Sunday, January 25, 2015

Stamp Act of 1765 and Affordable Care Act of 2010

This is a stretch. I was reading Barbara Tuchman’s classic book The March to Folly about the misjudgments governments make in spite of evidence to the contrary.

In speaking of the Stamp Act of 1765, which has similarities with the Affordable Care Act, she says:

“Because the Act not only required a stamp on all printed matter and legal and business documents, but extended to such things as ships’ papers, tavern licenses and ven dice and playing cards, it touched every activity in every class in every colony.”

The ACA is like that: it touches the lives of every American of every class in some way at one time of another over the next decade, and it will be make its presence known in every IRS return. And for many Americans, it is “taxation without representation,” in that it passed without a single Republican vote. So far the ACA has imposed $500 billion in taxes on Americans/ Since its inception, Americans have opposed the ACA by double digit margins in over 95% of national polls.

In the words of Tuchman, the Stamp Act “was a classic case and ultimately self-defeating case of proceeding against all negative indications.” The colonies were willing to tax themselves but Parliament and King George III rejected any alternative, such as the colonies taxing themselves. The opposition was ignored “because policymakers regarded Britain as sovereign and the colonials as subjects, because Americans were not taken too seriously.”

Parliament repealed the counterproductive Stamp Act in 1766 because of its negative effect on commerce and to ward off a rebellion by the colonies.

Through his unilateral executive actions, President Obama seems to regard himself as sovereign, looks upon Republicans and state governors with disdain, and has threatened vetoes (nine so far) if his wishes are not met. He cannot envision Congress in terms of equality or as representatives of the people. Perhaps that will come if his vetoes are overridden. Perhaps it will come with repeal. Perhaps it will never come. Perhaps it will only come with a new President.
Successful Physicians Require Capital and New Practice Models

A man should never be ashamed to own he has been in the wrong, which is but saying, in other words, the he is wiser to-day than yesterday.

Jonathon Swift (1667-1745), Thoughts on Various Subjects

Over the years, I have consistently positioned myself on the side of individual physicians as key to the best health system the U.S. has to offer.

I have been wrong. I should have listened to my own advice back in 1988, when I wrote in And Who Shall Care for the Sick?The Corporate Transformation of Medicine in Minnesota, ” To survive and thrive over the long haul, physicians will have to fight fire with fire and form doctor corporations.The other "fire" is health care corporations with access to capital, mechanisms for dealing with administrative and bureaucratic tasks, the ability to organize complex technology, bringing together professionals from various fields to deliver service as a team).

Corporations who have done these things are winning. Winning corporations include: the Mayo Clinic, large integrated hospital systems, Kaiser Health, medical megaclinics, UnitedHealthcare, and other entities that organize doctors into teams or look upon doctors collectively. Private practices by individuals or small groups of individuals are losing due to lack of capital and the capacity to do the other things.

There are signs physicians are changing and recognizing that physician collectivism rather than individualism will win the day.

That is why groups of physicians forming specialty centers to perform one procedures to a limited set of procedures or common disease like diabetes or cancer have emerged as formidable health care competitors.

That is why physicians are partnering with hospitals to gain market share in local and regional markets.

And that is why the Obama administration is pushing Accountable Care Organizations (ACOs), led by hospitals and physicians sharing “savings” are one of the pillars of the health care law. At this early stage, ACOs have a mixed track record. Many existing physician organizations declined to join the ACO movement, and some of the ACO pioneers have dropped out because of expense, bureaucratic hassles, hostility of specialists, failures to save money, or the feeling they can do ACO-type organizations on their own.

But ACOs remain in the organizational chase, and their numbers are growing.

There are now 522 total accountable care organizations are serving 15 to 17 percent of the U.S. population. The 522 total of ACOs is an increase from 370 in September 2013 and 258 in February 2013. The majority of these are CMS ACOs — Pioneer ACOs, Medicare Shared Savings Program ACOs, Medicaid ACOs or participants in the Physician Group Practice Transition program. CMS' latest round of ACO approvals in January brings the total number of Medicare ACOs to 368, up from 235 in July 2013. Despite their target populations, the Medicare ACOs are still serving an estimated 33 million non-Medicare patients.

There is nothing inherently wrong with physicians being part of a corporate team that delivers the best care and the best technologies that medicine has to offer. But it requires capital and organizations to do these things right. The important thing is to retain clinical autonomy, offering high levels of cost-effective service, and keeping the patients’ best interests in the forefront.



Saturday, January 24, 2015

Health Care Transformation – Numbers Speak Louder Than Words

When you measure what you speaking about, and express it in numbers, you know something about it.

Lord Kelvin (1824-1907), Popular Lectures and Addresses


What impact are ObamaCare and health exchanges having on the health industry?

United Healthcare – The Nation’s Largest Health Insurer

Well, with UnitedHealthcare, the economic impact has been salubrious.

Revenue from premiums rose 6% to $29.38 billion, while medical costs increased 4.1% to $23.43 billion.

The company served 88.5 million individuals across all of its businesses as of Dec. 31, up from 88.2 million a year ago.

It has enrolled more than 400,000 people through the health-law exchanges, and it expects its new sign-ups to be close to 500,000.

It has increased its presence in the marketplaces to 23 states this year and plans its "footprint” next year.

It has added 15,000 customers this year in its Medical Advantage plans.

its community and state business grew its Medicaid enrollment by one million people in the past year.

Fourth-quarter revenue rose 5% in its division that includes Medicare, and 29% in the segment with Medicaid.

CVS, The Nation’s Largest Pharmaceutical Chain

CVS Health supplies more than one of every five prescriptions in the U.S. and accounts for 1% of all corporate tax revenues.

According to CVS chief executive, Larry Merlo, the U.S. health system is undergoing a health care “retailization” aimed at reducing the cost of care while making its access more convenient.

About 100 million Americans are CVS customers each year.

It has 960 walk-in “minute clinics: staffed by nurse practitioners. The clinics are open on nights and weekends with no appointments. Their prices are posted and are 40% to 80% lower than traditional physician and a fraction of the costs of emergency rooms.

The overall costs in an internal study of its 200,000 workers who use the clinics are 8% lower than those who don’t.

It has stopped selling nicotine products in its stores, and it engaged in a campaign to raise adherence to prescription use by 15%.

All of these numbers indicate a focus on health. “ Our purpose, our goal, “ says Mr. Menlo, is to help on their path to better health.

Joseph Rago, a member of the WSJ editorial board, who interviewed Mr. Menlo, comments, “Mark it down as another way private innovation is finding ways to serve patients better despite, or because of, the policy mess in Washington.” (Joseph Rago, “The Revolution at the Corner Drugstore, “ WSJ, January 24-24, 2014)

Baa! Baa! Baa!American Health Care Sheep

We’re poor little lambs who’ve last our way, Baa!Baa! Baa!

We’re little black sheep who’ve gone astray, Baa-aa-aa!


Rudyard Kipling (1865-1936), Gentleman-Rankers


Why do Americans resist ObamaCare?

Not all of us do, of course. According to the latest polls, 40% approve of the ACA. Ten million will soon be in health exchange plans. You’re covered if you’re under 26 and under your parents’ plans. You can’t be excluded from health plans if you have a pre-existing illness. And if you’ve lost your economic way, and you’ve somehow gone astray, you’ll be protected by being provided with affordable health insurance.

So why resist federal beneficence?

It’s a long and tangled tale which I shall not recite again.

But basically, Americans don't like being treated like sheep. They don't have the sameness of sheep. They don't consider themselves as homogeneous parts of a common herd. They don’t like being thought of as black sheep gone astray. They don’t wish to be culled out of a herd by the IRS, when they choose not to have a health plan. They don’t enjoy being stripped of health benefits when they work more than 29 hours a week. They don't welcome electronc medical records announeing their health status to others, and their privacy being invaded.

They don’t appreciate having the wool pulled over their eyes when they lose their doctors and health plans after told otherwise. They resent higher premiums and deductibles when while being promised$2500 lower premiums per family. They bristle when treated called "stupid" before the law was passed.

They feel they are intelligent, self-sufficient, and capable of making their own decisions. They are not lambs who have lost their way, or who think only of sucking from the federal treasury, or who simply wag their tails in response to commands from their shepherd.

Some fear their shepherd may be a lion in disguise.

Friday, January 23, 2015

Health Reform Follies

Wooden-headeness, the source of self-deception, is a factor that plays a remarkably large role in government. It consists of assessing a situation in terms of preconceived fixed notions while ignoring or rejecting any contrary signs. It is acting according to wish while not allowing oneself to be deflected by facts.
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Barbara Tuchman, The March of Folly (Alfred A. Knopf, 1984)

The Obama Administration has announced it has now has enrolled 7.1 million people in health exchanges. These people include the newly and automatically enrolled. The ACA is 80% of the way towards its goal of 9.1 million. By June, when the Supreme Court rules if people can enroll in federal exchanges, the administration expects to cover 10 million of the uninsured.

And so the march towards the high drama surrounding the Court’s decision grows and crystalises.

The Obama administration says it would be sheer folly to deprive 10 million people of health insurance and let them die on the streets, in their homes, or in institutions for the destitute.

To put in more elegant terms, “The outcome in King could determine whether millions of people continue to have access to affordable, comprehensive insurance.” ( “Predicting the Fallout from King v. Burwell – Exchanges and the ACA,” NEJM, January 8, 2014).

Or, as a medical school classmate friend of mine said when I predicted the Court would rule against the Administration, “You can’t be serious.”

This attitude reflects the pre-conceived wooden-headedness of government. Only government can care for the poor. Only government has compassion. Only government can level the economic playing field. For God’s sake , in the name of equity and social justice, doesn't everyone realize it is the duty of government to redistribute wealth and health.

This may be, but it ignores certain facts. Somewhere in the neighborhood of 55% to 60% of the American people, don’t trust government, resent losing their doctors and health plans, think the ACA ought to be repealed or fixed, voted against Obama policies in the midterms, are opposed to ObamaCare in over 95% of polls over the last five years, and believe additional entitlements contribute too much to our $18 trillion national debt.

So much for the ACA follies.

The GOP has its own set of follies.

How does it propose to deal with 10 million out there now covered and the 20 million more yet to be covered?

Surely some sort of safety net is needed. We are all human beings with human needs, and the poor will always be with us and will always need our help.

How would the GOP provide that safety net? Through Medicaid expansion? Tax credits for all? Tax loopholes for those who need loopholes to survive? Removing regulations, cutting taxes, slashing the corporate income tax, the highest in the world, and by so doing, lifting all economic boats and letting prosperity insure upward social mobility?

Can “growth,” “productivity,” and “innovation” plug the holes in the safety net? Or does it require government professionals, or the “philosopher- kings," like Obama, wwho are disciplined in the art of government?

We are about to find out. The approaching King v. Burwell ruling has all the ingredients, tensions, and conflicts of high drama.

Technology v. humanism? Your health v. your wallet? Government v. markets? Compassion v. rationing? Collectivism v. individualism? Control v. choice? Washington v. the states? Obama v. Congress? Compromise v. confrontation?

Can government take away what it has already given? That is the $1.5 trillion question, give or take a $ 1 trillion. What the hell, who cares, it's only tasxpayer mney.

Thursday, January 22, 2015

Low Cost, High Quality, Accessible Physician-Directed Health Care Delivery Models

The American health care industry is filled with opportunities to establish focused factories ranging from those that perform only one procedure, like cataract surgery, to those that provide the full panoply of care for a disease like cancer.

Regina Herzlinger, Market-Driven Health Care (Addison-Wesley Publishing, 1997)

The main problems facing health care and the reason for being of health reform are high costs, uneven quality, and limited access.

Is there any way of overcoming obstacles to good care in consumer-driven democracy other than government-mandated care?

Yes, said Regina Herzlinger, professor at Harvard Business School in her 1997 book Market-Driven Health Care.

Her answer was two-fold: value-hungry consumers and independent physician entrepreneurs satisfying that hunger.

The answer, she explained, resided in health-care “focused factories”, an off-putting term that appeared in a Harvard Business Review in 1974. The term meant focusing on a limited product, consumers, and efficiency throughout an entire organization.

In health care, a focused factory consists of groups of physicians working together to provide a clear, limited objective - the treatment of a specific health care problem or set of problems.

These problems might be surgical: cataracts, hernias, joint repairs, minor surgeries in ambulatory patients. They might be medical: diabetes, asthma, cancer, congestive heart failure.

Whatever the problem, the solution rests on these premises:

• Simplicity and repetition breeds competence.

• The treatment team is organized around patients’ every need and addresses every detail catering to that need.

Focused factories are proliferating around the U.S. They “focus” on the health care consumer. They are a factory in the sense they are efficient, safe, responsive, uniform, and fast in delivering a high quality product.

The “factories” often focus on a procedure, such as cataract surgery. They are comprehensive, anticipating and responding to the patients’ every need, being picked up and delivered to the factory, meticulously shepherding them through every aspect of the procedure, following up through patient phone calls and visits, and working hand-in-hand with the ophthalmologist-owners of the factory.

According to Herzlinger, “The driving force (behind focused factories) is a generation of consumers who are empowered, pragmatic, narcissistic and manipulative. They're the ones who have changed the rest of the economy and they're very interested in health care. There's no reason for any rational person to believe that they're going to say, ‘Oh no, leave health care in the hands of these people who are going to tell me what to do.’ Today's consumers simply won't accept that. The second driving force is technology, which has already vastly increased the quality and lowered the cost of health care.”

I believe there will be a third driving force: consumer-demands for direct, personal, accessible, cost-efficient health care without third-parties. Third party supervision, whether governmental or insurer administered, is costly, accounting for 40% to 50% of overhead in the typical physician’s office, and it is distracting, leading to 20% of physician time spend on paperwork rather than time with patients. These expenses and distractions have to end. One solution may be direct primary and surgical care, wherein costs are lower and care is more personal and immediate and known in advance.