Renew SCHIP

Dear Friends and Colleagues;
I am seeking your help in mobilizing support to extend and expand the SCHIP (State Children's Health Insurance Program).
SCHIP was established in 1997 through a bipartisan effort to provide health insurance for several million uninsured children that do not qualify for Medicaid and otherwise would have fallen through the cracks of our so-called "healthcare system."
SCHIP is being funded by the federal and the state government(s) at an ~ 70/40 ratio.
It is set to expire and faces mounting criticism focusing on the following issues: a) including adults, b) including children from families whose income exceed 3-4 the poverty level, c) lack of physicians participation due to low reimbursement, d) allegations that it undermines the private health insurance system.
The AMA and other organizations SUPPORT the reauthorization of SCHIP. President Bush threatens to veto any new bill and objects on "philosophical grounds" to a bipartisan Senate proposal to boost the State Children's Health Insurance program by $35 billion over five years. Bush has proposed $5 billion in increased funding and has threatened to veto the Senate compromise and a more ambitious expansion being contemplated in the House.
Providing health insurance for approximately 4-5 million children has nothing to do with ideology, philosophy or faith. Its a common sense issue: provide primary care services for children now thereby preventing illnesses and costly treatment later in life.
Private insurance companies have FAILED to offer such services. I have spoken with many of my patients about that and have heard the same story over and over: in the beginning the insurance rates are affordable and then progressively increase until they cant afford it anymore.
Lets not get bamboozled by ideological knuckleheads at both extremes of the political spectrum.
Call your Senator and Congressman/woman and demand a reauthorization of the SCHIP program. Call the White House and remind our President that his veto is a veto against our children's health!
Yours
Bernd
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Miami Herald, Posted on Thu, Jul. 19, 2007
For healthy children, better opportunity
More than eight million U.S. children are starting out life with poor prospects because they lack health insurance. This is reason enough to support a federal program with a strong track record of helping Florida and other states provide coverage to needy children. Better yet, Congress appears poised to expand the program. It is the right move when the need to protect vulnerable children is so great.

In a rare instance of bipartisanship, there is widespread support in the Senate and House for an expansion of the State Children's Health Insurance Program. President Bush, however, threatens a veto. He believes the plans under discussion would unacceptably expand ''government-run healthcare.'' Surely there is reason to enact a bill with adequate controls that will significantly increase the number of children with ready access to healthcare.

Unacceptable proposal

The federal program insures children from working-poor families through state plans such as Florida's KidCare. Yet the current annual funding level of $5 billion doesn't stretch enough to cover all eligible children. This is why the Senate and House are discussing plans that would double or triple the funding.

President Bush is proposing a $1 billion increase per year, but that isn't enough. His proposal would result in a reduction in the number of children in the program be cause the funding wouldn't cover rising healthcare costs. This isn't acceptable.

The Senate bill is a compromise agreed upon last week. It would increase funding to $12 billion per year. It would also:

• Be financed by raising the cigarette tax to $1 a pack. This would discourage smoking and promote better health.

• Encourage states to enroll the poorest children and discourage enrollment of higher-income children. This targets the most vulnerable population.

• Leave out a key group that should be covered: up to 750,000 legal immigrant children who are not yet citizens. This is unfair and unhealthy. They should be included.

The House is considering a bigger expansion to $15 billion a year -- the estimated cost of covering all uninsured children.

President Bush and others argue that such an expansion would displace private coverage. But the vast majority of the millions of needy children who would benefit from the Senate plan currently are uninsured or would lose state coverage without increased funding. Tax subsidies proposed by President Bush would most benefit children who already have private coverage.

Insured children are more likely to get preventive healthcare, stay healthier, attend school and avoid the emergency room. Healthy children are better prepared to learn, which improves their future economic prospects. Expanding the federal program should radically improve children's access to healthcare nationwide.


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Miami Herald, Posted on Thu, Jul. 19, 2007
Senate panel OKs child health bill
By KEVIN FREKING
Brushing aside threats of a presidential veto, a Senate committee on Thursday approved a five-year, $35 billion expansion of a children's health insurance program that would be financed through higher tobacco taxes.

A majority of Republicans on the Senate Finance Committee joined all of the committee's Democrats in voting to reauthorize the State Children's Health Insurance Program. The program subsidizes insurance for children and some adults with incomes too high for Medicaid but not high enough to afford private insurance. The vote was 17-4.

"There are more kids without health insurance than there are kids in the first and second grades," said Sen. Max Baucus, D-Mont., the committee chairman. "Americans overwhelmingly support getting kids covered."

The additional spending the committee approved would bring total SCHIP funding to $60 billion over five years - double what the administration has proposed. The tax on a pack of cigarettes would increase by 61 cents to help pay for the expansion. Taxes on cigars and chewing tobacco also would jump.

The committee's Democratic leaders had wanted to add $50 billion to the program, and their House counterparts are determined to pursue that amount. The compromise forged by the committee could become extremely fragile if GOP senators are forced to vote on an expansion much beyond what the committee approved.

"I hope they understand it takes 60 votes to get anything done in the United States Senate," said Sen. Charles Grassley, R-Iowa.

The 60 votes would be needed to overcome a filibuster. Baucus said he believes his proposal has enough support to overcome such a hurdle, as well as a promised veto from the president.

"The vote speaks for itself," Baucus said.

Lawmakers said the $35 billion expansion would allow 6.6 million people to maintain their current health coverage, and it would provide coverage for another 3.2 million uninsured children.

The administration reacted to the vote by saying that sending the president a bill he cannot sign puts at risk millions of needy children who would lose health insurance when the program's funding expires Sept. 30.

"We are ready to renew our commitment to low-income children today, but we cannot agree to a gradual government takeover of health care - and neither will the American people," said Health and Human Services Secretary Mike Leavitt.

Some dissenters on the committee believe the legislation raises taxes unnecessarily and does not do enough to refocus the program on low-income children.

"The Democrats are playing a game of reverse Robin Hood with this legislation," said Sen. Trent Lott, R-Miss.

The program began 10 years ago. It was generally designed to help families whose income does not exceed 200 percent of the poverty level, or $34,340 for a family of three. But several states have extended coverage to children with higher incomes and to adults. The latter expansion has particularly incensed some lawmakers who disapprove of waivers the Bush administration has granted to those states.

The SCHIP program is going in the opposite direction from where it should be going, said Sen. John Ensign, R-Nev., who voted against the proposal along with Lott, Jim Bunning, R-Ky., and Jon Kyl, R-Ariz.

The Senate proposal would gradually move adults who don't have children out of the program. States would have the option to cover them through Medicaid. The federal government also would lower the percentage, or matching rate, that it pays for parents' coverage. In addition, the federal government won't be allowed to grant new waivers to states allowing them to cover parents. But states will have the option of providing coverage to pregnant women through SCHIP.

Congressional Budget Office officials testified that spending on adults would drop by $1 billion over the next five years under the Senate proposal.

"We've been handed a mess by this administration," said Sen. Kent Conrad, D-N.D., referring to the adult coverage. "This takes steps to change that. That's a fact."

Several advocacy groups are supporting the higher tobacco tax because it would not only fund the program's expansion, but because higher taxes also lead to less smoking.

For every 10 percent increase in the price of cigarettes, overall cigarette consumption drops by about 4 percent, and the rate drops even more for children.

"Research shows a clear health benefit from higher tobacco taxes," said William Carr, executive director of the Campaign for Tobacco-Free Kids.

Overall, the federal tax on a pack of cigarettes would go up to $1 a pack

The tax on cigars is much more complicated to calculate. But Norm Sharp, president of the Cigar Association of America, said the tax for large cigars could go from a cap of about 5 cents a cigar to a cap of $10 a cigar.

"We're looking at cigars going up in price at retail 2.5 times to 3 times current prices," Sharp said.

"How do we explain that, justify that, or do we even care?" Lott said at one point when asking colleagues about the tax increase on cigars.

"A $10 cap on a very expensive cigar would not be terribly onerous," Baucus replied
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Miami Herald, Posted on Thu, Jul. 19, 2007
Bush rejects children's health plan boost
BY CHRISTOPHER LEE
President Bush on Wednesday rejected entreaties by his Republican allies that he compromise with Democrats on legislation to renew a popular program that provides health coverage to poor children, saying that expanding it would enlarge the role of the federal government at the expense of private insurance.

The president said he objects on philosophical grounds to a bipartisan Senate proposal to boost the State Children's Health Insurance program by $35 billion over five years. Bush has proposed $5 billion in increased funding and has threatened to veto the Senate compromise and a more costly expansion being contemplated in the House.

''I support the initial intent of the program,'' Bush said during an interview after a factory tour and discussion on healthcare with small-business owners in Landover, Md. ``My concern is that when you expand eligibility . . . you're really beginning to open up an avenue for people to switch from private insurance to the government.''

The 10-year-old program, which is set to expire Sept. 30, costs the federal government $5 billion a year and helps provide health coverage to 6.6 million low-income children whose families do not qualify for Medicaid but cannot afford insurance on their own.

About 3.3 million additional children would be covered under the proposal developed by Senate Finance Committee Chairman Max Baucus, D-Mont., and Republican Sens. Charles Grassley of Iowa and Orrin Hatch of Utah, among others. It would provide a total of $60 billion over five years, compared with $30 billion under Bush's proposal. And it would rely on a 61-cent increase in the federal excise tax on cigarettes, to $1 a pack, an increase Bush opposes.

Grassley and Hatch, in a joint statement this week, implored the president to rescind his veto threat. They warned that Democrats might seek an expansion of $50 billion or more if there is no compromise. They also said Bush should drop efforts to link the program's renewal to his six-month-old proposal to replace the long-standing tax break for employer-based health insurance with a new tax deduction that would help people pay for insurance regardless of whether they get it through their jobs or purchase it on their own.

''Tax legislation to expand health insurance coverage is badly needed, but there's no Democratic support for it in the SCHIP debate,'' said Grassley, the ranking Republican on the finance committee. ``In the meantime, our SCHIP initiative in the finance committee takes care of a program that's about to expire in a way that's more responsible than current law and $15 billion less than the budget resolution calls for.''

But Bush said he was not persuaded.

''I'm not going to surrender a good and important idea before the debate really gets started,'' Bush said. ``And I think it's going to be very important for our allies on Capitol Hill to hear a strong, clear message from me that expansion of government in lieu of making the necessary changes to encourage a consumer-based system is not acceptable.''

The Senate committee is scheduled to consider the compromise legislation today, and the House is expected to try to pass its own version before the congressional recess in August.

Rep. Rahm Emanuel, D-Ill., the Democratic caucus chairman, said he was ''bewildered'' that Bush was fighting expanded funding for a program supported by Republicans and Democrats alike. ''This is the chance for him to finally be a uniter and not a divider,'' Emanuel said.

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Addiction Research In The News

I hope you didn't miss todays (07/10/07) great interview with Dr. Volkow on NPR (Fresh Air) entitled "No,really, this is your brain on drugs."
Nora Volkow, director of the National Institute on Drug Abuse, ranks as one of the U.S.'s leading addiction researchers. She's helped demonstrate that addiction is in fact a disease — a disease of the brain — and that all addictions, whether it's to drugs, alcohol, tobacco, sex, gambling or even food, are more alike than was previously thought.Volkow, who's the great-granddaughter of Russian revolutionary Leon Trotsky, grew up in Mexico City — in the house where her famous ancestor was assassinated.
Very informative and fascinating.
A MUST for anybody who is interested in addiction and want to draw others towards other profession.

LINK: http://www.npr.org/templates/story/story.php?storyId=11847222

Yours

Bernd

Muslim Doctors and Terrorism Charges

Dear Friends and Colleagues:
The recent terror attacks in Great Britain unleashed a new wave of anti-Muslim sentiments. The fact that medical doctors from the Middles East and India were involved coined a new phrase " Doctors of Terror" and questions the loyalty and reliability of "Muslim Doctors."
A recent article in the New York Times highlights the fact that seven doctors are tied to the terror plots that unfolded in Britain. Furthermore, the US press has reported that at least two of the doctors have inquired about US licensure and residency training programs.
A recent letter to the editor "Doctors of Terror" in an Orlando newspaper was written by an IMG (International Medical Graduate)and ends with the gloomy prediction,
"Sadly, nothing is immune to terror, hate and murder -- not even one of the noblest professions that is dedicated to the welfare and health of mankind."
Right wing bloggers and talk show hosts are whipping up a frenzy to mislead people in believing that Muslim doctors are "Doctors of Terror."
As an International Medical Graduate, Jew and Israeli citizen I am appalled by the frontal assault on my fellow colleagues of the Muslim faith.
Terrorists are motivated by hate and the delusion of grandeur to control other peoples fate and life. Religion is just the cover to vaguely conceal their distorted narcissistic characters and to justify their nihilistic world view.
Even though many terrorists are Muslims, most Muslims are NOT terrorists! Singling out Muslim doctors alienates Muslims instead of recruiting them in our joint struggle to fight terrorism and to build a better world.
Its time for IMGs in organized medicine to speak up against any attempts to stigmatize our fellow Muslim colleagues and to defend their rights.
Join me in this effort!
Bernd Wollschlaeger,MD
Past Chair AMA IMG Section
Chair Florida Medical Association IMG Section

P4P: An Evidence Based Approach

By Bernd Wollschlaeger,MD,FAAFP

" The fact that nearly three-quarters of the general internists we surveyed support financial incentives for quality could be surprising, given their concerns about unintended consequences, possible fear of the unknown, and literature on physician professionalism suggesting that physicians prefer not to subject their performance to external oversight. Respondents might simply have seen such incentives as a way to gain more income; this belief might have outweighed
any resistance they had to external oversight."

"The majority supported financial incentives for quality, although they conditioned their support on measures’ being accurate."

Dear Friends and Colleagues:
In the heated discussion about the so-called Pay-For Performance (P4P) Programs we often forget to consider the views of those we claim to represent: the practicing physicians.
I am concerned that ideological tainted viewpoints distort rational approaches towards this issue, thereby failing to consider the pros and cons of a topic that may affect us all.
In a series of reviews I will therefore present on my blog a variety of different articles discussing evidence-based P4P applications:

In the first article ( see attached abstract) the authors present the views of General Internists and their attitude towards public reporting of quality scores.

DESIGN:
To learn more about physicians’ views, the authors conducted a national survey of general internists. Their views, although not necessarily representative of all physicians, are important both because of the large numbers of general internists and because most physician P4P programs focus on primary care.
METHODS:
The sampling frame included 1,668 randomly selected general internists listed in the AMA Physician Masterfile as working in one of the twelve broadly nationally representative metropolitan areas included in the Community Tracking Study (CTS) of the Center for Studying Health System Change (HSC).A cover letter and a seven-page self-administered questionnaire were mailed to the sample in April 2005, with follow-up surveys to nonrespondents mailed in four subsequent waves. The survey was developed after review of the relevant literature, input from experts in P4P and public reporting, and pilot testing with academic and community physicians. The Institutional Review Board (IRB) at the University of Chicago approved the study protocol.
Of the 1,668 physicians selected, 500 were ineligible: 188 surveys were undeliverable; 14 were returned uncompleted with a note stating that the physician was no longer in practice; 46 respondents were not general internists; and 252 additional physicians were not at the address to which the survey had been mailed, according to the phone calls made to nonrespondents’ offices. Of the 1,168 remaining subjects, we received 556 completed surveys, for an adjusted response rate of 48 percent.
RESULTS:
Attitudes toward P4P and public reporting. Almost three-fourths of responding physicians agreed that "if the measures are accurate, physicians should be given financial incentives for quality"
However, only 4 percent strongly agreed and 26 percent somewhat agreed that measures of quality are generally accurate at present. Most respondents had little confidence that this will change: 38 percent believed that health plans will try hard to make the measures accurate, and 35 percent believed that government will do so
There was much less support for public reporting than for financial incentives for quality. Only 45 percent of respondents supported public reporting of medical group performance , and only 32 percent supported reporting of individual physicians’ performance. One in three physicians strongly supported financial incentives, but only one in twelve strongly supported public reporting for medical groups, and one in nineteen strongly supported it for individuals

Attitudes toward quality measures and possible unintended consequences. Only 30 percent of physicians agreed that measures of quality are generally accurate. Eighty-eight percent believed that measures are not adequately adjusted for patients’ medical conditions; 85 percent believed that they are not adequately adjusted for patients’ socioeconomic status; and 82 percent stated that quality measures could lead physicians to avoid high-risk patients. Many physicians added written comments stating that poorly compliant patients would also be avoided: For example, "If my pay depended on A1c values, I have 10–15 patients whom I would have to fire. The poor, unmotivated, obese, and noncompliant would all have to find new physicians."
The survey results suggest that physicians are also concerned that "measuring quality will divert physicians’ attention from important types of care for which quality is not measured." Sixty-one percent strongly or somewhat agreed with this statement; many added written comments stating that many quality measures cover physician activities that they do not consider very important compared with many other things they do.

Are some physicians more likely to support P4P or public reporting? The authors performed bivariate and multivariate analyses to learn whether physician support for P4P or public reporting is associated with whether the physician has financial incentives for quality, sees relatively poor patients (measured by percentage of Medicaid patients), and has an income that is primarily based on patient volume.They also tested they associations with physicians’ age, sex, and board certification.
The main finding on bivariate analyses was that physicians who now have financial incentives for quality were more likely to support such incentives than those who do not. These physicians were also more likely to support public reports on medical groups. One-fourth of respondents (130 physicians) reported having financial incentives for quality;for most, the incentive amounted to 5 percent or less of their income (data not shown). Multivariate analysis produced results consistent with the bivariate analyses.

DISCUSSION:
" Support for P4P. Our results suggest that there is a sizable potential reservoir of physician support for P4P: Nearly three in four internists stated that physicians should be given financial incentives for quality if the measures are accurate. However, responses also suggest that there are barriers to overcome if P4P programs are to gain physicians’ support: Fewer than one-third of internists stated that quality measures are accurate at present, and only slightly more than one-third believed that health plans and the government will try hard to make measures accurate.

Support for public reporting. Internists were far less supportive of public reporting than of financial incentives for quality: One-third supported public reporting of individual physicians’ quality scores, and only 45 percent supported public reporting at the medical group level.

Concerns about financial incentives for quality. Although the majority of respondents supported financial incentives for quality in principle, they appear to have been very concerned about possible unintended and undesirable consequences. Large majorities of respondents stated that quality measures are not adequately adjusted for patients’ medical conditions or socioeconomic status; that measuring quality may lead physicians to avoid high-risk patients; and that measuring quality will divert physicians’ attention from important but unmeasured areas of clinical care.

Concerns about public reporting. Although a large majority of respondents supported financial incentives for quality, a large majority opposed public reporting, especially reporting of individual physicians’ performance. To our knowledge, this is the first survey to report this gap. We do not have data to explain this finding; it is possible that respondents believed that they were unlikely to lose much from having financial incentives for quality but feared that a poor public quality rating would be humiliating and might lead to losses of patients and of peer approval.

Other relevant studies. To our knowledge, this is the first national survey to be published of physicians’ views on P4P and public reporting. Some relevant studies have been conducted in more limited settings. In an e-mail survey of nearly 6,000 Massachusetts physicians (response rate was 7 percent; 29 percent were internists), the Massachusetts Medical Society (MMS) found that respondents were open to quality measurement but did not believe that current measures were accurate. Four physician surveys related to public reporting have been conducted; each surveyed either cardiologists or cardiac surgeons in New York or Pennsylvania, where data on cardiac procedures are publicly reported.The results were similar across the surveys: The majority of respondents stated that the measures were not adequately risk-adjusted and believed that public reporting was leading physicians to avoid doing bypass surgery or angioplasty on high-risk patients.

Possible rationales for survey results. The fact that nearly three-quarters of the general internists we surveyed support financial incentives for quality could be surprising, given their concerns about unintended consequences, possible fear of the unknown, and literature on physician professionalism suggesting that physicians prefer not to subject their performance to external oversight.12 Respondents might simply have seen such incentives as a way to gain more income; this belief might have outweighed any resistance they had to external oversight.

An alternative, or complementary, explanation is that physicians would like to improve the quality of care and believe that P4P would finally give them a "business case" for investing in improving quality.Respondents who reported having financial incentives for quality were more likely to support such incentives: Their experience with incentives might have been positive, although it is also possible that physicians who are open to financial incentives for quality are more likely to join practices that have such incentives.

A third possible explanation is that physicians who oppose P4P were less likely to respond to the survey and that our results therefore overstate the degree of support. However, nonrespondents were very similar to respondents, except that nonrespondents were less likely to be board-certified. Since non-board-certified respondents were equally or slightly more likely to favor financial incentives for quality, this potential source of nonrespondent bias seems unlikely to greatly alter our results.

Possible study limitations. Several possible limitations should be considered in evaluating our results. First, the results are not representative of all U.S. physicians; rather, they are limited to general internists in twelve metropolitan areas. Although these twelve areas are not precisely statistically representative of U.S. metropolitan areas, they represent a broad cross-section of such areas in the country and have been used as the sampling frame for major studies of health care quality.
Second, our response rate was modest, though not atypical for physician surveys; it appears, for the reasons detailed above, that nonresponse bias is unlikely to have greatly affected our results. Third, the survey asked about "financial incentives for quality" in general, not about any specific incentive program, so different physicians might have had different programs in mind when responding.

Implications for quality improvement in public and private programs. Our findings suggest three main implications for Medicare and for other public and private policymakers seeking ways to improve the quality of health care. First, there is a large potential reservoir of physician support for P4P, at least among general internists. However, respondents’ concerns about unintended consequences, and their lack of trust that health plans and government will work hard to make quality measures accurate, suggest that physician support could disappear very rapidly if these consequences do occur. Recent experience with such highly touted innovations as utilization review and primary care gatekeeping suggest that potentially useful policies might generate a strong backlash if they are not framed and implemented with attention to physicians’ concerns.

Second, respondents’ concerns suggest that evaluations of P4P and public reporting programs should be explicitly designed to assess possible unintended consequences on disparities in health care, on physicians who practice in areas of low socioeconomic status, and on the quality of care in important areas of physician practice not included in the program being evaluated.

Third, if further research replicates the large gap we found between physician support for P4P and support for public reporting, policymakers might want to consider whether and how to deal with this difference when designing and sequencing their programs. Although respondents expressed a lack of trust in health plans and in the government, they did not simply oppose change: The majority supported financial incentives for quality, although they conditioned their support on measures’ being accurate. They doubted that measures are adequately risk-adjusted for patients’ medical conditions or socioeconomic status—doubts that are supported in the literature.They were considerably more supportive of public reporting at the medical-group level than at the individual-physician level—a reservation that is supported by research demonstrating the difficulty of creating reliable and valid quality measures for individual primary care physicians.And they were concerned about possible unintended consequences of measuring and rewarding quality—a concern that is supported by economic theory and by experience in other industries.Policymakers might wish to pay close attention to physicians’ concerns both to increase physician support for programs and because these concerns could be quite important for improving the quality of care.
EVALUATIONS OF P4P and public reporting programs should be explicitly designed to assess possible unintended consequences on disparities in health care delivery, on physicians who practice in areas of low socioeconomic status, and on the quality of care in important areas of physician practice not included in the program being evaluated.




MARKETWATCH
General Internists’ Views On Pay-For-Performance And Public Reporting Of Quality Scores: A National Survey
Lawrence P. Casalino, G. Caleb Alexander, Lei Jin and R. Tamara Konetzka

Very little is known about rank-and-file physicians’ views on pay-for-performance (P4P) and public reporting. In a national survey of general internists, we found strong potential support for financial incentives for quality, but less support for public reporting. Large majorities of respondents stated that these programs will result in physicians’ avoiding high-risk patients and will divert attention from important types of care for which quality is not measured. Public and private policymakers might avoid a physician backlash and better succeed at improving health care quality if they consider these concerns when designing P4P and public reporting programs.

Health Affairs, 26, no. 2 (2007): 492-499
doi: 10.1377/hlthaff.26.2.492

AMA 2007 Annual Meeting Update

Dear Friends and Colleagues;
Attached an AMA endorsed summary of important decisions made at the AMA Annual meeting.
For more information see http://www.ama-assn.org/ama/pub/category/17266.html .
Yours
Bernd
AMA Delegate


* Amendments to Constitution & Bylaws


* The AMA adopted new policy to protect patients’ ability to get legally valid prescriptions filled, or to be referred to an appropriate
alternative, without interference from pharmacists’ objection`to certain medications. This new policy resolves that the
AMA work with state medical societies to advocate for state legislation that will allow physicians to dispense medicine to
their patients when there is no pharmacist able and willing to dispense that medication within a 30-mile radius.
* The AMA adopted policy from CEJA that calls on all physicians to reduce disparities in care in their practices by taking into account language barriers, culture and ethnic characteristics and biased behavior.
* The AMA adopted CEJA policy that makes a physician who gives a diagnostic imaging test to a patient—without referral from another physician—responsible for relevant clinical evaluation, as well as pre- and post-test counseling concerning the test. Post-test counseling, however, may be referred as long as the other physician accepts the referral.
* The AMA reaffirmed policy condemning physicians’ participation in torture and other cruel, inhuman or degrading treatment or punishment of prisoners or detainees. Additionally, the AMA now encourages medical schools to include ethics training on this issue.

* Reference Committee A

* The AMA adopted several recommendations regarding state options to improve coverage for the poor. It urged specialty societies and state and county agencies to support state demonstration projects to expand health insurance to low-income patients. It also would encourage state governments to maintain an inventory of private health plans and design an information clearinghouse for individuals, families and small businesses.
* The AMA voted to research and publicize existing studies on how health care money is spent. The intent is to identify the amount of public and private health care spending that is transferred to insurance administration compared to industry standards.
* After a lengthy and impassioned debate between delegates, the AMA resolved to prepare legislation that will allow physicians to balance bill all payers—including Medicare patients—and seek sponsors for the measure in Congress. The AMA also will support federal legislation allowing physicians and hospitals to cancel or reduce co payments for hardship cases without a change in fee schedules.

* Reference Committee B

* The AMA adopted as official policy principles and guidelines on pay for performance (PfP). It also adopted enhancements to these principles and guidelines, which include, among other items, that the AMA would reject any PfP program put forth by a private or public payer that is not consistent with those guidelines.
* Delegates reaffirmed that a high priority be placed on securing a repeal to the current sustainable growth rate formula, replacing it with a more predictable system that recognizes the true costs of providing physician services.
* The AMA reaffirmed that it will advocate that section 215 of the U.S.A. Patriot Act—which demands that physicians disclose patients’ medical information to law enforcement agencies without telling patients—be replaced or modified if reauthorized by Congress.
* Delegates have referred to the Board of Trustees a resolution that asks the AMA to advocate for state and federal legislation that requires an advance directive at the time of enrollment in a health insurance plan or at the time of application for a driver’s license.

* Reference Committee C

* There is now a shortage of physicians (at least in some regions and specialties) and evidence exists for additional shortages in the future. The AMA will work with members of the Federation and national and regional policy makers to address the current and predicted physician shortages.
* Delegates adopted policy to ensure adequate funding for medical schools, graduate medical education programs and teaching institutions where medical education occurs, including creating mechanisms to fund additional medical school positions. The AMA will seek federal legislation requiring all health insurers to support graduate medical education through an all-payer trust fund created for this purpose.
* The AMA will support national efforts to improve the health services to underserved minority communities and encourage recruitment of qualified underrepresented minorities to the profession of medicine.
* The AMA will partner with all relevant stakeholders to petition Congress to reinstate funding for Title VII and to inform legislators in Congress about how Title VII-supported programs address health professional shortages, increase the diversity of the workforce, equip health professions students to work in health centers and underserved communities and ensure that health professionals are ready to address health-related emerging issues.

* Reference Committee D

* The AMA adopted new policy to reduce health disparities suffered because of unequal treatment of minor children and adults in gay, lesbian, bisexual and transgender families.
* Delegates also adopted policy to promote consumption and availability of nutritious beverages as a healthy alternative to carbonated sodas and sugar-added juices in public schools.
* Delegates referred to the Board of Trustees a recommendation to study the utilization of new and old Medicare preventive service benefits, including the Tobacco Cessation Benefit. The goal is to provide proper quality preventive services to Medicare patients.
* Delegates adopted a revised policy to encourage periodic pediatric eye screenings based on AAP, AAFP and AAO evidence based guidelines, with referral to an ophthalmologist for a comprehensive, professional evaluation as appropriate.

* Reference Committee E

* A Council of Scientific Affairs Report deals with the safety and efficacy of selective serotonin reuptake inhibitors (SSRIs) in children and adolescents. This report was adopted, with the caveat that while the AMA supports the Food and Drug Administration’s (FDA) black box on SSRIs, it wants the FDA to monitor the impact of the black box, to ensure it does no affect appropriate access to patient care.
* Direct-to-consumer advertising was another important area of debate. The AMA will evaluate strategies to minimize the potential negative impact of direct-to-consumer marketing.
* There were several dietary supplement resolutions handled by the reference committee. In general, our AMA’s goal has been to change the existing Dietary Supplement Health Education Act (DSHEA) to make the regulation of dietary supplements comparable to the drug model and the AMA continues to make significant effort to address the DSHEA inadequacies.
* Delegates adopted policy that addresses the need to clean up the Internet regarding the illegal sales of prescription drugs,such as utilizing actions with credit card companies.

* Reference Committee F

* The AMA has recommended investigating the feasibility of developing and marketing a health insurance plan tailored for medical students. The AMA will work with the AMA Insurance Agency and issue a report at the 2005 Interim Meeting.
* Due to proposed congressional action, the AMA will work with specialty organizations to express concern to the NIH and others, to oppose mandatory submission of manuscripts, and to address the issue of direct linking from PubMed Central to not-for-profit journals.
* The AMA adopted the recommendation to work with state medical societies and their legislatures to ensure that the title “physician” is used only by those who have completed a qualified medical school and have received an MD or DO degree.
* The AMA will encourage the media strongly to require that an`actual degree be affixed to the name of all individuals who`endorse health-related products.

* Reference Committee G
* Delegates adopted policy that supports the principle that when`physicians receive financial assistance from inpatient facilities to`obtain health information technology or “HIT” systems, their`choice of which system to purchase should not be unreasonably`constrained, nor should they, the physicians, be required to`share confidential patient information with the facility.
* With the aim of ensuring that “cost-based medicine” is`not allowed to masquerade as “evidence-based medicine,” the`AMA adopted new policy that asks the AMA to work with`state and specialty societies and other organizations`to educate the Centers for Medicare & Medicaid Services,`state legislatures and state Medicaid agencies about the appropriate use of evidence-based medicine, in addition to the dangers of making policies based on cost-based medicine inappropriately characterized as evidence-based.
* The AMA will encourage JCAHO to require that certain issues related to medical staff governance be delineated in medical staff bylaws, rather than in separate administrative documents. Among the issues the AMA will recommend for inclusion are application, reapplication, credentialing and privileging standards; fair hearing and appeal processes; and the structure of the medical staff organization.
* The AMA agreed to study both the responsibilities of the physician who allows a manufacturer’s representative to observe and provide technical support in patient treatment, as well as the manufacturer’s representative’s duties to the patient and physician.


Bernd Wollschlaeger,MD,FAAFP

HSAs In The News

Dear Friends and Colleagues:
Attached an interesting article from todays Wall Street Journal reviewing the obstacles regarding the implementation of Health Savings Accounts.
These are the facts:

* Only about 8-10 Million Americans are enrolled in Health Savings Accounts and that number increased among US workers only slightly, to 2.7 million in 2006 from 2.4 million in 2005.
* Few employers are focusing on the costly measures -- such as offering better coverage or more consumer education, and instead shifting healthcare costs to the employees.
* Where employees do have a choice, only 19% choose the newfangled plans, the Kaiser study estimates. In the Federal Employees Health Benefits Program, which has offered the plans for several years, only about 50,000 of its eight million members were enrolled in them in 2006. Guess, our elected officials prefer to use traditional plans ,whereas us common folk should swallow the bait.
* Employers are often HSAs as the cheapest and only insurance alternative forcing employees to use them, even though those plans are not suitable for them.40% of employees in a consumer-directed plan say it was the only choice available from their employer!!!

HSAs may be ONE solution among the many insurance options available for US consumers, but should not marketed as THE solution.
Personally, I would like our government to spend as much energy and money promoting existing and traditional solutions as they do with HSAs.
If cost shifting is the goal, then the common folk will loose.
Yours
Bernd



Health Savings Plans Start to Falter
Despite Employer Enthusiasm for Consumer-Directed Approach, Patients Express Dissatisfaction With How the Accounts Work
By VANESSA FUHRMANS
Wall Street Journal June 12, 2007; Page D1

President Bush and many big employers have hailed "consumer-directed" health plans and savings accounts as an effective weapon in the battle against runaway medical costs. But several years after the plans got off to a fast start, the approach appears to be stumbling -- largely because of consumers' unease in using them.

Eight million to 10 million Americans are enrolled in consumer-directed plans, which involve a high-deductible insurance policy that can be combined with a savings account to help pay for out-of-pocket health costs. The plans, which have lower premiums but shift more of the responsibility for health-care spending onto consumers, got a big boost in late 2003 after Congress created portable health-savings accounts that participants can use to sock away pretax dollars and let them grow tax-free. Employers often put money in the accounts to subsidize the higher deductibles.
SPEED BUMP

[Speed Bump]
Enrollment in consumer-driven health plans
• Number of U.S. workers (excluding dependents) enrolled in such plans through work was 2.7 million in 2006, vs. 2.4 million in 2005.

• 40% of employees in a consumer-directed plan say it was the only choice available from their employer.

• Where employees have a choice of health-plan options, only 19% choose consumer-driven plans.

Source: The Kaiser Family Foundation

The plans are accomplishing some of what they intended: A raft of data show that people enrolled in the plans do tend to spend less on care than others. That is encouraging more employers to introduce such plans to their workers over the next two years.

But low enrollment and low satisfaction among workers who are offered them raise the question of whether consumer-directed plans will stall before they ever hit the mainstream. Few employers are focusing on the costly measures -- such as offering better coverage or more consumer education -- that may be needed to accelerate these plans.

The numbers of U.S. workers enrolled in such plans through their jobs (excluding dependents and those in firms with fewer than three workers) grew only slightly, to 2.7 million in 2006 from 2.4 million in 2005, according to the Kaiser Family Foundation. Most do it because either their companies give them no choice or the premiums are the cheapest. Enrollment is growing faster on the individual market and among sole proprietors, but that may be because the plans are often the only affordable option.

Where employees do have a choice, only 19% choose the newfangled plans, the Kaiser study estimates. In the Federal Employees Health Benefits Program, which has offered the plans for several years, only about 50,000 of its eight million members were enrolled in them in 2006, according to industry estimates. At lightbulb-maker Osram Sylvania, just 5% of employees enrolled in the plans in 2006, their first year.

In addition, those who are in consumer-directed health plans often report lower satisfaction and confusion about how the plans are supposed to work. The general idea is for patients to conserve money in their savings accounts, which are meant to pay for care until they reach their high insurance deductible. In theory, patients who shop carefully could have money left over, which they can keep and let build into savings for bigger health-care costs down the line.
[Consumer-Directed Plans]

In a survey published last month by Towers Perrin, an employee-benefits firm, employees enrolled in them said they felt less capable of finding a quality doctor or hospital, though they often were in the same network as colleagues in other plans. Only 29% said they tried to save money in their accounts for future medical expenses.

Though the consulting firm says consumer-directed plans have much potential, its executives were surprised consumer responses were so negative.

"If I were a product manager in any other industry and saw scores this low in customer satisfaction and understanding, I'd be thinking of pulling that product from the shelves or retooling it," says David Guilmette, managing director of Towers Perrin's health-care consulting practice.

One reason for the frustration is the uphill battle many consumers describe in trying to shop for their health care. Six years ago, Howard Katz, an industrial-design research consultant in rural eastern Pennsylvania, bought a family health plan with a savings account and a deductible that is now $5,650. But getting specific price information on which to base purchase decisions for MRIs, doctor visits and blood work has been difficult, he says.

And the money in the health savings account gets spent; only once has enough remained to roll over to the next year.

Now, he says, he has rejoined a company as an employee after working on his own, and one of the perks is regaining traditional health coverage. "Now I don't have to act like a medical examiner anymore," he says.

Proponents of consumer-directed plans point out that their overall enrollment continues to grow at a faster clip than enrollment in HMOs did when they were introduced in the 1970s. Among those who enroll, the vast majority stay in and don't switch back to another type of plan.

In cases where employers spend months informing workers about how the plans work and offer them more financial incentives than just cheaper premiums, workers report higher satisfaction and often get more preventive care than people in other plans. "But the vast majority of companies still do not have the time, effort or resources to prime the pump," says Larry Boress, president of the Midwest Business Group on Health, a coalition of large employers.

A growing number of industry experts believe that for consumer-directed plans to succeed, they have to offer coverage that is at least as rich as traditional plans. That means providing upfront coverage of most preventive services and treatments and a generous contribution to employees' accounts.

"If you're just trying to cost shift, and you only get 10% of your employees in, they are the youngest and healthiest, and you haven't accomplished anything in terms of health-care costs," says Bill Sharon, a senior vice president at Aon Consulting, the human-resources consulting arm of insurance broker Aon Corp.

Osram Sylvania introduced a consumer-directed health plan with a health savings account with premiums 15% to 20% cheaper than its traditional plans, but employees were responsible for the entire deductible. Just 5% of employees enrolled. In preparation for 2007, it introduced another similar plan alongside it, but with 100% preventive-care coverage and a $600 contribution into the health reimbursement account, and older generation of the health savings account.

"We'd heard concerns from employees that they weren't going to get the right care," says Julie Thibodeau, co-director of human resources at Osram Sylvania. This year enrollment between the two consumer-directed plans rose to 15%.

Aon has offered its own employees two consumer-directed options since 2002, with deductibles between $2,500 and $6,250. Nearly 20% of employees are enrolled in one, and the majority of them have money left to roll over from the $500 to $2,500 that Aon contributes to their account each year. Employee premiums are about 30% lower than in the more-traditional plans Aon offers, says John Reschke, Aon Corp.'s vice president of benefits. Considering that the coverage is at least as rich for most employees as in the traditional plans, "we should have a lot more people enrolled," he says. "But this is a different kind of insurance, and it can be scary at first until people understand."

Write to Vanessa Fuhrmans at vanessa.fuhrmans@wsj.com1

Doctors Go Online !

Dear Friends and Colleagues:
Attached an interesting article from todays New York Times.
The author makes a good point:
"Health care providers have been dreaming about electronic records for so long that the idea has begun to seem like vaporware, a never-to-be-realized fantasy similar to flying cars and jetpacks."
The question remains if his preference for WorldVista is really the solution for the problem. A one-size-fit-all product may not be the solution. But a cost-effective, customizable and scaleable solution could lower the threshold for those doctors who are still looking for a suitable product.
Look forward to your comments.
Yours
Bernd


New York Times
May 30, 2007
Op-Ed Contributor
Physician, Upgrade Thyself
By THOMAS GOETZ

SAN FRANCISCO

GO into almost any medical office, hospital or clinic in the United States and your records will still be handled the old-fashioned way — on paper. You can use a computer to pay your taxes, to program your TiVo or to read a message from your great-aunt, but your doctor has to practically level a forest just to examine your medical files. The cost, however, isn’t calculated in trees but in human lives: Electronic medical records would reduce the risk of medical errors and spare hospitals the expense of missing records and unnecessary treatment.

Health care providers have been dreaming about electronic records for so long that the idea has begun to seem like vaporware, a never-to-be-realized fantasy similar to flying cars and jetpacks. But there is already a clear software standard, an open-source system that’s low-cost, easy to use and readily available. It could be the key to the health care system we ought to have already.

The program, WorldVistA, is based on the Veterans Affairs Department’s electronic-records system, called VistA (short for Veterans Health Information Systems and Technology Architecture — and yes, they beat Bill Gates to the name). VistA stands as perhaps the greatest success story for government-developed information technology since the Internet itself.

Using the VistA record system, the veterans department has managed to improve nearly every benchmark of quality in health care. In a decade, the department increased its pneumonia vaccination rate among at-risk patients to 94 percent from only 29 percent. That translates into 6,000 saved lives and $40 million saved each year from fewer pneumonia hospitalizations. On a host of other benchmarks — beta blocker use, cancer screening, cholesterol screening and so on — the department outperforms the nation’s best care.

Thanks to VistA, costs per patient at the Veterans Health Administration system are 32 percent lower, using inflation-adjusted dollars, than they were a decade ago. Over the same period, the medical consumer price index has increased 50 percent for the country as a whole.

The patients are happy, too. For the past eight years, the Veterans Health Administration has outscored private-sector health care in the independent American Customer Satisfaction Index. And because VistA is government-developed software, we all own it — it’s in the public domain. But while the government will mail you a copy, it won’t help install it or maintain it. The Department of Veterans Affairs is, in fact, prohibited by law to stray from its mission to serve veterans.

So in 2002, a group of former Veterans Affairs programmers and open-source advocates formed WorldVistA. They set about making a version of VistA that was simple for health care providers to use, and the fruit of their effort is now ready for market. Like VistA, WorldVistA is robust and fast. In April, the software was approved by the Certification Commission for Healthcare Information Technology. The certification means that WorldVistA is ready for broad adoption.

The effort to promote WorldVistA is supported by a grant from the Centers for Medicare and Medicaid Services, the agency that sets the prices for Medicare and Medicaid payments. The agency wants to provide clinics and public hospitals, especially those that serve uninsured and underserved patients, with an inexpensive system for electronic medical records. The agency was also just getting tired of seeing another year go by without a significant increase in the adoption of digital records. Right now, only a quarter of office-based doctors use them.

The problem isn’t a lack of software. There are hundreds of companies hawking electronic-records systems. But they don’t come cheap. The average cost is about $33,000 per doctor, plus another $1,500 a month per doctor for maintenance, according to a study published in the policy journal Health Affairs. For a small clinic with one or two doctors, that price is usually out of reach. For major hospitals, installing a new system can quickly become a multimillion-dollar experiment.

WorldVistA, thanks to its public-domain origins, costs about one-tenth of what a proprietary system does for a license fee and a support contract. And like any good open-source project, it’s constantly improving. A community of programmers fixes glitches and adds features, just as is done for the open-source Firefox browser and the Linux operating system.

And WorldVistA can be scaled up or down. It can work for neighborhood clinics, small-town hospitals, hospital systems, or, well, the Department of Veterans Affairs. WorldVistA’s big promise is that it can become the nationwide standard for electronic medical records, the backbone of a national network of health care. Your medical records could be read instantly and understood (perhaps less instantly) by any provider, anywhere.

Want to see the best knee surgeon in the country? If he’s using WorldVistA, he can check out your online records at his house or office. If you switch jobs and move to a new insurance plan, you won’t need to build a new medical history and FedEx old records around. With your permission, your files will be accessible to your new providers instantly. In this way, electronic medical records generate better care and lower costs.

WorldVistA isn’t perfect. It isn’t as customizable as some proprietary systems, and its graphical interface isn’t as intuitive or as polished. Worse, its back-office functions — staffing and billing — aren’t all that strong. Major hospitals and health maintenance organizations in search of a Cadillac are free to spend the dollars to buy one.

But for the vast majority of health care providers, WorldVistA is what they’ve been waiting for: a low-cost, simple-to-use system that makes it easier to provide quality health care. If only it could upgrade the waiting-room magazines, too.

Thomas Goetz is the deputy editor of Wired magazine and author of the blog Epidemix.

Abortion Measure Fails

Attached an article from the Miami Herald reporting that the abortion measure introduced by Rep. Trey Traviesa, a Tampa Republican, died in the Senate.
The proposed measure would have made it more diffcult for women tto access family planning services.
Obviously, in the Senate cooler heads prevailed recognzing that women's right to choose should not be curtailed.
Bernd Wollschlaeger,MD


Posted on Sat, May. 05, 2007
Lawmakers can't reach a consensus on abortion bill

BY BREANNE GILPATRICK
No 24-hour wait periods. No preabortion sonograms. No court-appointed guardians for underaged girls trying to bypass the state's parental notification laws.
In fact, Florida won't see any abortion-law changes at all this year, after a controversial bill bounced back and forth between the state House and Senate in the final hours of session, dooming the proposal.

The legislative tennis match started when senators stripped the controversial proposal by Rep. Trey Traviesa, a Tampa Republican, of its controversial provisions.

Among them: a mandated 24-hour wait period and a sonogram before all abortions, with the requirement that doctors give women a chance to see the ultrasound scan.

But when the bill left the Senate and headed back to the House, it contained a list of criteria judges must consider when granting pregnant girls a waiver to Florida's parental-notification requirement.

In the House, Traviesa rejected the bare bones bill and sent it back to the Senate.

That's where the proposal died. The Senate ended the session without taking the bill up again.

The Senate compromise just wasn't acceptable for House supporters, Traviesa said.

''Do we take something small and call it something good?'' Traviesa asked. ``No, we don't.''

Politicians At The Bedside

Dear Friends and Colleagues:

Attached a troubling news item reporting how politicians are interfering in the physician-patient relationship. I know that within our organization and our society at large , women’s right to choose their reproductive life is being hotly debated.
Unfortunately, the US Supreme Court not only decided to uphold the “Partial Birth Abortion” ban, but also adopted the terminology of the Pro-Life movement calling doctors providing such services “abortion doctors” and described the procedure known as intact dilation and evacuation or dilation and extraction as "partial-birth abortion".
In a further blow to the physician-patient relationship the Florida House voted last week
to impose a 24-hour wait period and a sonogram before almost all abortions.
This decision not only encroaches on women’s reproductive rights, but also inserts the politician into the physician-patient relationship.
Most women I have provided pregnancy termination advice and counsel come to my office after days or deliberation and do not need rules and regulation imposed by paternalistic politicians.
As a physician and my patients advocate I protest such government intrusion into the practice of medicine and call upon organized medicine to speak up in defense of women’s reproductive rights.

Yours truly,

Bernd

===============================================================

Posted on Sat, Apr. 28, 2007
Abortion bill heads to Senate
BY BREANNE GILPATRICK
A controversial proposal requiring a 24-hour wait period and a sonogram before almost all abortions passed the state House of Representatives on Friday and is on its way to the Florida Senate.
The House voted 71-42 in favor of the provisions, after roughly two hours of contentious debate. Both proposals were added to a bill by Rep. Trey Traviesa, a Tampa Republican, that would require judges to appoint a guardian for underage girls who want an abortion and seek to get around the state's parental-notification law.
''On every other medical procedure there is time, time for those important two words: informed consent,'' Traviesa said. ``And anyone who seeks to deny a woman the ability to achieve informed consent is not advocating for the rights of women. They're advocating for an idea.''
Women who are victims of rape, incest, domestic violence or human trafficking would be exempt from the sonogram requirement.

SUPREME COURT BAN
The House vote comes nine days after the U.S. Supreme Court upheld a federal government ban on a particular kind of late-term abortion, a decision pro-choice activists have said would encourage some states to attempt to chip away at abortion rights.
Legislatures in Georgia and South Carolina are considering similar ultrasound requirements. One South Carolina proposal also would require women to view the scans.
The proposal faces rough going in the Senate, where the version by Sen. Ronda Storms, a Valrico Republican, addresses only the parental-notification changes. And senators from both parties have said they are opposed to expanding Storms' bill to encompass the new House provisions.
Gov. Charlie Crist said he is unsure what he thinks about the 24-hour wait period.
''That might concern me,'' Crist said Friday. ``I better look at it, though.''
Supporters say the ultrasound and 24-hour waiting period help women make better medical decisions. The state already requires sonograms before abortions in the second and third trimesters. The proposal would add that requirement for the first three months of pregnancy, when most abortions take place.
The bill also gives women the option not to view the scan.
''If you read this bill, it doesn't do anything to take a way a woman's right to choose,'' said Rep. Kevin Ambler, a Lutz Republican. ``What it does is put a thoughtful deliberative process in place.''
`WHAT AN OUTRAGE'
But opponents say anti-abortion advocates have hijacked the parental notification bill to add provisions designed to create more abortion hurdles that trivialize a woman's decision to have an abortion.
''This bill demeans me in a way I have never felt demeaned before,'' said Rep. Kelly Skidmore, a Boca Raton Democrat. ``It suggests that I would be so cavalier about the decision to terminate a pregnancy that I should go back home and think it over as if I was out shopping and passed by a clinic and decided to pop in for an abortion. What an outrage.''
Miami Herald staff writer Marc Caputo contributed to this report.

Stop Corporate Welfare Programs

Dear Friends and Colleagues:
Attached an interesting editorial from yesterdays New York Times focusing on the issue of government subsidies for health insurance companies offering Medicare Advantage plans.

What is the problem?
About a fifth of elderly Americans now belong to private Medicare Advantage plans, which — thanks to government subsidies — often charge less or offer more than traditional Medicare. The government pays private plans 12 percent more, on average, than the same services would cost in the traditional Medicare fee-for-service program. The private plans use some of this money to make themselves more attractive to beneficiaries — by reducing premiums or adding benefits not covered by basic Medicare — and siphon off the rest to add to profits and help cover the plans’ high administrative costs ( and boost their CEO salaries)

What are the results?

The biggest subsidies — averaging 19 percent above cost — go to private fee-for-service plans, which are the fastest-growing part of the Medicare Advantage program. Those companies receive $54 Billion over five years resulting in an average premium increase of $2 to pay for those subsidies.

"If private health plans are supposedly so great at delivering high-quality care while holding down costs, why does the government have to keep subsidizing them so lavishly to participate in the Medicare program?"

What Should Be Done?

* Eliminate the subsidies
* Offer traditional Medicare plans with lower premiums and less adminstrtaive overhead
* Force private companies to compete with traditional Medicare plans

The proponents of market based health care services often forget that more then 50% of each dollar spent spent for health care services is provided by the government NOT INCLUDED the tax subsidies for employer-based health insurance.
Instead of calling for market based health care (which even conservatives do not support) , we should hold our government accountable on how it spends our health care dollars and eliminate corporate welfare programs (i.e subsidies).
Yours

Bernd


====================================================================================

April 21, 2007
Editorial
The Medicare Privatization Scam

If private health plans are supposedly so great at delivering high-quality care while holding down costs, why does the government have to keep subsidizing them so lavishly to participate in the Medicare program?

About a fifth of elderly Americans now belong to private Medicare Advantage plans, which — thanks to government subsidies — often charge less or offer more than traditional Medicare. As Congress struggles to find savings that could offset the costs of other important health programs, it should take a long and hard look at those subsidies.

The authoritative Medicare Payment Advisory Commission estimates that the government pays private plans 12 percent more, on average, than the same services would cost in the traditional Medicare fee-for-service program. The private plans use some of this money to make themselves more attractive to beneficiaries — by reducing premiums or adding benefits not covered by basic Medicare — and siphon off the rest to add to profits and help cover the plans’ high administrative costs.

Although the insurance industry insists that the subsidies are much lower and are warranted by the benefits provided, Thomas Scully, who headed the Medicare program for the Bush administration until 2003, told reporters recently that the subsidies were too large and ought to be reduced by Congress.

The largest private enrollment is in health maintenance organizations, which typically deliver care a bit more cheaply than standard Medicare and should not need their 10 percent subsidies, on average, to compete. The biggest subsidies — averaging 19 percent above cost — go to private fee-for-service plans, which are the fastest-growing part of the Medicare Advantage program. Unlike the H.M.O.’s, which at least manage a patient’s care and bargain hard with doctors and hospitals, these plans ride on the coattails of standard Medicare, typically providing access to the same doctors and paying them at the same rates. Thanks to the big subsidies they get, such plans are often a good deal for beneficiaries, charging less for the same benefits or adding benefits without raising prices.

The main losers are the beneficiaries in the standard Medicare program, whose monthly premiums are roughly $2 higher to help pay for the subsidies, and the taxpayers who pick up part of the tab. The subsidies also erode the long-term solvency of Medicare, which needs to rein in costs, not increase them with handouts to insurance companies.

When the Democrats first won control of Congress, it seemed possible that they might eliminate the subsidies — saving some $54 billion over five years — to finance a $50 billion expansion of a health insurance program for low-income children. But the insurance industry has mounted a furious lobbying campaign to head off any cuts.

Congress ought to eliminate the subsidies completely unless it is willing to subsidize the same benefits — at enormous cost — for the far greater number of people enrolled in standard Medicare. It is time to level the playing field and force private plans to really compete with traditional Medicare.

Different Opinions On Medicare

Dear Friends and Colleagues:
Attached you find two articles highlighting two different opinions regarding the function, role and success of the Medicare program.
The first article by Paul Krugman is entitled "The Plot Against Medicare. In it he author correctly states that:

"The 2003 Medicare legislation created Part D, the drug benefit for seniors — but unlike the rest of Medicare, Part D isn’t provided directly by the government. Instead, you can get it only through a private drug plan, provided by an insurance company. At the same time, the bill sharply increased payments to Medicare Advantage plans, which also funnel Medicare funds through insurance companies. As a result, Medicare — originally a system in which the government paid people’s medical bills — is becoming, instead, a system in which the government pays the insurance industry to provide coverage. And a lot of the money never makes it to the people Medicare is supposed to help.....Meanwhile, those Medicare Advantage plans cost taxpayers 12 percent more per recipient than standard Medicare. In the next five years that subsidy will cost more than $50 billion — about what it would cost to provide all children in America with health insurance. Some of that $50 billion will be passed on to seniors in extra benefits, but a lot of it will go to overhead, marketing expenses and profits."

He concludes stating that

" Public opinion is strongly in favor of universal health care, and for good reason: fear of losing health insurance has become a constant anxiety of the middle class. Yet even as we talk about guaranteeing insurance to all, privatization is undermining Medicare — and people who should know better are aiding and abetting the process."

In the second article from the Wall Street Journal "The Competence Man" the author touts the leadership of the Dr. McClellan, the former CMS head, who was implementing the Medicare Part D program.

"His success, in particular with the drug benefit, rests in two broad ideas. The first was to design a program that immediately attracted a critical mass of private players to provide price and choice competition.
Dr. McClellan's other strategy -- and the flip side of the coin -- was to get seniors enrolled quickly. His team designed an Internet program that allowed seniors to punch in their information and examine the best plans. His agency reached out to local organizations -- church groups, community centers -- and enlisted their aid in explaining details."
According to the author private companies have flocked to offer a drug benefit, giving most seniors a choice of 50 innovative plans. The competitive jockeying has slashed prices from an expected $37-a-month premium to an average $22. The cost of Medicare Part D for taxpayers was 30% below expectations its first year -- unheard of in government. And Medicare Advantage, which allows seniors to choose between private insurers, has grown to encompass nearly one in five beneficiaries.

Even though I respect Dr.McClellan's efforts I consider Medicare Part D as the biggest mistake of the Bush administration.
Medicare is an example of a single-payer system serving the senior segment of our population. Its its not a "decrepit program" and outsourcing its services to private companies provides drug companies with mega-profits on the expense of US tax payers.
Who is going to pay the estimated $ 8 Trillion price tag for the Medicare Part D program? Our children and grand children!
By then Bush and Co. won't be around, our government will have to use its entire federal budget for the payment of a gigantic debt load created by inflated entitlement programs and we may have to ask ourselves: what did we do to stop it?


Yours


Bernd


=======================================================================================
New York Times, April 20, 2007 Op-Ed Columnist
The Plot Against Medicare
By PAUL KRUGMAN

The plot against Social Security failed: President Bush’s attempt to privatize the system crashed and burned when the public realized what he was up to. But the plot against Medicare is faring better: the stealth privatization embedded in the Medicare Modernization Act, which Congress literally passed in the dead of night back in 2003, is proceeding apace.

Worse yet, the forces behind privatization not only continue to have the G.O.P. in their pocket, but they have also been finding useful idiots within the newly powerful Democratic coalition. And it’s not just politicians with an eye on campaign contributions. There’s no nice way to say it: the N.A.A.C.P. and the League of United Latin American Citizens have become patsies for the insurance industry.

To appreciate what’s going on, you need to know what has been happening to Medicare in the last few years.

The 2003 Medicare legislation created Part D, the drug benefit for seniors — but unlike the rest of Medicare, Part D isn’t provided directly by the government. Instead, you can get it only through a private drug plan, provided by an insurance company. At the same time, the bill sharply increased payments to Medicare Advantage plans, which also funnel Medicare funds through insurance companies.

As a result, Medicare — originally a system in which the government paid people’s medical bills — is becoming, instead, a system in which the government pays the insurance industry to provide coverage. And a lot of the money never makes it to the people Medicare is supposed to help.

In the case of the drug benefit, the private drug plans add an extra, costly layer of bureaucracy. Worse yet, they have much less ability to bargain for lower drug prices than government programs like Medicaid and the Veterans Health Administration. Reasonable estimates suggest that if Congress had eliminated the middlemen, it could have created a much better drug plan — one without the notorious “doughnut hole,” the gap in coverage once your annual expenses exceed $2,400 per year — at no higher cost.

Meanwhile, those Medicare Advantage plans cost taxpayers 12 percent more per recipient than standard Medicare. In the next five years that subsidy will cost more than $50 billion — about what it would cost to provide all children in America with health insurance. Some of that $50 billion will be passed on to seniors in extra benefits, but a lot of it will go to overhead, marketing expenses and profits.

With the Democratic victory last fall, you might have expected these things to change. But the political news over the last few days has been grim.

First, the Senate failed to end debate on a bill — in effect, killing it — that would have allowed Medicare to negotiate over drug prices. The bill was too weak to have allowed Medicare to get large discounts. Still, it would at least have established the principle of using government bargaining power to get a better deal. But in spite of overwhelming public support for price negotiation, 42 senators, all Republicans, voted no on allowing the bill to go forward.

If we can’t even establish the principle of negotiation, a true repair of the damage done in 2003 — which would require having Medicare offer seniors the option of getting their drug coverage directly, without involving the insurance companies — seems politically far out of reach.

At the same time, attempts to rein in those Medicare Advantage payments seem to be running aground. Everyone knew that reducing payments would be politically tough. What comes as a bitter surprise is the fact that minority advocacy groups are now part of the problem, with both the N.A.A.C.P. and the League of United Latin American Citizens sending letters to Congressional leaders opposing plans to scale back the subsidy.

What seems to have happened is that both groups have been taken in by insurance industry disinformation, which falsely claims that minorities benefit disproportionately from this subsidy. It’s a claim that has been thoroughly debunked in a study by the Center on Budget and Policy Priorities — but apparently the truth isn’t getting through.

Public opinion is strongly in favor of universal health care, and for good reason: fear of losing health insurance has become a constant anxiety of the middle class. Yet even as we talk about guaranteeing insurance to all, privatization is undermining Medicare — and people who should know better are aiding and abetting the process.


=======================================================================================
Competence Man, April 20th, 2007 Wall Street Journal

Republicans won a big victory this week, shooting down a Democratic plan for more government-run health care. The GOP victors, and free-marketeers, might send their thank-you notes to Dr. Mark McClellan.

Dr. McClellan is the 43-year-old internist who, until recently, held the thankless job of running Medicare. He was handed the further thankless task of designing and implementing Congress's tepid 2003 Medicare reform. And he's the big brain who then wrung every last ounce out of that authority to create a striking new model for Medicare competition that is today not only performing beyond expectations, but is changing the political health-care debate.

High praise, yes, but borne out by this week's GOP defeat of a bill to allow the government to fix Medicare drug prices. That was a top Democratic promise this last election, as the party sought to play off public anger over health-care costs. Liberals saw it as an important step toward their all-government, health-care nirvana. Nancy Pelosi and Harry Reid also felt this was an issue on which they could once again roll Republicans, by flashing the impoverished-senior-citizens card.

Instead, Dr. McClellan's new model came online and wowed the older class. Private companies have flocked to offer a drug benefit, giving most seniors a choice of 50 innovative plans. The competitive jockeying has slashed prices from an expected $37-a-month premium to an average $22. The cost of Medicare Part D for taxpayers was 30% below expectations its first year -- unheard of in government. And Medicare Advantage, which allows seniors to choose between private insurers, has grown to encompass nearly one in five beneficiaries.

This success has rebutted Democratic criticisms of the drug benefit and shown up those who tar the Bush administration as incompetent. The program's success emboldened Republicans to vote for free-market health care this week. Democrats have seen flagging public support for their program of more government and fewer drugs. While Mr. Reid held his caucus together this week, some are worried about bashing a drug benefit that has an 80% senior approval rating. "Congress only wishes it had an 80% approval rating," chuckles former Democratic Sen. John Breaux, an author of the 2003 reform. "A lot of folks campaigned last year on 'We're going to fix this program,' only to be told by seniors, 'Wait a minute, it ain't broke.'"

None of this was inevitable, but goes back to the competent Dr. McClellan. President Bush came to town pushing Medicare reform, and had a shot at an historic overhaul. The GOP could offer the carrot of a new drug benefit, in return for opening the entire decrepit program to private competition. Instead, Bush and Co. became more interested in claiming credit for an $8 trillion entitlement, and settled for meager reform.

Dr. McClellan nonetheless took this pared-down opportunity and used it to show private competition can work. His success, in particular with the drug benefit, rests in two broad ideas. The first was to design a program that immediately attracted a critical mass of private players to provide price and choice competition. At the time, nobody thought that possible. Mr. Breaux remembers Congress worrying that so few private players would participate that whole areas of the country would lack private drug plans.

Dr. McClellan's solution was a program that gave companies maximum freedom to design plans, bundle drugs and turn a profit. He was a salesman, talking up the opportunities and even traveling to New York to reassure Wall Street. It worked, and by the first days of business most seniors were being courted by anywhere from 11 to 23 plan sponsors. Those numbers have only grown, creating so much competition that sponsors are eliminating deductibles, lowering premiums, offering more drugs. It's also led to smart cost-cutting and efficiencies; an estimated 60% of Medicare prescriptions are now for generics.

Dr. McClellan's other strategy -- and the flip side of the coin -- was to get seniors enrolled quickly. His team designed an Internet program that allowed seniors to punch in their information and examine the best plans. His agency reached out to local organizations -- church groups, community centers -- and enlisted their aid in explaining details. A call center at one point handled 400,000 plan questions a day. Today, some 90% of Medicare recipients are enrolled in the benefit, numbers that have further attracted private players, further spurred competition, further lowered prices. "This is how you come in under budget, increase satisfaction," says the man himself, Dr. McClellan. He adds, humbly, "Nobody should think this is perfect yet, but it's clearly accomplishing some good things."

Good things or no, the reforms are still at risk. There was a time when Democrats believed in Medicare reform, but now most prefer it as a political stick to beat President Bush. There are also liberals -- Henry Waxman, Pete Stark -- who understand this is a crucial moment in the national debate over government-versus-private health care, and will do what they can to sabotage the reforms.

Expect, therefore, more votes over Medicare's right to price-fix. If a broad bill can't pass, liberal politicians will instead target individual, high-cost drugs, arguing that since Medicare foots most of the bill for these products, it should have the right to "negotiate." The real goal will be to get any foot in the price-setting door, making it harder for private companies to craft flexible drug packages, and laying the groundwork for more price-setting down the road.

Expect, too, a push to starve the competitive programs of cash. Critics know how effective this is, having siphoned dollars out of the old Medicare Advantage program in the 1990s, causing private plans to drop out, and giving the program a bad name. Dr. McClellan's reforms, and a Republican Congress, have re-energized the program, but the key to future success is in the budget. Republicans would do well to spend more time touting the competition successes of the reform, rather than the drug giveaway.

In a perfect world, the Bush administration would never have swallowed that entitlement in the first place. In our imperfect world, it at least had the wisdom to hand the reform challenge to a guy who was able to demonstrate the merits of health-care competition, and optimistically, pave the way for broader reform down the road.

Write to kim@wsj.com1.

Florida Health Information Network

Dear Friends and Colleagues:
Just returned from Israel where I gave a presentation at an international conference in Jerusalem (Israel Medicine Association-World Fellowship Conference) about the implementation of electronic health records in medical practice. The paper was well received and doctors present were especially interested in the SFHII (South Florida health Information Initiative) project. As a result I was invited to give the same presentation in Germany in November.
Reviewing the stack of Miami Herald editions I found an interesting article (April 13, 2007) highlighting the issue of a statewide health information network.
Of course, financing and privacy issues remain major obstacles that need to be addressed
Organized medicine should head the struggle for the widespread adoption of electronic health records and the connectivity of such systems for the benefit of our patients, to improve the efficacy and safety of medical care.
Yours
Bernd
;-)


Posted on Fri, Apr. 13, 2007
Lawmakers consider statewide medical database
BY MONICA HATCHER
The healthcare industry is usually among the first to adopt cutting-edge technology to improve the practice of medicine. But when it comes to keeping and sharing patient information, it's often accused of being stuck in the age when leeches were considered state of the art.

More than 80 percent of doctors still rely on handwritten records and manila folders to organize and track patient histories, according to National Center for Health Statistics.

Florida lawmakers are now considering several bills that would create a healthcare information network, where physicians could access a statewide Internet database of medical records. Despite concerns over expense and privacy, advocates -- including the Florida Medical Association -- say electronic records promise greater patient safety, more efficiency and reduced healthcare costs for consumers.

''Banking is moving forward, business is moving forward, government is moving into the information age, but the medical care is staying stagnant,'' said Rep. Denise Grimsley, R Lake Placid, who is co-sponsoring HB 1121, which will likely come up for a final vote in the full house next week.

Similar Senate measures are pending scheduling. Grimsley's bill builds on a two-year initiative to create regional online medical record databases around the state, including one in Miami-Dade County.

PILOT PROGRAM

The South Florida Health Information Initiative launched a pilot system in October linking Mercy Hospital with nine clinics affiliated with the Health Choice Network. Through a Web-based portal, physicians can access and update an individual's health information at ''the point of care,'' or when they are face to face with a patient.

Several hospitals in South Florida already use electronic record systems internally, but other doctors and hospitals can't get to them.

Carladenise Edwards, executive director for SFHII, said her program is designed to eventually become the main regional gateway that allows local systems to talk to each other.

''Our ultimate goal is to improve the quality of healthcare by maximizing the use of technology,'' Edwards said.

COST THEORIES

Advocates believe the lack of access to information is one reason for duplicate and unnecessary treatments that drive up costs. Mailing or faxing paper records wastes time and opens the door to errors because of illegible handwriting.

In addition, an electronic system would take the guesswork out of treating patients who end up incoherent in an emergency room.

The Helen Bentley Health Center in Coconut Grove is one participant in the pilot program. Medical director Anthony Stanley said he's glad he no longer needs to call nurses and technicians in his office for help deciphering patient records penned by other doctors.

''This is going to expedite better patient care, minimize patient care,'' Stanley said.

Not all in the medical field are on board, however.

Edwards said recruiting participants to the pilot program is an ongoing struggle. Many are reluctant to adopt the technology largely because of the cost of buying software and hardware, she said. Others have cited concerns for patient privacy.

``It's a very political process. Some of them are anxious to be involved. Others are sitting back and waiting for it to be mandated.''

In the last two years, the Agency for Health Care Administration has given $3.5 million in grants to regional health organizations for network development and training. Grimsley's bill would provide for about $25 million to build the state network over the next three years.

PAST LEGISLATION

Financial restraints led to the rejection of similar measures last year. Debate over whether it was the government's role and not the private sector's to build the statewide system also stymied legislation.

The bills have moved farther and swifter this session, but in a tight economic environment, getting funding could again prove a significant hurdle.

''Electronic records -- electronic anything, is very expensive,'' said Linda Renn, a lobbyist with the Florida Health Information Management Association. ``I wouldn't say it's pie in the sky, but [bill supporters] are going to have to explain why this is important.''

Health Care Reform Now

Dear Friends and Colleagues:
I hope that you have spent a relaxing Eastern and Passover Holiday.
Attached you find an interesting article from the Wall Street Journal entitled “Perverse Incentives in Health Care.”
The author claims that in health care delivery mediocrity is the rule and excellence, where it exists, is distributed randomly. There is no systematic reward for excellence and no penalty for mediocrity. As a result, excellence tends to be the result of the energy and enthusiasm of a few individuals, who usually receive no financial reward for their efforts.
Due to the fixed price-system (i.e. third-party payors) high-quality, low-cost care is not financially rewarding. Hospitals and doctors can make more money providing inefficient, mediocre care(i.,e, volume based care)
The author correctly states that in health care, contracts and prices are imposed by large impersonal bureaucracies. The individual physician has virtually no opportunity to offer a different bundle of services for a different price. As a result, very little entrepreneurship is possible.
Bottom line: When doctors and hospitals do not compete on the basis of price, they do not compete at all.
Where third-party payment is the norm, markets tend to be bureaucratic and stifling. But in those health-care sectors where third-party payment is rare or nonexistent, the market is vibrant, entrepreneurial and competitive.
I agree with the authors observation that many believe (including our AMA) that health savings accounts (HSAs) will radically reform the health-care system. Yet this is also a reform that focuses on demand, not supply. Even with an HSA plan in hand as you approach the doctor's office, you should know that your insurer has already spelled out what services will be paid for, which ones will not and how much will be paid. HSAs, therefore, will not free doctors to take advantage of telephone, email, computerized records or any other truly innovative service. Like school vouchers, HSAs create new freedom on the buyer side without loosening the shackles on those who produce. The reform is commendable. But real innovation must come from the supply side of the market.
Why are our patients flogging to in-store clinics, traveling to Thailand for surgery or are buying prescriptions from Canada? Because they seek the best price for the care they need. Our health care system is not market based, but controlled by bureaucrats and legislators
Meanwhile, organized medicine is still battling every year to avoid further Medicare cuts instead focusing on comprehensive health care reform.
Our health care system is on life-support and we are still afraid to pull the plug. If we don’t do it someone will do it for us.
Lets jump-start the market-oriented process, promote entrepreneurship, instead of stifling it.
Change has to happen NOW!!!

============================================================================

Perverse Incentives in Health Care
By JOHN C. GOODMAN
Wall Street Journal April 5, 2007; Page A13
Our public-school system and our health-care system may seem as different as night and day. Yet both systems share something in common: Mediocrity is the rule and excellence, where it exists, is distributed randomly.
In both cases the reason is the same. There is no systematic reward for excellence and no penalty for mediocrity. As a result, excellence tends to be the result of the energy and enthusiasm of a few individuals, who usually receive no financial reward for their efforts.
Research by John Wennberg and his colleagues at Dartmouth Medical School suggest that if everyone in America went to the Mayo Clinic, our annual health-care bill would be 25% lower (more than $500 billion!), and the average quality of care would improve. If everyone got care at Intermountain Healthcare in Salt Lake City, our health-care costs would be lowered by one-third.

Of course, not everyone can get treatment at Mayo or Intermountain. But why are these examples of efficient, high-quality care not being replicated all across the country? The answer is that high-quality, low-cost care is not financially rewarding. Indeed, the opposite is true. Hospitals and doctors can make more money providing inefficient, mediocre care.
In a normal market, entrepreneurs in search of profit would solve this problem by repackaging and repricing their services in order to make customer-pleasing adjustments. Yet in health care, contracts and prices are imposed by large impersonal bureaucracies. The individual physician has virtually no opportunity to offer a different bundle of services for a different price. As a result, very little entrepreneurship is possible.
Sometime in the early 20th century, lawyers, accountants and most other professionals discovered that the telephone was a useful instrument for communicating with clients. Yet even today, consultations with doctors by telephone are quite rare. Sometime in the late 20th century most other professionals discovered email. Yet only 21% of patients exchange email with their physicians; of these, slightly more than 2% do so on a frequent basis.
One would be hard-pressed to find a lawyer in the U.S. today who does not keep client records electronically. Ditto for accountants, architects, engineers and virtually every other profession. Yet although the computer is ubiquitous and studies show that electronic medical record systems have the capacity to improve quality and greatly reduce medical errors, no more than one in five physicians or one in four hospitals have such systems.
Why has the practice of medicine (as opposed to the science of medicine) changed so little in the modern era? The reason is because of the way we pay for medical care, particularly the way we pay doctors. At last count, there were about 7,500 specific tasks Medicare pays for. Telephone consultations are not among them. Nor are email consultations or electronic record keeping. What is true of Medicare is also true of Blue Cross and most employer plans.
Things are made worse by the fact that patients do not usually pay for health care with money; they typically pay with their time instead. As in Canada and most other developed countries, health care in the U.S. is mainly rationed by waiting, not by price.
When the doctor's time is rationed by waiting, the primary care physician's practice is usually fully booked, unless the practice is new or located in a rural area. As a result, there is very little incentive to compete for patients the way other professionals compete for clients. Because time -- not money -- is the currency we use to pay for care, the physician does not benefit very much from patient-pleasing improvements and is not harmed very much by an increase in patient irritations. Bottom line: When doctors and hospitals do not compete on the basis of price, they do not compete at all.
Where third-party payment is the norm, markets tend to be bureaucratic and stifling. But in those health-care sectors where third-party payment is rare or nonexistent, the market is vibrant, entrepreneurial and competitive.
Take cosmetic and Lasik surgery, for example. In both markets, patients pay with their own money. They also have no trouble finding what is virtually impossible to find for other types of surgery -- a package price covering all aspects of the procedure. People can compare prices, and in some cases quality. Providers are competing on price and quality and competition pays off. Over the past decade and a half, the number of cosmetic procedures grew sixfold along with numerous technological innovations of the type that are blamed for rising costs everywhere else in health care. Yet despite tremendous growth and technological change, the real price of cosmetic surgery declined. Over the past decade the real price of Lasik surgery fell by 30%.
The market for prescription drugs is another area where a great many people are paying out of pocket. In response, Rx.com was the first online outlet that began competing based on price and quality (they make fewer mistakes than local pharmacies). Wal-Mart's new policy of offering a month's supply of generic drugs is yet another example. Can anybody imagine Wal-Mart offering the same deal to Blue Cross?
Perhaps the most spectacular instance of a health-care product developing outside the third-party payment system is the walk-in clinic. These can be found in shopping malls and drug stores in the upper Midwest and they are spreading like wildfire around the country. They post prices. There is very little waiting. They maintain records electronically. The quality of service is comparable to traditional primary care at half the cost.
I know what you're probably thinking. Markets may work for certain specialized services; but can they work for run-of-the-mill hospital surgery? Medical tourism is proving that the answer is yes. If you're willing to leave the country you too can have access to efficient, high-quality health care. In India, Thailand and elsewhere around the world, facilities are offering U.S. citizens virtually every kind of procedure for package prices, covering all the costs of treatment, and sometimes airfare and lodging as well. These prices are often one-fifth to one-third the cost in the U.S. and care is often delivered in high-quality facilities that have electronic medical records and meet American accreditation standards.
One part of our health-care system (the part where third parties are absent) is teeming and bristling with entrepreneurship and innovation. In the other part (where third parties pay the bills), entrepreneurship has been all but extinguished. How can we make the latter more like the former?
Public and private efforts to reform the health-care system have been actively underway for the past two decades. The results have been disappointing, to say the least, and they all have one thing in common: They focus on the demand side of the medical marketplace.
Managed care, practice guidelines, pay-for-performance -- each of these short-lived fads involves buyers of care telling the providers how to practice medicine. Does no one notice how strange this is? In normal markets, buyers do not instruct sellers on how to efficiently produce their products. Even the HMO movement is a demand-side reform in this context. The HMO doctor is just as trapped as the fee-for-service physician and just as unable to rebundle and reprice his services in innovative ways.
Some believe that health savings accounts (HSAs) will radically reform the health-care system. Yet this is also a reform that focuses on demand, not supply. Even with an HSA plan in hand as you approach the doctor's office, you should know that your insurer has already spelled out what services will be paid for, which ones will not and how much will be paid. HSAs, therefore, will not free doctors to take advantage of telephone, email, computerized records or any other truly innovative service. Like school vouchers, HSAs create new freedom on the buyer side without loosening the shackles on those who produce. The reform is commendable. But real innovation must come from the supply side of the market.
One would think that health insurers and employers would find it in their self interest to break the mold. To the extent that entrepreneurs raise quality and lower price, the insurance product itself should become more attractive to potential customers. The trouble is that the entire third-party payment system is completely dominated by government (principally through Medicare and Medicaid). Private insurers tend to pay the way the government pays and providers who break Medicare rules in order to better serve the patient risk being barred from the entire Medicare program.
A possible way out of this morass is to start with government. Under the current system, Medicare and Medicaid stifle entrepreneurial activity and financially punish efforts to lower costs or improve quality. Why can't these agencies reward improvements instead? Suppose an entrepreneur offered to replicate the Mayo Clinic in other parts of the country -- potentially saving Medicare 25% of costs and improving quality of care along the way. Medicare should be willing to pay, say, 12.5% more than its standard rates in order to achieve twice that amount in lower total costs. That would leave the entrepreneur with a 12.5% profit -- an amount that one would hope would encourage other entrepreneurs to enter the market with even better ideas.
Once government agencies jump-start the entrepreneurial process in this way, private insurers are likely to follow suit. In this way, government could promote entrepreneurship, instead of stifling it.
Mr. Goodman is president of the National Center for Policy Analysis.