Dr. Noseworthy and the AHCA

The CEO of the Mayo Clinic, Dr. Noseworthy, was last heard recommending patients fire their physicians suffering from burnout. While he does not have truckloads of compassion or empathy for colleagues; he is, at least, honest. Dr. Noseworthy recently confessed “We’re asking…if the patient has commercial insurance, or they’re Medicaid or Medicare patients and they’re equal that we prioritize the commercial insured patients enough so… We can be financially strong at the end of the year to continue to advance our mission.” The ‘ailing’ nonprofit generated a paltry $475 million last year.

During his speech, Noseworthy noted the “tipping point” was the recent 3.7% surge in Medicaid patients as a direct result of ACA Medicaid expansion. “If we don’t grow the commercially insured patients, we won’t have income at the end of the year to pay our staff, pay the pensions, and so on,” he said. These are difficult decisions to make by rationing access to healthcare for the poor. It is a moral dilemma those of us in independent practices have been facing for some time.

Mayo will continue taking all patients, regardless of pay or source, and this policy exempts those seeking emergency care.

This move is attempting to shift payer mix and mitigate the financial pressure faced by many health systems as a result of federal health-care reform. Approximately 50% of patients at Mayo Clinic are Medicare or Medicaid. Higher reimbursements for privately insured patients makes up for losses incurred treating Medicare and Medicaid patients. Mayo says these payers reimburse at about 50-85% when compared to commercial insurance. It is about the same in my office.

While ACA Medicaid expansion brought the reality of healthcare coverage to millions; it left behind the practicality of providing access to healthcare for those same millions. As a direct result of the ACA, demand for physicians now overwhelms supply, due to increased closure of independent practices from incentivizing hospital consolidation. Physicians are not mean or spiteful, but we have families to feed, mortgages to pay, office rent, employee salaries, malpractice insurance premiums, and last but not least, student loans payments hanging over our heads. If my office closes, access further declines.

Throwing millions of additional patients onto Medicaid worsened the quality of care for those who were already on the program pre-ACA. Four years ago, my payer mix was 50% Medicaid and while never flush with cash, I was able to survive. Post-ACA, the payer mix must shift to 75% commercial and no more than 25% can be Medicaid in order to mitigate financial pressures. I have been closed to new Medicaid patients for more than a year with more than 70 families on the wait list.

Prior to The ACA, America rationed costs by not covering a portion of the population for preventive services yet mandating provision of emergency care (EMTALA) to everyone in spite of operating at a financial loss. Our post-ACA healthcare model still rations care by a variety of mechanisms: price, (copays, deductibles, premiums), capacity (physician shortages, advent of independent midlevel providers, certificate of need for facilities), and utilization management limitations (prior authorizations, referrals.)

Healthcare has remained a beautiful construct yet dysfunctional machine. Pricing measures reward error, inefficiency, and poor outcomes, private and public sectors continue to have a love/hate relationship regarding unbalanced cost shifting, and ultimately, attempts to regulate this catastrophic system by the government will lead to worsened outcomes for the poor across the board.

The American Health Care Act (AHCA) is not perfect, but it is pragmatic. Limited by the budget reconciliation rules to fast-track for Senate consideration, it was designed to attain 218 votes in the house and 51 votes in the Senate, which will generate cheers as well as jeers on both sides of the aisle. The bill is an important first step toward compromise and away from the disastrous ACA.

The AHCA would significantly expand health savings accounts, allowing patients to control more of their own health-care dollars, and give those who buy coverage on their own considerably more choice in the kinds of plans they buy. This change alone will allow lowering of premiums. Its refundable tax credit will be available to low- to moderate-income individuals and will equalize the tax treatment of employer and individual insurance.

The bill would transform Medicaid into a more streamlined insurance program: moving decision-making to the states, permitting them flexibility in dealing with preexisting conditions, provide reinsurance, and trust state insurance regulators to run their markets. In my opinion, not providing enough assistance to the poor and elderly is a fly in the ointment, however this can be adjusted in the next round, making premiums more affordable for the poor.

The AMA and the AHA oppose this plan; the importance of which must not be overlooked. These organizations do not represent practicing physicians and have very little interest in supporting the physician-patient relationship. It is very encouraging to me neither organization was able to garner much in the way of concessions on their behalf.

When the AMA and the AHA speak out against a bill, one must consider the AHCA as likely to be beneficial for both patients and physicians in the long run. Less than 15% of physicians today belong to the AMA and they pad their pockets by burdening practicing doctors with excessive regulations. The AMA receives $72 million from licensing the ICD-10 coding system, a restrictive noose around our necks which increases costs of running a practice.

The AHA states they will collectively lose $166 billion dollars if the ACA is repealed. It is worthwhile looking at who profited most from Medicaid expansion. Patients theoretically stood to benefit from improved coverage, but only when access was coupled with coverage, which it was not. Of the $3 trillion dollars spent on health care, hospital care accounted for 32% ($1 trillion), while one-fourth of those costs ($250 billion) accounts for salaries and benefits of hospital executives. The annual average hospital CEO salary is $600,000, while the average primary care physician makes $185,000 (for the record, I have never even come close to this amount.) Physicians receive only 8 cents of every healthcare dollar spent. Do any of those expenditures appear to be benefitting patients? Obviously, the answer is no.

The AHCA is a very good start, like 100 lawyers at the bottom of the ocean. It does not seem like much at first, however over time, it will make a positive difference. Anything is better than the ACA for patients, physicians, and our sacred physician-patient relationship. When you delve further into the details of the AHCA, you will find less coverage on the surface, yet more access for the people. It is time to take the power away from the AMA and the AHA and build a healthcare plan that is pragmatic; knowing there is no perfect and only compromise, but that is something of which we are in desperate need.

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128 replies »

  1. “but I think someone with 80k for 6 person household can afford to pay some healthcare costs, for example a $5 copay.”

    Hard for me to disagree right now. I do get frustrated at low income people having more babies, but am in favor of free birth control (not supported by the right generally) and some type of financial counseling/oversight of tax money spent by recipients. That oversight may be something state HHS does, I don’t know. I am going to check with my state HHS.

    The number of children could have been a result of better economic times, can’t say, as each case would be different. Good Catholics have as many children as they can.

  2. It’s so interesting. If you read my next post, Dr. Smith goes to Washington, commenters are saying congress members shouldn’t have to meet physician constituents unless we are same party or have donated $. No wonder healthcare is such a mess.

  3. I get that number from my patients who say “I must keep our income below x amount to have Medicaid coverage, so I can’t work.” It’s 50k for a family of 4. 65k family of 5, and 80k for family of 6. I’m not saying these numbers are inappropriate but I think someone with 80k for 6 person household can afford to pay some healthcare costs, for example a $5 copay.

  4. Yes Niran I know you’d make more money, what I asked is would it allow you to see more patients and cut the “rationing”?

  5. Niran, it seems Peter’s big thing in life is to place the blame on physicians. Physicians don’t pass legislation nor are they an enforcement agency, but he expects them to be the government’s eyes and ears. I don’t even think he understands our limitations involved in the release of information said at the bedside.

  6. Where are you getting that number from? My state of NC has a family of 4 with dependent children income limit of $744 per month.

    For infants and children family of 5 looks to be $5037 ages 0-5, and 6-18 $3190. But I’m not sure about how the mixed ages would work out.

    Pregnant women are different.

    “Your resources may not be more than $2,000 for an individual or $3,000 for a couple. The value of your home, a car, home furnishing, clothing and jewelry are not counted.

    Resources include:
    Bank accounts
    Retirement accounts
    Stocks and bonds
    Cash value of life insurance policies
    Other investments”

    Not sure how “rich” this makes Medicaid recipients. It aligns about with 138% of Federal Poverty levels. The $5037/mth for family of 5 seems high on the surface but 5 people with kids take a lot of resources. I’ve never had children, but you’ll know better.

    What income would you use to give Medicaid coverage?

  7. Yes. totally and completely. I would LOVE to receive Medicare rate of reimbursement,. It would help independent pediatric practices survive.

  8. Me too, Peter. I have reported especially when they commit insurance fraud ie have private insurance, yet hiding it and do not tell us while “using” the Medicaid only. Sometimes I am not aware they have private insurance and figure it out once medicaid figures it out, they take back all the money they paid us and then we cannot bill insurance. I have a policy that anyone caught lying about insurance is kicked out and cannot return to my practice.

  9. Peter, I am not certain they are committing fraud. The medicaid limit is quite high, above 65k in annual income depending on your family size. Regardless, they have more disposable income to spend than I do and that is again fine however no one is asking their subsidized care be taken, rather that they know the costs.

  10. You are nitpicking again. The k in know how was missing. Your use of the words “meaningful discussion”has a new meaning. It means you don’t understand the subject matter.

    Take a Valium Peter.

  11. “Your poorly worded sentence above should have been ‘do you now how to manage expansion?”

    Not sure what poorly worded “now how” means, is that an english term? Thought I’d better check since you choose to split hairs and avoid any meaningful discussion.

    Say goodnight Allan.

  12. Then you misunderstood what I said or you changed the context of the two words.

    “there is no program that managed expansion.”

    Do you know of a program that managed expansion appropriately? Your poorly worded sentence above should have been ‘do you now how to manage expansion?’ Your sentence made it look like a type of program such as managed Medicaid.

  13. Some of the clinics I have seen love those patients, so the problem isn’t solved at all. What you have done is incentivized dishonesty.

  14. “Is it a Peterism?”

    No, it’s a direct quote from you. You used the term, I expect you’d know what it is and how it could be applied to Medicaid expansion.

  15. “”I wouldn’t deal with patients that committed fraud and that is one reason I didn’t want to take Medicaid. I’ve had some try, but they were either stopped or released from my practice.”

    Solved without bureaucracy.

  16. I don’t believe “managed expansion” is something that is presently in use. It appears to be a made up phrase. Is it a Peterism?

  17. To answer your question, Yes. I have gotten thank you’s, but no follow up and no change. I dealt with these bureaucratic problems all over the spectrum including working on a committee censuring physicians. The answer is bureaucrats do not make waves. It is not in their interest.

    The government doesn’t seem intent upon rooting out fraud. See 60Billion dollars of Medicare fraud from 60 minutes 3 -5 years ago. That is the tip of the iceberg.

    “Well if there are not enough people to check these problems, that’s not socialism, that’s just bad management.”

    That is the nature of socialism and oversized bureaucracies.

    “Do you know what % in your practice are committing fraud?”

    I wouldn’t deal with patients that committed fraud and that is one reason I didn’t want to take Medicaid. I’ve had some try, but they were either stopped or released from my practice.

  18. That was not my question. You seem to have an idea what managed expansion would look like, would like to know as you seem to have studied this.

  19. “but from my experience these things aren’t pursued.”

    So you’ve reported fraud several times and the cases have not been pursued? Did you followup?

    “That is the problem with too much socialism. Eventually one runs out of other people’s money.”

    Well if there are not enough people to check these problems, that’s not socialism, that’s just bad management. I don’t know what the case load and resources are.

    Do you know what % in your practice are committing fraud?

  20. Peter, there is no program that managed expansion. The ACA just dumped people in a wastebasket.

  21. “Rates are just as low as they have always been, so rationing is the law of the land right now in our community.”

    If you were paid Medicare rates for Medicaid patients would that cut the “rationing”?

  22. Yes, Peter they are committing fraud, but from my experience these things aren’t pursued. It is very easy to stay under the radar and once on Medicaid and to manage finances in such a manner that the individual will remain on Medicaid even if they were investigated.

    I know one person that drives a brand new Lincoln SUV, lives in a relatively expensive home, eats out a lot, goes on cruises, and other vacations, yet remains on Medicaid.

    That is the problem with too much socialism. Eventually one runs out of other people’s money.

  23. “It doesn’t do much good for the poor very needy ill Medicaid patient by adding ?14 million more patients without expansion of the program”

    What would “expansion of the program” look like?

  24. “It is true I have many families on Medicaid who drive expensive cars, have large homes, the moms get to stay home (which I will admit I am totally jealous of), and they travel to Mexico and Disneyland each year.”

    Niran, if you suspect Medicaid fraud then you have a duty to report it. People who violate the income and asset limitations of their state are committing fraud.

    Here is what you can do:

  25. Actually, Peter, I have few families on ACA plans through the marketplace. Almost 90% of those who benefitted through signing up on the exchange are on Medicaid known as Apple Health. Rates are just as low as they have always been, so rationing is the law of the land right now in our community. I am not angry the ACA didn’t solve problems, I am frustrated with a system worse than before.

  26. Barry, it is probably due most to the poor payer mix and aging facility costs. I was born at the hospital that is closing. It is more than 50 years old. We are significantly underserved in my area and some will travel across the water by ferry to get better care. Micro hospitals could be an option but where to find the funds?

  27. Peter, technically, my husband earned our Tricare after 20 years of service to this country in the Army Special Forces. I have never said people should not get subsidized care, Peter. Many people need help, but not necessarily by handout approach. I absolutely believe a standardized way of looking at income etc should be applied and then providing coverage on a sliding scale. I pay plenty out of pocket using our family Tricare and that is fine. Some cannot afford that, they should have equal coverage. Many of my insured patients however do not have the equal level of coverage as Medicaid despite paying far more in costs. The middle is being squeezed out of existence.

  28. j, thank you for the support. It is true I have many families on Medicaid who drive expensive cars, have large homes, the moms get to stay home (which I will admit I am totally jealous of), and they travel to Mexico and Disneyland each year. I often wonder how they can be on Medicaid and still do all of those things. Then, on the other side, I have many Medicaid families struggling to make ends meet and I am so glad their children have a safety net. It is an intriguing idea to use the VA system to support the poor. It would provide the basic level of coverage I have always talked about.

  29. Peter, those Peterisms are flying out of your keyboard again. I’m from the right on the more libertarian side which means I tend to have some agreement with both sides of the isle except the Democrats of today which have gone bananas and would probably crucify JFK.

    I don’t know of many conservatives, if any, that wish to “take Medicaid away from the poor” or better said ‘care for the poor’, rather most are trying to see that the money is spent wisely and not just for show. It doesn’t do much good for the poor very needy ill Medicaid patient by adding ?14 million more patients without expansion of the program, but the left thinks it’s swell because the numbers look good even if the people are dying.

    The left loves abstractions but seems to hate reality.

  30. “You earned your Tricare, nothing to be ashamed about on that end..There are many bullies on the left that have not earned and just want to take.”

    J, I was not questioning whether Niran “earned” her Tricare or not, just the fact that she is getting subsidized care while seeming to want those in ACA not to get subsidized care. Where do you get your subsidized care? The working family at a minimum wage job – did they not earn a subsidized policy through the ACA?

    As for bullies on the left, it’s the right that wants to take Medicaid away from the poor and reduce those on ACA by 24 million +, while giving the “rich” yet another tax break. And I think defunding Planned Parenthood, which provides many health services to low income women, is the height of bullyness.

    Given the ever widening gap of rich and poor I’d say the bullies are winning.

    This whole administration is based on bully tactics.

  31. Dr. Al-Agba, I really enjoyed your article. I think you are spot on and I see the world from a different, insurance company person’s perspective. You earned your Tricare, nothing to be ashamed about on that end..There are many bullies on the left that have not earned and just want to take. I agree our current system is set up for the rich and the poor, all of us in the middle have to ham and egg it. Go to Urgent care, fill up our HSAs, etc.

    You can never control costs in healthcare because the current system forces to provide the same quality to all no matter how they got into the system. This is communistic and has failed every time its tried. My plan is to move all of our Veterans to the best blue cross plan money can buy and convert our current VA into a public health program for the poor and have it run along side of our independent private healthcare system.

    The private system would be 100% private with insurance and almost no government regulation and the public system would be for everyone else who can’t afford to work and can’t obtain private insurance. I would cap the admission on the public plan at about 5% of our total population. The public system may not be as good as the private one, but oh well, in America, you should be able to pay and get better. Not pay, and wait in line or not be able to see a doctor because they have 100’s of Medicaid patients to see.

    Believe it or not, there are a lot of people who scam the healthcare system subsidies and there are a lot of people on there who are not really ‘poor’. But if you can do it and get the same quality, why not? I know at least a few who have their kids on CHIP, who make plenty of money. Under the table. That’s the one thing the left never takes into account in their master entitlement plans. People will always look for others to pay for their health care first if they can. Those same people have great looking teeth because if Dental is not subsidized, they will pay for it themselves because it affects their looks. Maybe you can go back for a little school and become a dentist, most dentists do not have money problems.

  32. Niran, is the hospital that’s closing shutting down because of an unsustainably low occupancy rate, a poor payer mix (too much Medicaid and uncompensated care), an inadequate case mix or some combination of all three?

    It does seem that your area is significantly underserved in terms of hospital beds even before the closing. Are micro hospitals of 7-10 beds each an option, and if so, who would build and operate them?

  33. We are (mostly the left) creating a monster that we are afraid to deal with. Every attempt government makes to deal with this monster is something that attempts to mimic a free market endeavor, but they fail because these ideas are based upon top down control.

    Medications cannot cost more than people can afford. Pharmaceutical companies go bankrupt if their product is unaffordable. Look at the epi-pen. I have one for myself. The price was raised to $600+. The CEO who took a multimillion dollar salary increase had a father in Congress. Seldom is one person buying that api-pen. The insurer is actually paying for it and tags on a relatively small amount to each person in the pool to pay for that pen. My actual payment after Part D was around $74 so even I didn’t know there was a less expensive pen out there called Adrenaclick for I think $200. There are also syringes and epinephrine that costs almost nothing. We are being slowly boiled in water like the frog that doesn’t jump out.

  34. “I want to provide care to as many patients as I can and keep a roof over my head. The ACA is not doing that.”

    Well the ACA gave some of your patients a way to pay you above Medicaid rates or even charity care. That must help you and them.

    Your problems with finding affordable insurance/coverage is the same as everyone else. Your angry that the ACA didn’t solve all your problems, well so are a lot of people, but U.S. health care the 5 star hotel of the world.

    I’ve been through that as well and decided to go uninsured for a time with cash pay, no Tricare option for me.

  35. Allen, you know I just gave a talk about Medicare Part D and ways to cut costs. A physician who owns a DPC practice on the East Coast was talking about a patient on Medicare paying $900+/mo for meds. DPC’s get their meds from Andameds for wholesale and then dispense them directly to patients. The cost after switching to generics and after this patient signed up with the DPC doc, $35/mo. Unbelievable how much difference a physician could make, huh? 🙂

    You are right Big Pharma benefitted greatest from Medicare Part D in the long run.

  36. I didn’t switch, the plans for small businesses (which I am) ended. The company “got out of the small business market” entirely. I gave up trying to find another plan after searching for something and fell back on Tricare. I take care of my own kids and rarely need much in the way of medical care, so it was easier than fighting a system working against the self-employed.

    I am not really complaining about Tricare, it is the equivalent for us of catastrophic coverage, a little better. We rarely go through the individual deductible or family one either for that matter. Look, you can disagree with me, but at some point you should admit that I want to provide care to as many patients as I can and keep a roof over my head. The ACA is not doing that. Something needs to change. I do not have all the answers, but what we have is not working.

  37. We have two/soon to be one hospital that will serve 250K. The main hospital (soon to close) has 250 beds but just had a legionella problem with the water system. The “newer” hospital which is about to combine with the older one hence the monopoly has 94 beds, 24 of which are NICU. The helipad is finally located at the hospital now, when I first started practicing in town it was a mile away at the local mall parking lot. By my calculations, minus the NICU beds, we are at about 1.3 beds per 1,000 population. I guess that puts it in perspective huh? Almost every specialist has been bought by the hospital so choice is gone. Three left that are independent in town, including me.

  38. “has to reflect, at least to some extent, the values and culture of its society.”

    That is why it is foolish for anyone to say we are the only western nation that doesn’t have national health insurance.

  39. No, I’m not saying it’s a bad thing. Every country’s healthcare system has to reflect, at least to some extent, the values and culture of its society. Countries can learn from each other but just because the system in say, Sweden, works for them and the population is happy with it doesn’t mean it could be adopted here with similar results and satisfaction. At the same time, Germany copied Medicare’s DRG payment system for hospital based care after they had problems with their prior per diem approach.

  40. Niran, it seems like we have quite a lot of doctors around here but I don’t have any numbers. We also have five hospitals in the county one of which has a top notch trauma center and can do sophisticated procedures like open heart surgery. Even our local community hospital which is 1.5 miles from my home has a helipad in the rear of the parking lot. I think the total number of inpatient beds for the five hospitals combined is in the range of the national average which is a bit under 3 per 1,000 of population or roughly 1,800 beds total.

  41. Peter, the core of my practice was mostly middle to low income seniors that were among the sickest of the seniors and were on many medications. There were loads of medications that before Part D was passed that were very inexpensive and worked.

    I remember when Hillary, during the Clinton administration, talked about this poor woman who had to spend $10,000 (I think) on medication and let us know why. I could have treated that woman for about $500 certainly less than $1,000 worth of medication.

    Most of the newest medications I needed were offered for free or for $15 per month by the drug companies to poor patients. I gave other poor patients samples and tried to use medications that could be split.

    Some of my patients needed additional help but we didn’t have to have 75% of Part D subsidized by the taxpayer plus an additional ~10% subsidized elsewhere. I’m being subsidized and I don’t need it. I do, however, pay at a higher level for Part D. If we are using taxpayer funding, the funding should be carefully targeted and monitored. We do none of those things and impoverish poor working families. We will pay for this when those children grow up without being appropriately cared for by their parents.

    When Part D was being sold I nicknamed it the Merck Bailout Act. Merck was in trouble and without sufficient new meds in the pipeline. Part D created a floor and I believe preserved Merck’s pricing. It did nothing to the ceiling except incentivize higher pharmaceutical prices.

  42. “Americans just wouldn’t accept it.”

    Are you saying that is a bad thing? We don’t accept dictatorship either.

  43. Almost every doctor I dealt with has quit. I won’t say they retired because they had planned to retire a bit later. Adding up the number of physicians, the years of practice lost and the experience we can calculate the millions of dollars (maybe a lot more) wasted at a time that many feel there is a doctors shortage. These were the guys that used to see their patients in the ER (didn’t use hospitalists), worked until all the patients seen, worked seven days a week and were efficient.

  44. So why did you switch from individual to ACA? The ACA was not forced on you, you just needed coverage by somebody.

    Your description of premiums, co-pays, deductibles is what non subsidy ACA patients are complaining about. Yes, the cost of care in this country is outrageous, but why should we control system costs by always wanting to control the other guy’s access to care and subsidies?

    I have been looking up Tricare, it sounds like subsidized insurance, maybe like ACA, only better.

  45. Of course, this will be our future if we continue to move toward a universal system. The poor will either get lucky or not. Those who can afford it will go outside the public system into the private one. Personally, fewer complications the better my outcome…. I would go private in that system.

  46. Look, I had insurance in the individual market until the ACA went into effect. Tricare was secondary to that. It was about $900 for my family of 5 with a high deductible. I do actually know what I am talking about. Through AHCA If a family of 5 was receiving $10k in tax credit and they purchased a high deductible plan (hopefully costs would come down to $500/mo) then that leaves 4K in the HSA to use for expenses. If one wanted to contract with a DPC, at $150/mo per family (average most places in the US), then it costs $1800/year) for unlimited care visits. Done. Cheaper, Better. If they need catastrophic, then they use it, but 80% or more of chronic issues can be managed in a DPC practice. I am in no sanctuary. I am in a county which is slowly becoming a medical wasteland. People need physicians and they are not going to be here much longer.

  47. MACRA is legislation that basically wants to control how we practice, paying only for “value” which has never been studied to validate. It insists upon EHR usage and adds thousands of dollars to costs for my office which cannot afford the transition. It will be the last nail in the coffin for many independents if we are not exempted.

    The supply of NP’s is not great either. I have interviewed many of them and they want no less than 100K annually. I sometimes make that and sometimes don’t, so I cannot guarantee that amount to them. You are correct they are not a replacement, but in light of NO care, it would make sense. Some of the family docs can afford that, I can’t at this time. it is less of a burden if they are employed by a hospital, but again they charge facility fees to offset the cost and bring in enough revenue. I am forbidden from doing that.

    Yes, 250K sounds like a lot of people. It is about 600 square miles also, but it is poor and geographically isolated by water, so the more physicians we lose, the worse off the population. Currently, there are 8 orthopedists, 3 general surgeons, and 14 pediatricians. Interested in the numbers from your area as a comparison. Thanks.

  48. PartD was Bush’s deal with the drug companies to keep their prices, profits, and lobbying support, and attempt to help seniors busing to Canada for affordable drugs. I cancelled my membership to AARP when PartD past, they lobbied hard for it. Rep. Billy Tauzin made a million dollars in a lobbying job from it, you can see his smiling face and the check on the internet. But how would you have solved drug pricing in the “free market” so seniors could afford it?

    If you want the “free market” to control old age health care who could afford it? Tell me who? Young people in the individual market with no subsidy can’t afford it. If you want a comparison – what would a $100K life insurance policy cost to a 26 year old and a 65 year old?

    By the way, no one forces you to sign up for Medicare. You could just buy a private policy.

  49. And what do you think the individual market would cost you out side of Tricare? Because that’s what you’re trying to solve, what everyone is trying to solve, the cost of care/insurance in the individual market – too many are casting solutions from the sanctuary of their own subsidized plans.

  50. Barry, thanks for furthering our information about Australian healthcare. Lines are a big problem for socialist healthcare systems. Therefore when comparing the US to others one has to include the cost the socialist line.

    The grass always appears greener on the other side, but here in America the grass is about as green as it comes.

  51. My doctor friend who worked as a radiologist in both the United States and Australia didn’t find the public side very appetizing. He more or less indicated that the public side wasn’t something that most, if not all, on this blog, would accept. He also provided some interesting and dissappointing things about work in the public hospitals.

  52. I’ve met a lot of Australians on our cruise and land tour vacations over the years and we frequently talk about healthcare systems at dinner. About 20%-30% of the population buys the insurance that supplements Australian Medicare, the public system. The supplemental plan is an underwritten product and it isn’t cheap. However, one of its key benefits is access to a parallel system of private hospitals not accessible to those with Australian Medicare only unless they can pay out of pocket. The biggest benefit is much shorter wait times for non-life threatening tests and procedures.

    I met one woman who went to the public hospital and was told she needed her to have her gall bladder removed and they thought they could do it in about three weeks. NINE MONTHS LATER, she got a call to be at the hospital the following morning. By that time, complications had set in. When the issue is not immediately life threatening, people can be forced to wait quite a long time and suffer adverse consequences as a result.

  53. Yes, the statists have croweded out the funds necessary to run many public health departments. Barry will worry that a millionaire who does’t earn that much any longer might have to delve into his own pockets to pay for care that is being subsidized by others, but he doesn’t seem to have any concern for the public health departments that are supposed to prevent the spread of disease along with their other functions.

    These big spenders are more interested in collectivism than in getting the job done.

  54. “ Funding for high risk pools has to come from somewhere”

    OK, I’ll play the game. Let that funding come from the states (or counties) where it belongs.

    Let the states determine the amount of personal responsibility required of those in the high risk pool if that is the chosen vehicle to provide care. Let the states determine how that money should be raised.

    An alternative is to place high risk patients on Medicaid and let them pay a premium to Medicaid.

  55. Peter, it wasn’t my choice to pay for Medicare nor was it my choice to pay for Part D. In fact I advocated against Part D for similar reasons even though I might benefit. We are taking from Peter to pay Paul and Peter doesn’t have that much money. Unfortunately, those are the rules I must live under.

    You ask, “ what do you think a “free market” policy would cost” Emphasizing… “ if you could even get one.”. That is one of the basic problems of this senior welfare program. The socialists don’t believe in free markets so they made sure everyone above 65 would be on Medicare. That hasn’t worked out that well since costs can’t seem to be controlled.

    Do you want to work and get rid of Part D and modify Medicare? I’m game. It might cost me money, but I prefer to make sure the next generation isn’t saddled with your debts.

  56. Conservatives love to cite Singapore as an example of a country that embraces free market principles through their Medi-Save program which allows people to pay out of pocket for routine medical care inside the deductible. Singapore only spends about 5% of GDP on healthcare as well compared to almost 18% in the U.S.

    At the same time, it’s a tiny country, really a city-state. The Asian culture is also very different. They are more willing to respect and accept authority and put society or the system ahead of their own needs and wants. They are also far less litigious. Even Japan, a country of 127 million people and aging rapidly, only spends about 8% of GDP on healthcare and they live a long time too but we couldn’t replicate their system even if we wanted to. Americans just wouldn’t accept it.

  57. Niran, thanks for that response. I hope you get your wish on MACRA. I don’t really have much knowledge about MACRA except that there is widespread dissatisfaction among doctors and the rule, I’m told, runs to something like 962 pages. As a patient, I have little or no understanding of how it is supposed to help me if at all. It sounds like it’s doing more harm than good.

    Out of curiosity, how is the supply of NP’s in rural areas and is MACRA a burden for them too? I’m not saying they’re an adequate replacement for or alternative to good primary care doctors but to a patient in need, they’re better than no care at all.

    250K population is more than I would have thought from your description. My county of almost 600 square miles has approximately 600,000 people.

  58. So this is part of the crux, we must ration. Not every single person who wants a transplant or outrageous cancer drug will be able to get it. If they want it, it will have to be paid out-of-pocket. Australia does have a good two-tiered system and is likely the best kind of option for us to keep costs down.

  59. Again, I am in agreement with you that “a person’s health should not be controlled by the government.” As to the health department, yes, that used to be their mission. Ours (which I work closely with) no longer offers immunizations and does not have the funds to follow up the positive chlamydia screens we send off. Prevention is not affordable for the public health departments either. I do think they could have a role in preventive services which would be cost-effective if funded and that would leave me time to evaluate cases truly in need of the expertise for which I was trained.

  60. Peter, sometimes your sarcasm gets the better of me. Maybe you don’t understand Tricare, so I will try again. We have an individual and family deductible, then above that, we pay 20% out of pocket. No one in town (except for me and hospital) is contracted with them, so a recent ENT appointment cost me out-of-pocket about $200 to get my vocal cords scoped. That is fine and I paid the extra to avoid having to drive to a different area 1+ hour away to have specialty care after a waiting period.

    One of my children has a significant visual disability and intensive vision therapy was recommended. $8000 out-of-pocket up front for 1 year of treatment. My husband and I made the necessary sacrifices to pay for it. It made a tremendous difference academically for him, but the larger point is “those who can afford it, will opt out.” I stand by my statement. You can poke fun at the insurance I have, but Tricare says no to a lot of treatments that are medically reasonable. Medicaid says yes to almost everything with no % out of pocket and that is a system where costs will continue to rise.

  61. Barry, Medicaid has something like this to subsidize a “deductible” of sorts and it worked quite well. it was called a “spend down” and once patients reached a certain point, then the 100% coverage kicked in. I believe the ACA eliminated that entirely for Medicaid.

  62. Thank you Allan, you are absolutely correct. I will stay where I am and refuse to give up.

  63. Yes, Barry I did. I practice in my hometown. Before the pediatric floor was closed, I rounded in the hospital in which I was born. I suppose you are right that many physicians and their spouses prefer to live in urban areas because the pay is considerably higher and the “lifestyle” better. My area is interesting because it is geographically isolated and quite underserved. We serve 250K population, however there are not enough physicians to meet the growing demand.

    While increased pay would help with recruiting (I have been unsuccessfully looking for someone for 2 years), a clear path forward IS to ease the regulatory burden. I have been told CMS is going to exempt small practices from MACRA ultimately and that will be a considerable improvement. MACRA is a lot of the reason I began writing about my plight in the first place.

    The regulations imposed by the ACA had the negative consequence of leading to a significant number of private practices closing especially in rural or underserved areas and that is unfortunate. Those of us who have survived, now find ourselves with a line out the door. There are not enough physicians to go around and that is when things are going to get very interesting. If I move away, I leave my extended family, my true home, and a practice I love. As Allen commented below, my patients (3 dozen of whom are second generation) are left without a good doctor to take care of them and I just cannot do that until I am forced to do so by financial insolvency.

  64. High risk pools that work for people and how to pay for them will be determined by the political process if we decide to move in that direction. I will have exactly zero influence on the ultimate outcome of that debate so what I think is fair or unfair is irrelevant in the scheme of things. There is no one precise right answer to this question.

  65. Funding for high risk pools has to come from somewhere in addition to whatever the high risk individual or family can to pay in premiums. That somewhere can be a surcharge on insurance premiums outside the high risk pool, state level general tax revenues or federal tax revenues. Take your choice. You can’t have high risk pools that work for the people who need them without paying for them somehow. The history of high risk pools in this country is abysmal because nobody wants to pay for them.

  66. You are OK with high risk pools, but you aren’t OK if the funding for those high risk pools isn’t adequate, in your opinion, of course. You bounce around on this question all the time. You realize that some of your words sound totalitarian yet you wish to think of yourself as one that supports the constitutional democratic process in this Republic. It appears you can’t make a decision as to which Barry you want to be.

  67. Niran, did you grow up near where you practice today? My understanding is that most doctors coming out of medical school these days and their spouses prefer to live in more heavily populated urban and suburban areas for lifestyle reasons. They don’t want to live in a rural area even if they can make more money and have a lower cost of living, especially for housing. For new doctors who grew up in a rural area, liked it and want to practice there and raise their families there, that’s great but they’re in the minority.

    There are advantages and disadvantages to just about everything including living in a rural area. The upside is lower housing costs, more land and wide open spaces and knowing your neighbors. Among the downsides are access to healthcare is more spotty and simple things from supermarket shopping to getting to school require travel over longer distances. I don’t see a clear solution to the shortage of doctors in rural areas even if your regulatory burden is eased significantly.

  68. “Even Singapore”, what does that mean? Are you Chinese, Malay or Indian? The number of Singaporean citizens is a bit over 3Million. If you wish to use Singapore as an example then you should support healthcare being controlled by the states not the federal government.

    High deductibles forces people to think about what they are buying so they are better than first dollar coverage. I see you like catastrophic insurance, but that is a joke at $5-$10,000. If someone chose not to carry insurance the cause of the problem is that you wish to pay for their care. We always have Medicaid and we can have many people pay a lot more than $10,000 should that catastrophic event occur. Those same people buy cars and homes and even take their kids to Disney World.

    If we would let the free marketplace do its job prices would drastically fall and that would be beneficial to everyone.

  69. I think a good part of why healthcare costs are higher in the U.S. than elsewhere are cultural. We are a more litigious society than other countries are so we have more defensive medicine and we have more testing-intensive physician practice patterns. Second, we are probably much more aggressive in our treatment and practice patterns at the end of life. In the socialist countries with a solidarity culture, one of the tenets of that culture is that you don’t impose unreasonable costs and expectations upon your fellow citizens.

    I wouldn’t be surprised if our culture were similar to those in Western Europe, Canada and Australia in those two respects, our healthcare costs might be as much as 25% lower than they are today even with no changes in pricing per service, test, procedure and drug. That would still put our healthcare costs at 13.5% of GDP instead of just shy of 18% but that would be OK and it would probably be sustainable because our per capita GDP is higher so we can afford to spend somewhat more than other countries can.

  70. I said for the umpteenth time I’m OK with high risk pools so young healthy people can buy their cheap underwritten coverage if they want to. Most are unwilling to help pay for the high risk pools though and they don’t want to pay the high premiums that come with guaranteed issue either even if the age rating band is 5 to 1 which accurately reflects the difference in age-related actuarial risk as compared to the ACA’s 3 to 1 ceiling.

  71. Allan, I’m fine with high deductibles conceptually and I’ve always said I don’t think health insurance should pay for the equivalent of oil changes and tires or mowing the lawn. However, because of wide differences in income across the population, there are wide differences in the size of the deductible that people can afford.

    So, I think what we should do is target a catastrophic insurance plan with a high deductible as the minimum base plan that everyone should have. Let’s say, for sake of argument, that such a plan would have an individual deductible of $5K and $10K for a family and then 100% coverage beyond that. For lower income people, we could provide an additional subsidy that would, in effect, buy down their deductible to a level they can afford based on their income which would need to be rigorously verified. For high income people that want a higher deductible and can show that they have the resources to handle it, they should be able to choose a higher deductible in exchange for a lower premium.

    I don’t think people should be able to just choose to remain uninsured or buy a mini-med plan and then expect hospitals and other providers to provide care when they need it and can’t pay for it because they chose to not buy insurance when they could have.

    Even Singapore requires everyone to have a basic catastrophic plan which, as I understand it, is similar to a high deductible version of Medicare for all and is paid for with tax dollars. Their Medi-Save accounts that individual citizens have are funded by compulsory payroll deductions.

  72. Barry, you worked in the financial sector so that you know that competition brings costs in the direction of marginal profits. You also know that when the price is already at its lowest, competition causes companies to cut their own expenses.

    On the other hand you seem to like consolidation and a guaranteed fixed payment for things knowing that the former inhibits competition and the latter doesn’t help bring costs down.

    There is only one answer to your philosophy. Where healthcare is concerned you are an avowed collectivist.

    Your last comment is that people need health insurance, For the most part I agree because one wants to protect their assets and leverage their money so that they can pay for expensive things that they would never have enough money for. We agree that people need health insurance, but most don’t need pre paid medical care which is what you are talking about.

  73. Peter, if I read you correctly you are calling for Medicare balance billing that moves Medicare in the direction of a freer marketplace. We seem to have significant agreement. Maybe that could be used instead of a rise in physician salaries.

  74. Any high fixed cost business with extra capacity can choose to fill some of that capacity with discount pricing based on a contribution to profit above low marginal costs. They can’t and won’t use that pricing strategy across the board because they would promptly go broke when average cost is significantly above marginal cost..

    If you choose to treat an individual patient who is struggling financially for free or a nominal charge, that doesn’t mean you can do the same for your entire patient panel. At the same time, private charity is nowhere near up to the job of taking care of people who can’t pay for healthcare especially when they need expensive treatment.

    People need health insurance to cover the expensive stuff. Many can’t afford the premium even if they’re healthy so they need a subsidy to help them acquire health insurance. They don’t need filet minion or lobster. They do need insurance.

  75. “I paid for my Medicare and continue to pay today so why shouldn’t I use it?”

    Given that Medicare is one of the main drivers of the deficit over the long haul, you are getting a subsidy from other taxpayers. Your last few years of life will eat up all plus some of your Medicare taxes. You stand strong against other people getting tax subsidies for health care from the government and want government out of health care – seems a little hypocritical. Right now what you pay is $134 per month for basic, what do you think a “free market” policy would cost – if you could even get one.

    Do you also get Med PartD? More subsidies.

  76. Barry you are very egalitarian with other people’s money. I have a right to what I legally earned even though you wish to use force to take it from me and relatively poor people that are trying to feed their families. Your redistribution schemes don’t make things equal though it might protect your friends from losing their place at the golf club.

    How is Medicare working out for those young people with jobs? They are paying for something that likely will not exist in the same fashion when they reach senior status. At the same time you are all for charging those young working people more for their premiums to pay for those not yet on Medicare.

    You are a true Robin Hood. You rob from the young to give to the old where the older likely has more than the younger.

  77. First you say you paid for your Medicare so why shouldn’t you use it. At other times you say that I’m benefitting from Medicare subsidies that other people with fewer resources than I have help pay for which is unfair. Which is it? You can’t have it both ways.

    The deal that people rely on is that they pay into the Medicare system during their working years and they get heavily subsidized insurance after they turn 65 or two years after they qualify as disabled. I don’t think anyone rich, middle class or poor needs to apologize for having and using Medicare once they meet the eligibility criteria.

  78. Steve, can you prove their healthcare quality is as good as ours? You can’t because what you said isn’t true. No one argues that we have a problem with costs. Then again a lot of those problems with cost are due to government care.

    We earn more and spend more on a lot of things. Would you prefer that we spend less on healthcare and use those dollars to get drunk? You do realize that all these systems are evolving because they are not any more sustainable than our own. I hope you realize that a lot of these systems are quite different from one another and that the populations are different as well. Also recognize that there are disparities in care in these nations. Just compare the care of the Inuits to the rest of Cananda’s fine society.

    I hope you realize that many of these nations rely upon lines. Healthcare insurance only guarantees a place in line, not access to healthcare. Check out Great Britain as an easy example. Health insurance doesn’t
    = health care.

  79. Barry, you just nailed the difference between businesspeople and physicians. We went to school to become part of our community and keep its people healthy. We have a vested interest in human beings at our core. “Relocating for a better opportunity ” is not in my DNA. It is a flaw, I know. These people, in MY community deserve the best care and I enjoy providing it. Why does all the excessive regulation need to be part of it?

  80. 1) Going to get the MRI at the right time is part of a free marketplace. Right now we all ask for the filet mignon and lobster that have a limited supply. That keeps prices high. In a market system some will chose the chicken and others the pork which keep a ceiling on prices a lot lower.

    2) Your point is not well made. Televisions were a new idea and then there were improvements on that idea even while prices fell. The same with the MRI. The idea is not that new and improvements are being made all the time, yet prices continue to rise. Everyone is looking for the filet mignon knowing that someone else is paying the bill

    There is no country that presently demonstrates sustainable healthcare costs. All of these countries keep revising their plans as prices climb. We do understand how free marketplaces work and a free marketplace in healthcare doesn’t exclude help for those that need it. It provides a way for people to select what is really necessary and leave what isn’t. It provides a place where a person can be treated as a patient rather than as a number.

    Tell us how without providing much more resources to Medicaid the ACA helped the poorest and most needy by placing another ?14 million into the Medicaid system? Tell us how by raising premiums and deductibles it helped patients access medical care. Tell us why patients should be satisfied because the doctors they were told they could keep suddenly weren’t on their plans.

    Government care is very convenient for us. Large amounts of money were pumped into the system meaning higher incomes and guaranteed payments when people had insurance, so I guess I should be happy with such intervention. It just hasn’t been that good for all of America where costs skyrocket and middle class working people have trouble making ends meet.

  81. Peter, we haven’t really been given a choice, have we? I paid for my Medicare and continue to pay today so why shouldn’t I use it? I will wait for your explanation which will never come. However, at the same time I won’t entirely rely upon Medicare and pay out of pocket for what I think is best.

  82. Yes, Peter, your wife should be here. Do you really think that just scattering singular issues around is a way of solving problems? Problem solving starts with one’s core beliefs along with a way of promoting those beliefs into a plan.

  83. Let’s phrase it correctly. Other people are doing something different. They are providing health care of the same quality we are providing, and they are doing it for a lot less. Do I want to follow along blindly? No, but neither do I want to ignore whites going on elsewhere. Everywhere else in the world where you have first world medicine, it costs a lot less and they also have more government involvement. While correlation is not causation, when correlation is 100% you should pay attention.

    You keep proposing a model that has never worked in health care anywhere. In those same countries that have good and cheaper health care, they have adopted, for the most part, markets and made products cheaper. However, none of them have done that with health care. Just like none of our states where they vote for people who think markets are the answer have never tried to adopt market reforms. At some point, you have to think there are reasons for this. If nothing else, maybe we just don’t know how to make markets work for health care.


  84. 1) Self pay patients cannot always get lower costs. When they do, it is often because MRI centers have fixed costs. Doing that extra MRI at a lower cost wen you have an opening is free money for them, even if it at a lower cost.

    2) My point was that the MRI was completely new tech. It came after government became much more involved with medicine. Does it develop absent government involvement? We don’t know. Just like all of the other major advances since the 1960s. Government was involved in some way in many of them. Do we even have decent residency training to go along with the technical advances w/o Medicare helping to pay for training costs? I don’t know, but you want to posit some alternate world where these same things happen and are cheaper if government was absent and it was all free market based. You insist on this when there is no model, none, of market based health care being successful. Every country that has free market health care has sucky health care. (Of course I could be wrong. Please provide an example.)


  85. “will likely be provided by the government and those who can afford it, will opt out, like you and I.”

    LOL, Niran’s on Tricare and Allan’s on Medicare.

  86. As usual Allan you skirt around direct questions and change the focus through meaningless comments.

  87. Barry, you write, “I’m perfectly fine with high risk pools that actually work for the people… ”, but you are not fine if the results aren’t what you want. That is a totalitarian mindset. You are willing to forcibly take from people that are not willing to do your bidding.

    This aggressiveness on your part is because you falsely believe “voters don’t want to square the circle by agreeing to pay more in taxes” It is not a matter of paying as much as it how much and how much to whom. Americans are very generous, but have a belief that you can’t impoverish another to maintain a sick person’s standard of living that may be higher than those that are being forced to pay for sustaining that individual’s life style. You also fool yourself with the details thinking you are providing something better when you are not. Your policies are in part responsible for the high costs we face while you close your eyes to the devastation you create for many people.

  88. I’m perfectly fine with high risk pools that actually work for the people who need them and taxing the nation as a whole to pay for them. The problem is that the nation as a whole is not willing to pay the taxes that it would take to pay for them.

    At the same time, you can’t have guaranteed issue without a mandate to purchase insurance or people will just wait until they get sick to buy insurance which is the very definition of a death spiral. It doesn’t work.

    You say give the sick Medicaid or maybe high risk pools and let the healthy buy insurance at a premium that accurately reflects their own personal health risk. You also say we can provide subsidies outside of the marketplace to help those who don’t earn enough income to afford insurance. Well fine. Raise taxes enough to pay for Medicaid, the high risk pools and the subsidies. You can’t and the votes just aren’t there in Congress or at the state level either because voters don’t want to square the circle by agreeing to pay more in taxes to cover the cost of the help for the people who need help..

  89. Peter, your reply is “ My wife has been an RN for about 35+ years,”. If that is the case, what are you doing here? Your wife is free to respond if she desires.

    It sounds like your wife worked in the NICU so I think I understand her, but not you.

    Healthcare policy should not be political at least in this free nation, but it is and that is one reason we face all sorts of crazy decisions that lead to your questions.

    A doctor advocates for his patient and works within the law to provide the best care possible.

    I don’t agree with how Medicare runs its business nor do I agree with all the interference government creates in the willing buyer/ willing seller scenario. Those that believe in government control have caused the disparities you mention so don’t ask me what I feel about them. Ask the people that created those disparities.

  90. “which Medicare tries to do”

    Barry, it seems, according to what Niran has said, that Medicare and government care hasn’t accomplished their objective just like your beloved ACA didn’t accomplish its objective. Your solution to the problems faced by good people such as Niran is to have them “relocate for a better opportunity”. What you fail to consider are all those hardworking people that are left behind without medical care from doctors like Niran.

  91. “ I think there are many millions of willing buyers of health insurance”

    Barry, do you not understand the complete meaning of the phrase willing buyers and willing sellers? There were willing buyers even under the most despotic regimes of Mao and Stalin. Their rhetoric justifying what they did is the classic ‘we do it for the common good’ which is the basis of your argument.

    Additionally, you seem to be afraid of our Constitution and our democracy. “ too many people are unwilling to pay the incremental taxes ” Thus to you democracy and the Constitution only seem to apply when you get YOUR desired results. That is how many dictators think and run their countries.

    In this case you believe in punishing one group (the young), forcing them to pay more than is justifiable rather than taxing the nation as a whole. We have seen how your fancy ideas worked out, death spirals, mandates, penalties and more penalties. Your totalitarian desires seem to have no limits.

  92. Peter, I think there are way too many people who think all we have to do is soak the top 1% ad infinitum and everyone else can have a free ride. It doesn’t and can’t work that way. The broad middle class has to pay for the broad middle class. Most rich people already pay lots of taxes including as a percentage of income but there are limits before adverse incentive effects take hold.

    A fair share of taxes is NOT more than whatever they’re paying now no matter how much that is. That said, loopholes that benefit real estate moguls like Trump and hedge fund and private equity investors who benefit from the carried interest rules need to have their loopholes closed or at least sharply curtailed.

  93. “but way too many people are unwilling to pay the incremental taxes that it would take to finance the subsidies.”

    “and taxpayers don’t want to pay for those either”

    But those same taxpayers can’t buy insurance without their own subsidy. Most of us need a subsidy. Care will be paid for no matter what, emergency or other. People are delusional if they think not contributing through taxes makes it free.

  94. I think there are many millions of willing buyers of health insurance in the marketplace but they are incapable buyers because they can’t afford to pay the premium even if they are healthy enough to pass medical underwriting. You say provide them with subsidies outside of the marketplace but way too many people are unwilling to pay the incremental taxes that it would take to finance the subsidies.

    Then there are the unhealthy and already sick who need heavily subsidized high risk pools to provide them with coverage without inflating premiums for the healthy. Those high risk pools would also be very expensive and taxpayers don’t want to pay for those either which is one reason why politicians won’t vote for high risk pools that actually work for the people who need them.

    In short, most Americans want much more from government than they are willing to pay for. We’ve met the enemy and it’s us.

  95. “Can you?”

    My wife has been an RN for about 35+ years, plenty of shared stories of end of life, also for new borns who can’t contribute to the conversation.

    “I leave it up to each patient”

    Is that consistent with your 6 months of Alzheimer example? It sounded as if you were voicing the costs of futile care and the waste of money. Were you saying that futile care is wasted on those with Medicare/Medicaid, but not private insurance?

    There should be no government decisions on who gets futile care, but my wife has seen too many mothers trusting in god and free care to save their futile new born. There are more than enough of $1 million NICU dead babies. So should free care be subject to different rules than paid care? Do we separate those with free care when deciding what is futile?

    I don’t see Medicare telling you or me what is futile, but Medicare does pay for hospice. The ACA encouraged living wills through discussions with their doctors, then the reich wing crazies screamed “Death Panels”. Are living wills useful for fulfilling the patient’s wishes? Got yours?

    So is this consistent with the discussion on Mayo getting paid higher rates for Medicaid/free care?

  96. Niran, I think critical access hospitals with 25 or fewer beds in rural areas are in a different place from hospitals in more populated areas. They are often the only hospital for miles around yet operate at a comparatively low average occupancy rate. They need to be subsidized to makes ends meet which Medicare tries to do through higher payments than other hospitals may get. Even then, quite a few of these hospitals are closing or being converted to stand-alone emergency rooms.

    As for doctors and nurses who may be unhappy working in such a place because of what they see as lousy management at their particular facility, they are not trapped there forever. They can relocate for a better opportunity which lots of people in a multitude of fields routinely do every year.

  97. Niran, the vast majority of the population can and should be in the free marketplace. The individual/ insurer relationship should be the willing buyer and willing seller.

    This does not mean that subsidies or charity cannot be given, but it should come from outside the marketplace and have as little effect on the marketplace as possible.

    Look at how government and some people on this list look at things. Healthcare, they say is different which is BS. Every sector of the economy is different from every other sector, but these sectors still need to function in a free marketplace.

    Look at how these statists interfere. First they mandate that all people buy insurance from a private concern. How that is constitutional I never understood, but apparently the Constitution means very little to the statist. The statist charges the young more than the risk is worth in order to hide some of the cost. They know their social policies would have been defeated if they used general revenues.

    When the young still don’t buy the mandated insurance the statist creates penalties and wants to raise them. The following step is armed force and incarceration. Is that the America we want?

    A person’s health should not be controlled by government. We have a public health department to stop the spread of disease which can injure others.

    There are many ways to handle the problem of poor people so that no one has to go without basic care, but from what I am seeing the problem is growing because of these statist policies despite the tons of money that have been spent.

  98. Allan, I agree with you about the free market. Basic healthcare will likely be provided by the government and those who can afford it, will opt out, like you and I. The government will choose who receives which care. It will be those of us in the free market with the freedom to choose differently. That is the future, I suspect.

  99. Niran, though I believe in basic healthcare for all, relying on scientific formulas created by government means that government will choose who is the most important.

  100. Steve, if everybody does something stupid or different because their needs are different, do you blindly follow along?

    None of our European friends had a democratic constitutional government, so I guess we should have given up on that idea when the nation was founded.

    We are different… and remember, if it wasn’t for our differences Europe might be speaking German.

  101. Peter, I can tell you how patients react to end of life concerns based upon real patient contact involving tens of thousands. Can you?

    I leave it up to each patient , family or designated agent to make end of life decisions. That is my job at the bedside. Outside of the bedside stupid decisions have been made that have cost lives, money and all sorts of things.

    Maybe you like to play God. I don’t.

    One other thing, more for Barry than for you, it is nice on your comfortable couch at home to make declarations of whose life is futile. Some are obvious and most times physicians let that person die humanely. However, all too frequently physicians are as wrong as right as to who is at end of life where care other than palliative care should cease. But, Barry, I see you have learned you lesson from prior discussions and already gathering understanding of the problem. Thus you are now looking to government, Medicare bureaucrats, to make these decisions. Unfortunately, they have already demonstrated how politics affects their thinking so I wouldn’t ask them for too much.

  102. Steve, an MRI is still an MRI as technology improves, just like the television. Just like a television, advanced technology should be judiciously used. I know my self pay patients were very aware that they could frequently get prices that were lower than their insurer paid. They, however, were dealing in a free market place even though the seller was mostly in a government controlled market.

    Spend a lot of money, which we did and advances will come quicker. Money attracts. The healthcare system became lucrative and many of the brightest in science became doctors instead of using that talent to increase technology elsewhere that could increase the wealth of the nation. Unfortunately the government doesn’t know how much or where the money should be spent. The free market system determines those things far more accurately.

    The government has made many assumptions about the provision of medical care and have been wrong too many times, yet you don’t seem to ask for proof before accepting what the government dishes out. Listen to Niran’s complaints. She is dealing with a most important group of citizens, the future generations. Why is she earning so little providing care while anesthesiologists and others earn so much? How did hospitals get to charge so much? Why is there more fraud and abuse in Medicare than in the private sector?

    Isn’t it funny how private patients can frequently get less expensive pricing than what the insurer pays?

    I want 2017 medical care at the prices the free market would offer.

    As far as proof of which system is better. I think that has been proven over and over again. The free market and capitalism have elevated the standard of living all over the world and that has increased lifespan.

    What you seem to forget in your comparisons are the trade-offs. That leaves a lot of people impoverished and that impoverishment is responsible for a lot of our healthcare problems.

  103. That is the reason for rationing with a scientific formula of some kind. Then it is more black and white and there will be less gray, (notice I did not say no gray.) The bottom line is in order to keep costs under control, it would no longer be up to the physician or the patient whether or not it was futile to treat this condition with that medication. It would boil down to the numbers and meeting criteria to receive care. This is the future as we move toward basic health care for all.

  104. I understand we respectfully disagree on this subject. You are correct the CEO salary is driven by market forces, but that is not true of the compensation for many doctors, nurses or other hospital employees. Many communities have ONE option for hospital employment and that is a monopoly. True that the CEO can choose to move out of state etc… but that is the occupation for which they signed up. Physicians generally become part of their communities and seek continuity in care relationships. There are not enough different hospital employers to pit against each other and allow for free market forces to flow in small or isolated communities.

    Most physicians look at the CEO as the irritating gnat interfering with our work. Sorry but true. I am glad I do not have one of those in charge of my physician-patient relationships. It would kill me and I would have to find a new field in which to work. At the end of the day, most employed physicians are not happy or satisfied with their careers. Most are unable to make ends meet and keep up with student loan payments while working as independent physicians. This dissatisfaction accounts for the significantly increased suicide rate of physicians in this country and it is a shame.

    In my experience on staff at our local hospital, the CEO doesn’t lend much value or expertise for patients, physicians, or employees. As far as allocating capital, our local hospital is one of the few profitable ones amongst the other hospitals under the same umbrella organization so capital is being allocated to support ailing hospitals elsewhere. Not a wise decision in my opinion, but we will see if the gamble pays off.

  105. Tell us Allan, with your Medicare, would you opt for “futile” care with 6 month’s of Alzheimer medication? And how would you judge the competency of an Alzheimer’s patient to judge what type of care is appropriate? Death panels? Do you have a living will?

    Barry’s right, decisions like this are not black and white.

  106. I don’t think you can define insurance coverage with the precision you suggest because there are too many permutations and combinations of circumstances. What one doctor might call futile care, another might call marginally useful or even useful. Who knows? Even if you could define insurance coverage in such a way, Medicare would have to do it first because the health insurance industry is so hated by so many, it needs Medicare to provide political cover for changes that would limit coverage of care at the end of life. Short of rationing by age, I have no idea how to structure what’s covered and what isn’t at the end of life within an insurance contract. Besides, most doctors will tell you that they’re not very good at predicting exactly when the end of life will occur most of the time.

  107. In other words, healthcare is different. I agree with that. To take a more micro perspective, Ron Johnson was wildly successful in building Apple’s retail store base. He was hired away to become the CEO of J.C. Penney to rejuvenate that business. The strategy that worked so well at Apple was a total flop at JCP and almost drove the company into bankruptcy before he was fired.

  108. Niran, while I think I understand your perspective regarding the role of hospital CEO’s, their compensation as compared to doctors, and the value they add or don’t add to patient care, I don’t share it. The CEO of any large business and his or her senior management team has two main roles. The first is to provide leadership in establishing and driving the organization’s culture and direction. The second, and possibly most important, is to allocate capital wisely. Warren Buffett will tell you that his key role at Berkshire Hathaway is to allocate capital wisely on behalf of shareholders and to sustain a culture of honesty, integrity and fair dealing throughout the corporation and its subsidiaries.

    Who do you think makes the decision within a hospital to expand or contract, to buy new equipment or not, to expand or shrink services in one care category or another? Who drives the culture that makes the doctors, nurses and other staff want to work there? I learned early in my money management career that having the right person in a key spot in the organization can make a huge difference in how that organization performs. The wrong person or people can run the business into the ground.

    At the end of the day, hospitals have to cover their costs including the cost of capital. No margin, no mission no matter how dedicated and capable the doctors and nurses are. Capable leaders don’t grow on trees and there is an active national marketplace competing for their services. Their compensation is driven by market forces. So is the compensation of doctors and nurses and all other hospital employees for that matter. It’s as simple as that in my opinion.

  109. Maybe the problem is not enough government involvement. Nowhere else in the world does this stuff, just the US, where we have more market involvement than anyone else.


  110. A television is still a television. We have just been improving on established technology. In fact televisions and computers are probably a good example of what the free market does best. It takes existing products and makes them cheaper. In 1960 we did not have MRIs, just as one example. But, if you don’t want to answer the question just don’t answer it. You are making assumptions for which there is no evidence. The fact is that as government became more involved, we saw medicine advance at a rate not seen before. (You are committing the fallacy of composition. Just because something works with most commodities and services does mean it works with everything. You have no working model anywhere in the world where you have first world quality medicine and free market based health care.)


  111. Let me ask a question. Would anyone buy private insurance with a substantial increase in price for futile care, 6 months of Alzheimer medication for $100,000, along with other similar expenditures for care that doesn’t provide a reasonable life?

    My guess is that none of us would opt for that type of insurance. If that is the case, why do we have it? We have it because government is in charge and that makes healthcare political. Political healthcare leads to a lot of expenditures that wouldn’t be tolerated by us if we were directly paying the bill.

  112. That is free market thinking, but it has to be expanded to the entire healthcare sector.

  113. “In healthcare it increases costs but extends and improves lives. Isn’t that a good thing?”

    Of course, Barry, it is a good thing just like advances in the television set. The question is not the science or technology, rather the government system used to provide healthcare. That system has caused drastic increases in costs that are not necessary. Take note, the alternative system is mostly used with regard to television and the rest of private industry.

    We need an increase of free market thinking in healthcare’s purchasing and selling of goods and services. That will bring prices down.

  114. I agree on QALY metrics especially when it comes to end of life care. I wouldn’t do much of anything for patients with advanced Alzheimer’s or dementia beyond comfort care. Let nature take its course in those cases unless, of course, the family wants to spend its own money on marginally useful or even futile care.

  115. Peter, you are correct that hospitals are able to do this and take a “loss” on unreimbursed care at private rates. Interestingly enough, private practices cannot do this. We cannot take a loss in any way, shape, or form to offset profit. At the same time, we are not allowed to provide charity care in our own offices if we are a Medicare provider or it is considered fraud, for which we may be fined up to 100K per instance. We are not allowed to provide discounts to the poor below Medicare rates even if they are uninsured. The deck continues to be stacked against us. Fairly soon, the hospitals will control all healthcare down to the most basic provision of primary care and that will not make anything better.

  116. Barry, I believe it to be a good thing overall. The question about improved technology, medications, treatments etc.. however, how much improvement vs. how much increase in cost. If a new medication buys an Alzheimer’s patient 6 months, is it worth 100K? We must begin using reasonable methods of assessing “value” in Quality Adjusted Years of Life (QALY) or another basic method to be fair.

  117. You are correct we are missing a voice in leadership. Let’s hope many of these grassroots physician organizations changes that and tips the balance in our direction.

  118. Barry, everyone’s concerns about Medicare and Medicaid are reasonable. However, the hospitals are given more concessions than the private offices and it should be a level playing field for equal services. I agree with Dr. Noseworthy’s approach currently as I am having to do the same thing. It is extremely unfortunate. Here is the crux of my argument against outrageous CEO salaries: A physician provides medical care, evaluation, diagnosis etc… as do the ancillary staff such as nurses, phlebotomists, clerks, etc… The CEO is making up to 10x or more than the physicians for doing what exactly? Is that individual absolutely necessary for patients? Not really. I know you believe it to be an interesting sound bit. I see these business executives as unnecessary period to the entire process. Why does the salary of the CEO not match the median of the salary of physicians? A CEO has fewer years of education, works in a far less stressful environment and really does not contribute much in the way of saving lives.

  119. The problem here is that hospitals and other care givers base their practice costs on generous private insurance payments, then claim everything else below those reimbursements are money losers.

    When I go into a hospital with marble and glass entrance atriums and concierge services and 55″ televisions in the rooms I laugh when they say they’re just not getting reimbursed enough and can’t afford to treat the poor.

    The fact is we ALL need health care but there’s no used car or budget motel price for it. How about we just base all reimbursements on Medicare rates then let providers structure their costs to the reality of affordable care for everyone.

  120. When we die, our healthcare costs go to zero. New drugs, devices and other discoveries and innovations that extend our lives cost money and allow more of us to live long enough to get other more expensive diseases like Alzheimer’s and dementia. In short, there is a lot more that modern medicine could do for us patients as compared to 50 or 60 years ago. In every other field, technology usually lowers costs and improves quality. In healthcare it increases costs but extends and improves lives. Isn’t that a good thing?

  121. Steve, would you rather have 1960 television sets at 1960 prices or 2017 televison sets , far improved and less expensive in 2017? There is something wrong with the healthcare system that has gotten worse as the government has become more involved.

  122. Yes physician leadership is essential but made extremely difficult by current administrative staff dynamics. Not as much from lack of trying but steeply tilted playing field.

  123. I think a lot of our problems are due to a lack of physician participation and, especially, leadership.

  124. Query- Would you rather have 1960 health care at 1960 prices, or 2017 health care at 2017 prices?


  125. Niran, while I’ve been pretty critical of hospitals, especially their billing practices, over time, I think their concerns about the inadequacy of Medicare and, especially, Medicaid payment rates are reasonable. The only reason both programs work as well as they do is that there is still a significant private commercial health insurance sector to shift costs to.

    Several years ago, here in NJ, the state legislature passed a law that limits how much hospitals can charge uninsured patients if their income is less than 500% of the FPL or about $120K for a family of four. The original legislation called for limiting payments to Medicare rates. However, hospitals claimed and complained that Medicare only pays them 91% of costs on average and less than that for outpatient care. The final compromise legislation pays the hospitals 115% of Medicare.

    I don’t think most hospitals could survive if they had to accept Medicare rates from all comers even if it meant that there was no longer any uncompensated care. Medicaid, as you note, pays far less than Medicare and it’s perfectly reasonable that your practice and others have to limit the number of Medicaid patients you can serve. If the private commercial insurance sector didn’t exist, Medicare for all could not work at current payment rates. Also, as Mayo’s Dr. Noseworthy suggests, there is a limit to the percentage of its case mix that Medicaid patients can account for and still sustain its business model.

    Finally, I think you might want to check some of the IRS Form 990’s filed by non-profit hospitals to see what percentage of revenue is accounted for by wages and benefits and how much of that goes to the highest paid executives. At Beth Israel Deaconess Hospital in Boston, for example, Paul Levy was paid about $1 million per year when he was CEO there. Total revenue for the BID system was over $1.2 billion if I remember correctly. That means his compensation was less than 0.1% of revenue. Even if the 10 or 20 most highly paid executives of these hospital systems all worked for free, the cost savings would be minimal (1% to 2% at most) as a percentage of revenue. High executive pay makes for an interesting sound bite that appeals to a certain segment of the population but it’s little more than a distraction and not relevant to the problem of high costs. In the meantime, hospitals have to compete in a national marketplace for competent people at the executive level and in the local and regional market for doctors, nurses, techs, and other employees.

    Total employee wages and benefits for a typical hospital or hospital system accounts for between 50% and 60% of revenues. These are labor intensive entities that also have very high fixed costs. They need both a decent payer mix and a reasonably high occupancy rate to make the business model work and they also need a case mix that includes a respectable amount of surgical procedures and cancer care. That’s where much of the profit is on the hospital inpatient side.

  126. Dr. Nelson – take heart, I agree with you there are far better ways to reform a healthcare system. Alas, Healthcare is a difficult concept to grasp when one is not directly involved. Economists, policy wonks, and bloated government will never be able to drive this bus. Physicians must become involved to drive meaningful change. Baby steps, my friend, baby steps.

  127. Recently having closed a small private group practice of 41 years, the sense of abandonment continues. Basically, we could no longer adapt to the institutional changes occurring within our nation’s healthcare industry. Looking back, the scientific mandate for Primary Healthcare was always a problem but manageable but, NOT SO, for its evolving humanitarian mandate. The C.P. Snow conundrum of 1957 worsens, unabated. The ethics of health care, not healthcare, becomes increasingly troubling for any altruistic physician. AND, the Good Samaritan proverb continues to weigh more heavily as we recognize the over-riding expression of Parkinson’s Law. The cost of our nation’s healthcare was 6% of the national economy in 1960, and now its 18%.
    Here I am on the morning of the final ‘House’ vote for AHCA 2017. The leadership for our nation’s institutions with a . VISION . that includes “excellence” will no doubt continue to encounter cognitive dissonance as the main source of disruptive events for its governance — with or without the involvement of Congress. Without a community by community basis for healthcare reform, its unlikely that any current strategy for healthcare reform will do anything to change its quality or cost. The Design Principles for managing a ‘Commons’ have been defined and only await their application,community by community, to improve the HEALTH of each community. In the meantime, Paradigm Paralysis per Thomas Kuhn reigns supreme.