over the health insurance exchange outcome numbers and what the numbers mean. Specifically, physicians wonder how much their reimbursements will decline, whether they will be overwhelmed by new patients, or whether their patients will simply disappear into thin air because of those narrowed health plam networks.

• Four, overcoming electronic health record (EHR) shortfalls. To say that promises to EHRs to cut costs and increase efficiencies have been a disappointment is a colossal understatement. EHRs costs money to install and maintain, cut productivity by as much as 30%, do not contribute to the clinical narrative and understanding of the patient, and, to top it all off, do not communicate with each other or with hospital systems.

• Five, health system stalemates: no permanent solution to the Sustainable Growth Rate (SGR) problem, which hangs over physicians’ heads each year like the Sword of Damocles , threatening to cut their reimbursements by 25% or more; lack of any federal action on tort reform; and disruption of Medicare and Medicaid reimbursement because of disputes over physician fraud and criticism over physicians are the primary cause of the rise of health costs.

Wednesday, July 16, 2014

Two Great Mistakes

In war there is no room for two mistakes.

Lamachus, Athenian general, in Plutarch’s Moralia

That’s the problem with this White House. Barack Obama is the hero of their narrative, but he is not supposed to be. The hero of every political narrative is the voters.

Ron Fornier, “It’s Not All About You," The National Journal, July 15, 2014

In his war against his political opponents, President Obama has made two great mistakes.

One, he and his party sneakily passed ObamaCare, a massive piece of social legislation, involving all the people, against unanimous opposition of a party representing roughly half the people. Forever more, this brazen, foolhardy political maneuver hardened political enmity and resistance. It showed with Obama there is no middle ground, no room for negotiation. It is his way or the highway. Unfortunately for Obama, the highway is not straight and narrow. It changes direction every two to four years, and he may find himself on the shoulder or even off the road.

Two, the Presidency is not about Obama. It is not about him. It is not about his ideology. It is not about humiliating or stiff-arming Republicans. It is not about blaming others. It is not about showing you are a regular guy, appearing on talk shows, shooting pool or drinking beer with the boys, playing golf at every opportunity, hobnobbing with celebrities, constantly raising money for the Party, attending all those Hollywood and New York City parties. It is not about whether you are black or white or Hispanic. It is not about wars against women or minorities. It is not about your image. It is about America's image in the world. It is about paying attention to the business of the Presidency, and to the state of America's businesses, upon which our prosperity depends. It is about the welfare of struggling Americans – the old, the young, the well, the sick, the employers, fulltime and part-time workers, and the unemployed. It is about the American people – their present, their future, their hopes, their dreams.

Mr. President. It is not about you. It is about us. It is about We The People. It is not about you and the government. It is about We, the governed.

Tuesday, July 15, 2014

My new book "Direct Pay Independent Practice: Medicine and Surgery," is now available for sale as Kindle book on
ACA Progress Report – A Good News, Bad News Story

In the July 17 New England Journal of Medicine, David Blumenthal MD, and Sara Collins, PhD, sum up the progress of the ACA through March 31, 2014. It was the last chance to enroll through the individual marketplaces until the next open enrollment period in November, which will occur shortly after the midterm elections. (" Health Care Coverage under the Affordable Care Act," NEJM, July 17, 2014).

The summary of the 3657 word report contains the following
three conclusions.

One, Taking all existing coverage expansions together, an estimated 20 million Americans gained coverage: 1 million young adults (19 to 26 years of age under their parent’s policy), 8.0 million consumers who selected a marketplace plan, 5.0 million consumers who purchased directly from insurer, 6.0 million consumers who enrolled in Medicaid or Children’s Health Insurance Program (CHIP)

Second, experience with the ACA varies enormously among states. Those deciding not to expand Medicaid benefited less from the law, and since many of these states have high rates of uninsured residents and lower health status. The ACA may have the paradoxical effect of increasing disparities across regions, even as it reduces disparities between previously insured and uninsured Americans as a whole.

Third, the sustainability of the coverage expansions depends to a great extent on the ability to control the overall costs of care in the United States. Otherwise, premiums will become increasingly unaffordable for consumers, employers, and the federal government. Insurers who seek to control those costs through increasingly narrow provider networks across all U.S. insurance markets may ultimately leave Americans less satisfied with their health care. Developing and spreading innovative approaches to health care delivery that provide greater quality at lower cost is the next great challenge facing the nation.

This is clearly a good news (20 million more insured ), bad news story (premiums may become unaffordable for consumers, employers, and government, networks of doctors are narrowing, and some Medicaid recipients are being left out in the cold).

Read the report in full. You can get it on Google. It has thoughtful sections on major coverage expansion, individual marketplaces, enrollment outside ACA marketplaces, cancelled policies, risk pools and 2015 premiums, narrow networks, Medicaid and Children’s Health Insurance Programs, reforms of small businesses, and record to date.
Advice for the Ideologically Impaired

When you’re failing, there is a very powerful incentive to put ideology aside and just do what works.

Fareed Zakaria (born 1964), Host of CNN foreign affairs show, Washington Post columnist, New York Times best-selling author

At the moment, five and one half years into his presidency, poll averages indicate President Obama is underwater on all fronts – foreign affairs (-9%), personal job approval (-12%), direction of the country (-63.5%), approval of health law (-14.5%).

Only 54% say he competent to lead the country, and 41% say things are worse than one year ago. And he and his party are trailing in races for the Senate, House, and governorships in polls leading up to the midterms.

and Ought's

Maybe, President Obama is ideologically impaired.

Maybe, his policies of more taxes, more spending, more debt, and more government programs are not working.

, he ought to change his ideological course to save his presidency, his party, and his country.

Maybe, he ought to emphasize personal liberties rather than government controls.

Maybe, he ought to cut the U.S. corporate income tax from 35% the highest in the world, to 15% of less, in order to bring corporate headquarters and jobs back to America.

Maybe, he ought to consider repealing the employer and individual mandates, which people dislike, and which have left millions of part-time jobs in their wake.

Maybe, he ought to let people shop across state lines for lower health care premiums.

Maybe, he ought to call for tort reform to make doctors happy and make them more likely to enter the profession.

Maybe, he ought to end the tax on profits of innovative health care companies.

he ought to help make America energy-independent by ceasing to delay the Canadian pipeline and encouraging fracking.

Maybe, he ought to promote the expansion of health savings accounts, which make workers more responsible for choosing their own health care options at the costs they can afford.

Maybe, he ought to reduce the number of those 25,000 new health care regulations, which are causing business to dump retirees onto health exchanges and doctors to abandon the profession and stop seeing Medicare, Medicaid, and health exchange plan patients.

Maybe, he ought to offer tax credits for individuals and small groups.

For ideologues, maybe and ought are powerful word. In their minds, they portend of change and not the way things ought to be. When things are not what they ought to be, their ideologies are in trouble.

As Machiavelli said, “There is such a difference between the way men live and the way they ought to live, that anybody who abandons what is for what ought to be will learn something that will ruin rather than preserve him.”

If Obama abandons what he thinks things ought to be, he believes that abandonment might ruin his legacy, He is therefore not likely to abandon big government programs and his deeply held principles. He is too ideologically committed. Abandonment is simply too much of an ideological stretch. That is the way it is. But maybe that is not the way it ought to be.

Monday, July 14, 2014

ObamaCare’s Perverse Incentives

The road to hell is paved with perverse incentives.


In my book The Health Reform Maze (2010, Greenbranch Publishing), I led off with a Samuel Johnson quote, “The road to hell is paved with good intentions.” And so it is with ObamaCare.

The good intentions were: care for everyone at lower or subsidized premiums while keeping your doctor and your health plan.

Unfortunately, good intentions are not working out – premiums are higher, networks of doctors are shrinking, people are either losing their health plans or being switched to ones they often cannot afford, and jobs are being converted from full-time to part-time jobs on a massive scale. In the last federal jobs report, 523,000 lost full-time jobs while 799,000 gained part-time jobs.

What’s the problem? There are fundamentally two problems.

• People are people. The respond to incentives, positive as well as negative.

• “Work is the curse of the thinking class,” if I may paraphrase Oscar Wilde, who said, “Work is the curse of the drinking class.”

Think for a moment. What are the perverse, i.e, negative , ObamaCare incentives?

The incentives are, in no particular order,

• More dependency on government. This year, for the first time, more than 50% of Americans received a government benefit, including 50 million on food stamps, 12 million on disability, 48 million on Medicaid, and 50 million on Medicare.

• More part-time than full-jobs. This is understandable when you consider employers can save $3000 per employee by avoiding paying for ObamaCare’s one-size-fits-all coverage, whether you need that comprehensive coverage or not.

• Fewer doctors and hospitals to choose from. Health plans know some doctors and hospitals cost them less than others. The incentive , then, is to send patien s to lower cost providers. In some quarters, this is known as the “race to the bottom.”

• Higher premiums and higher deductibles for the young and healthy. Under Obama, the intent of reform is to “level the playing field,” meaning the young and healthy are assigned the task of supporting the older and less healthy, whether the younger and healthier can afford it or not.

• Higher costs to the States to cover Medicaid recipients. The main outcome of health exchanges has been to increase Medicaid recipients by 3 million. Half of states have elected not to expand Medicaid. Although the federal government now pays 58% of Medicaid costs and promises to pay 100% over 3 years for new Medicaid beneficiaries under the exchanges, the states are skeptical because they will still have to pay much of the administrative costs of new Medicaid folks. Costs of Medicaid has increased to 20% of state budgets, meaning more Medicaid recipients means less money for education, roads, and other social programs.

• Less incentives for young doctors to enter the profession and primary care or for older doctors to remain in practice to enter medicine as ObamaCare systematically ratchets down reimbursements and systematically increases regulations requiring more paperwork and more time away from patients. The incentives are to become specialists with les paperwork and more pay.

• Less incentives for people to work. Why work in low-paying part-time jobs when you can make more by simply not working and collecting government benefits.

So here we are, according to Mortimer Zuckerman, chairman and editor-in chief of U.S. News and World Report, "Five years after the Great Recession, more than 24 million working-age Americans remain jobless, working part-time involuntarily or having left the workforce. We are not in the middle of a recovery. We are in the middle of a muddle-through, and there's not point in pretending the sky is blue when so many millions can attest to dark clouds."

Add to the list of perverse incentives these realities.

• Less than ¼ of part-time jobs have health benefits.

• Part-time workers are less likely to be protected by labor and employment laws.

• Less than ¼ of part-time workers are paid sick leave.

• Huge numbers of recent college graduates work full-time.

• Part-time workers are more likely to be depressed.

• Millions of part-time workers work full-time jobs.

• Boost in part-time jobs widens payment gap between and high and low wage workers.

• The replacement of full-time work by part-time work and the loss of health benefits and increased in premiums is alienating the millenials (aged 18 to 29) who staunchly supported Obama in the last two elections.

Questions: Whatever happened to “hope and change” and other rosy ObamaCare promises? The young are the hope of the future, and they are losing hope. Is ObamaCare fair for the middle class as well as the lower class? Equal outcomes for all do not equate to equal opportunities for all.


1. Mortimer Zuckerman, “ The Full-Time Scandal of Part-Time America,: Fewer Than Half of U.S. Adults Are Working Full-Time. Why? Slow Growth and Perverse Incentives, “ Wall Street Journal, July 13. 2014

2. John Goodman Blog, “The ObamaCare Carnival of Perverse Incentives, “ January 23, 2014.

Sunday, July 13, 2014

A Flock of IRS Smidgens and Pigeons

“There is not a smidgen of corruption at the IRS.”

President Barack Obama

At what point does a flock of smidgens become irrefutable evidence that deserves an independent investigation.

Ed Rogers, “Insiders: More Smidgens Show Up,” Washington Post, July 11, 2014

The latest report on a Lois Lerner email urging IRS colleagues to be cautious about targeting of conservatives has ignited a new series of speculations about the IRS scandal.

• “Caution” at the IRS, Boston Herald, July 12

• “Second Federal Judge Tells IRS to Explain Lost Lerner Emails” ABC News, Yahoo News, Fox News, July 11

• “More IRS Smidgens Show Up,” Washington Post, July 11

A smidgen is defined as a very small amount,

So small, says Obama, as to be of no account.

There is no corruption, no hint of scandal,

Nothing his administration can’t handle.

He hopes to snuff out the scandal candle.

He seeks to transmit the clear message,

That Lois Lerner is not a presage,

Not a harbinger of things to come,

Not an indicator of any IRS scum.

Her lost emails are an IT accident,

Simply an isolated online incident.

This may be true if it happened once,

But not when her emails vanish in a bunch.

Not when IRS and WH birds of a feather,

Invariably, always,tend to flock together.

Smidgen, regrettably, rhymes with pigeon.

Mention "smidgen," and speak scandal pidgin.

Critics often make a compelling case.

Although it is partisan and base,

That Lois Lerner is simply a clay pigeon,

Taking the fall as Obama’s stool pigeon.
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Saturday, July 12, 2014

ObamaCare and the Middle Class

That which in England we call the middle class in America is virtually the nation.

Inequality has the natural and unnecessary effect, under the present circumstances, of materializing our upper class, vulgarizing our middle class, and brutalizing the lower class.

Matthew Arnold (1822-1888), A Word About America and Mixed Essays

America is a middle-class, politically center-of-the-road nation.

Under President Obama, in the first 5 ½ years of his presidency, that political equation has changed – with the upper class rising, the middle class sinking, and lower class drifting downward with over 20% unemployment rates.

A recent Russell Sage Foundation study suggests these inequality patterns, have become worse in the post-Recession Obama years.
In 2013 , wealth of those at the 90th and 95th percentiles was higher than 10 years ago. Everyone else is lower (Fabian Pfeffer et, “Wealth Levels , Wealth Inequality , and Great Recession," June, 2014).

Most new jobs are low wage or part time. They aren’t providing the impetus the economy got in the last, more broad-based expansion from robust consumer spending. The middle class make up most consumers, and they have less money to spend, with their incomes dropping by 10%.

Wage growth has gone up weakly, 2.5% annually since 2009, compared with a 4.3% annual rise from 2001 to 2007. Consumer spending, which makes up 70% of the economy, has expanded only 2.2% since the recession ended, far less than the 3% advance in the prior expansion.

Many working-age people sit on the sidelines . Labor force participation rate remains the lowest since 1979.

People in marginal or part-time jobs do not drive consumer spending. The upper class is spending the money . Since 1992 the top 5% of households have increased their share of total spending to 40%, up from 27% in 1992. ( Joel Klotkin, “There Will Be No Real Recovery Without the Middle Class,” July 10, Forbes).

According to Klotkin, “Over the last five years, Wall Street and the investor class have been on a bull run, but the economy has been, at best, torpid for the vast majority of the population. Despite blather about our “democratic capitalism,” stock ownership is increasingly concentrated with the wealthy as the middle class retrenches. The big returns that hedge funds, real estate trusts or venture capitalist receive are simply outside the reach of the vast majority.”

Last year some two-thirds of Americans polled by the Washington Post and the Miller Center said life had become tougher over the last five years compared to just 7% who thought their lifes had improved. Pollsters also have found almost two-thirds of parents felt their children would do worse in life.

In previous recoveries, small businesses have provided much of the spark and job creation. Small business start-ups have declined as a portion of all business growth from 50% in the early 1980s to 35% in 2010, while its share of employment dropped down from 20% to 12%.

A 2014 Brookings report revealed small business “dynamism,” measured by the growth of new firms compared with the closing of older ones, has declined significantly over the past decade, with more firms closing than starting for the first time in a quarter century. (Brookings, “Declining Business Dynamism in the United States, May, 2014).

What does the middle and small business decline have to do with ObamaCare? Plenty. Middle class voters vote, and lower class voters, the guts of the Democratic base, vote in smaller numbers. Although ObamaCare has decreased the number of uninsured to 13.5%, compared to 15% before its inception, premiums and deductibles have exploded in many markets, especially in the individual and small group and markets dominated by young healthy voters.

The Middle Class is feeling isolated and bereft, left out of ObamaCare, and its voters, which include most Americans, may reflect these feelings in the November midterms. The middle class may rise up and smite down its distractors.
Requests for Direct Pay Independent Practice: Medicine and Surgery

I am receiving numerous requests asking when my E-book "Direct Pay Independent Practice : Medicine and Surgery," will be available. It will hit the mean e-book streets on July 15, 2014. It will sell for $9.97. If you have any interest in the subject, I encourage you to order the book at It is a Kindle book. Tell your friends and e-mail constituents about the book. This could be the start of something big.

Richard L. Reece, M.D.

Friday, July 11, 2014

Suffer the Children

Suffer the little children to come unto me, and forbid them not, for such is the kingdom of God.

Mark 10:14

I am not a particularly religious person, but my son is an Episcopal priest and nationally acclaimed poet who spent last year in an orphanage for little girls in Honduras(see for the full story).

Spencer has a deep feeling and profound empathy for fleeing Honduran children and their suffering. He has seen it first hand.

Out of his experience will come two things – a documentary file and book of poetry featuring poems by the girls, both to be called Las Chavas, which translated, I gather, loosely means, home for girls on the street.

Spencer and I have been discussing the current humanitarian crisis at our southern border, where more than 50,000 children, many unaccompanied by parents, have crossed over to the U.S. Their numbers are escalating exponentially. Spencer's heart is with the children. He does not care much about the politics, but feels we should do everything – anything - we can to nurture them, save them, and place them in a safer environment.

In Honduras, Spencer spent his time in Our Little Roses orphanage in San Pedro Sulas, enclosed in a compound surrounded by barbed wire and protected by armed guards. The mission of orphanage, with its 72 girls, was to educate them, nurture them, protect them, and keep them in Honduras.

Spencer has horrid tales to tell, of girls abandoned in the streets on cardboard sheets, a girl stuffed down wells to die, retarded girls secondary to starvation and malnutrition.

Spencer referred me to a July 9 New York Times article “Fleeing Gangs, Children Head to U.S. Border.” He said it was accurate. It reported the situation in San Pedro Sula, where drug-related gangs roam the streets and murder children with impunity.

Last year gangs murdered 1013 people under 23 in the nation of 8 million. San Pedro Sula has the higher murder rate of any city in the world. Children are killed for refusing to join gangs, over vendettas against their parents, and because they get caught up in gang disputes.

Half the kids flooding into the U.S. are from Honduras; virtually none come from neighboring Nicaragua, which has a similar poverty rate as Honduras. In San Pedro Sula, 60 bodies, mostly children, are stacked up in morgue, all murder victims.

What to do?

No one has a clear answer.

Deporting them back to Honduras won’t stop the murders.

Repatriating the children in the U.S. will save those who have come, but it won’t stop the flood and faces political opposition.

Securing the 2000 mile border might slow but it will not reverse the tide. President Obama said, “The best thing we can do is make sure the children can live safely in their own country.”

But that’s a long term and threatens Honduran sovereignty. Who are we to tell Hondurans to run their country, particularly when one root of the problem is the U.S. appetite for drugs which flow through their country? Besides, political corruption stands in the way.

A Peace Corps-like initiative might be dangerous.

Yet, somehow we must make the world safer for these children. Perhaps building more orphanages and safe havens for the children is Band Aid. But it will not stop marauding gangs, murders, and humanitarian hemorrhaging.