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Another Big Idea

Posted Apr 20 2011 2:07pm


Stanley Feld M.D.,FACP,MACE

President Obama refuses to listen to this big idea. He is not focused on the real problems in the healthcare system.

A healthcare cost saving of at least $800 billion dollars a year would occur if the complications of chronic disease could be decreased by 50% .  It could occur if he concentrated on changing the culture from medicine’s job is to fix disease to society’s job is to prevent disease. Patients must also learn to be responsible for the self-management of their chronic disease.

The healthcare system is dysfunctional. President Obama’s Healthcare Reform Act will not fix this dysfunction. It is making it worse. He is ignoring many of the real causes of the inefficiencies in the healthcare system. 

The question is who is at fault? All the stakeholders are at fault. The stakeholders are the healthcare insurance industry, the government, the hospital systems, the physicians and most importantly, the patients.

President Obama is ignoring the patient’s role and responsibility in the inefficiency of the healthcare system. He is focusing exclusively on the physician’s role.

Once President Obama is successful in making medical care a commodity the patient-physician relationship will be destroyed. The patient –physician relationship accounts for a large part of the therapeutic effect of a treatment.

The primary stakeholders are patients with physicians. Without patients or physicians we would not have a healthcare system. Healthcare insurance companies, the government, and hospitals are secondary stakeholders. President Obama focus will increase the benefits of the healthcare system to the secondary stakeholders and not to patients.

The healthcare insurance industry has turned out to be the biggest villain . It has taken advantage of the dysfunction of the government and weakness of patients and physicians as lobbying groups. The healthcare industry takes sixty cents out of every healthcare dollar spent by Medicare, Medicaid and private insurance. President Obama’s Healthcare Reform Act’s rules and regulations do not deal with the healthcare industry control over these healthcare dollars.  It has yielded to every demand by the healthcare insurance industry.

The healthcare insurance industry is abusing its power. It has manipulated congress and the administration to serve its own vested interest.

The result is grotesque salaries for executives and excessive administrative fees. Our healthcare system is supposed to be for the benefit of the consumers (patients), not for the benefit of the healthcare insurance industry.

The healthcare industry has restricted access to care. It has decreased physicians’ reimbursement and withheld payments for services rendered without explanation or justification.

The government outsources the administration of Medicare and Medicaid to the healthcare insurance industry.  

There are many examples of healthcare insurance industry abuse of the healthcare system. Medicare Part D provides an excellent example. Medicare Part D fees for 2011 increased once again with the consent of the government. These new fees are abusive to seniors. It is difficult to understand why government regulars do not defend seniors.

Seniors on fixed incomes need a reliable drug coverage plan. The healthcare insurance industry lobbied for four years to get a drug plan passed that would be to its advantage at the expense of the government and seniors.

The government subsidizes Medicare Part D . Yet the government cannot negotiate drug prices. The abuses are the result of high deductibles and a doughnut hole that does not provide drug coverage between $2,700 and $5200 dollar spent. Prices are rigged so a patient can find himself in the doughnut hole in a hurry.

Humana and United Healthcare rushed to insure seniors under Medicare Part D. They visualized the money making opportunity quicker than most of the other healthcare insurance companies.

Both companies also realized that as healthcare insurance premiums increased in the private sector there would be more uninsured consumers. The less lives covered the lower its profit. Therefore a drug plan leveraged in their favor sponsored by the government would cover the decrease in profit in the private sector.

United Healthcare made a profit of $4.7 billion dollars last year from Medicare Part D at patients at the government’s expense . Despite this enormous profit the Medicare regulator have permitted United Healthcare to increase the premiums each of the last five years.  

On careful analysis seniors are being ripped off. In response seniors have flocked to Wal-Mart and others to buy $4.00 per month generics drugs. They pay cash and avoid using brand name drugs. Their goal is to avoid the Medicare Part D doughnut.

If seniors used Medicare Part D, their co-pay would be $6.00 for a month’s supply of medication rather the $4.00 paying cash at Wal-Mart. The doughnut could be charged between $20 and $50.  The healthcare insurance company would probably only pay Wal-Mart $4.00. None of these price manipulations are transparent or restricted. Seniors are the losers.

Medicare Part D is a good place to start to understand the abuse of this non-transparent system. President Obama is making a big deal of his token changes to Medicare Part D. His changes are not significant.

There is a tremendous waste of government and consumer resources. Real price transparency is essential if there is going to be any progress in reducing the cost of the healthcare system.

What do I mean by real price transparency? It means knowing,

  1. The cost of the drug to the pharmacy.
  2. The cost of the drug to the healthcare insurance company.
  3. The price of the drug calculated toward the doughnut.
  4. The government subsidy for the cost of the drug to the healthcare insurance industry for administration of the program.
  5. The profit for the healthcare insurance industry.

If real price transparency occurred, we would be able to have a competitive pricing system.

The administration is busy penalizing patients with decreased access to care and physicians with decreased reimbursement to decrease healthcare costs. It should focus on the real villain in the healthcare system, the healthcare insurance industry.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.

 

 

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