August 1, 2014 Recent News






The CBO has announced that Obamacare will help to lower healthcare costs over the next quarter century.  They predict the cost of federal health spending will be only 8 percent of GDP instead of the previous 8.1 percent.  This is a savings of $200 billion over the 25 years.  The report goes on to state that spending growth in programs like Medicare, Medicaid and Social Security will swell the national debt to unsustainable levels.  This year alone the feds will spend over $1 TRILLION in healthcare, one third of the budget.  The main growth factor is Obamacare according to the CBO.

The VA states it needs $17.7 Billion to put it right.  They really don't need that much, they want that much to continue their poor record.  Of the wants $10 Billion will be for hiring 1800 physicians and the remainder is for new facilities either built or leased.  In reality they need very few new physicians.  They need to revamp the culture of poor oversight and union manipulation of the amount of hours worked.  Even if they got the money they would have a hard time getting the physicians due to shortages and lack of competitive pay.

Bloomberg writes that the VA is financially inept or as the IG states they have notable weaknesses in financial stewardship.  They lose money by lack of processes to marshal the parameters of pay.

The Washington Post says that the wonderful VA is using HIPAA to beat down whistleblowers.  They use the law to threaten and retaliate whistleblowers and they do it routinely.  The heads of all the VA need to be replaced as do the people in Washington.  Even better is to dismantle the entire system and allow the vets to seek care locally.

Social Security purchased a $300 million computer system fro Lockheed six years ago.  The system was to process disability claims.  It still doesn't work.  It is still in the testing phase.  McKinsey & Co. found that the program was rudderless with on one in charge.  

The GAO sent fake investigators to see if they could register and get subsidies under Obamacare.  In 11 of 18 times they were able to and are still getting the subsidies.  This again shows and the administration agrees that the verification process needs major upgrades.  The problems were in the site 

The Medical University of South Carolina at Charleston reported that they looked at 5 million records at 550 hospitals is 2009.  There findings are the insurers saved about 10% in those hospitals with advanced electronic medical records (those with Meaningful Use).  The hospitals did not save anything.  

Louisiana has announced that in 2014-15 Obamacare signups only accounted for a decrease in the uninsured by 1.5%.  Very few of the over 100,000 signups were uninsured.  

Blue Cross Blue Shield of New York is pulling out of the Medicaid business in the state due to huge losses.  This leaves 53,000 people needing to get different coverage and possibly different physicians.  The company lost over $40 million over three years.

The Boston Globe in a mammoth 18 page story told about the problems with electronic medical records (EMR).  In the first part they detailed the death of a patient at South Shore Hospital from an overdose of insulin.  the underlying problem no matter what the hospital says is their using both paper and electronic records at the same time.  This part of the story also states the administration, FDA and HHS, refuses to opt for mandatory reporting of unsafe conditions using EMR.  All except the self serving industry believe that mandatory reporting should be mandatory.  The paper goes on to state a study of med mal claims from 2012 and 2013 (5700 cases filed) 147 were possibly related to EMR.  Of those half were serious and 46 resulted in patient death.  In another study of only nine weeks EMR was ranked the number one patient safety concern for 2014.  They found 171 events in 36 hospitals around the country causing harm or near misses.  Three resulted in death.  The next part of the story talked about the finances.  The claims that EMR would improve patient care and save billions of dollars a year have not been realized after five years.  Next is the part about the government funded change.  Obama campaigned on subsidies for EMR in 2008 stating that medical records need to be actually on computers.  He forgot again that saving actually go to insurers not patients or physicians. He was led down the path by Dave Blumenthal who said this would save the typical American family $2500 a year.  He then went to work for Obama.  He now is back at Harvard and now runs the Commonwealth Fund.  Another career hack.  Why did Obama push so hard for EMR?  The story says huge amounts of money came to him and the other Dems from the digital records industry.  The contributors did not respond to interview requests for the story.  Next was the problems with physicians using the software.  The rapid growth led to first one then another EMR in various hospitals and offices.  Physicians now are growingly unhappy with EMR.  The dissatisfaction has risen from 11% to 21% between 2010 and 20112.  Physicians do not to go back to paper but want systems that actually work and are friendly.  Too date there are basically none.  It is now "death by 1000 clicks".  Of course, vendors have no incentive to improve since once information is in a computer to attempt to transfer it is terrible.  The story goes on to discuss the safety problems such as opening up the wrong file and ordering meds on the wrong patient or not accurate transfer of information from the paper to the EMR or the "all the notes have gone" syndrome.  The article ends with the patient with multiple illnesses.  It describes the problems of multiple screens with long lists of meds and numerous test results where one mistake may lead to serious harm or death.  

Several news agencies tell the story of anger over Obamacare's narrow networks.  The narrow networks are being used in the election campaigns against Democrats for less access.  Federal regulators and state insurance commissioner are now looking into laws to prohibit insurance companies from their narrow networks.  This may cause the price of insurance to rise as it is a trade-off.  This is a real problem in smaller or rural states where are there are not a lot of choices in networks.  

In a modicum of good news the Medicare trustees report their program will last four years more, to 2030 due to a slowed rate of healthcare spending.  The administration says it is due to Obamacare but of course that is ridiculous since Obamacare is for the under 65 crowd.  No one on Medicare is on Obamacare.  The trustees say that Medicare will go from the current 3.5% of GDP to 5.5% by 2014.

The employer health insurance mandate is a joke with both sides of the aisle.  This joke is the reason Congress is suing Obama.  His executive decisions may cross the line into the illegal.  He has executized twice on this issue delaying the mandate instead of coming out and saying let's do away with the mandate.  He is afraid to touch the law legislatively.  This is a mandate of the law just as the individual mandate is.   

The for-profit hospitals are reporting a surge of increased patients with higher severity of illnesses leading to greater profits.  This is from the increase in the enrollment in Obamacare at the end of the first quarter.  

Gilead's Sovaldi, a great drug for Hep C is causing severe moral dilemmas.  All want to treat people with the deadly disease and this drug will CURE the disease.  The problem is the price.  Gilead obtained the drug when it purchased Pharmasset Inc. in 2011 for $11 Billion.  They are charging $1000 a pill or $84,000 for a 12 week course of therapy.  Is $84,000 for a cure morally defensible?  What is the cost of liver transplantation?  Is it OK to charge that for the rarer cancer treatments and not for the millions of people that need it for their hepatitis?  Should we worry about saving insurance companies the money or about getting the people cured?  Should the people have to wait in case other treatments that may or may not be as good are developed?  No answers, only questions.

The NYT reports that the tradeoffs of cheaper price and narrow networks is here to stay.  The number now is 48% of plans have the narrow networks.

The GAO has issued a report blasting HHS for their poor planning and outright stupidity in the rollout of  It states that the site is still unfinished these many months after the flub.  The GAO states that the Accenture contract has almost doubled but HHS says this is not an overrun but new work

Blue Cross Blue Shield of Louisiana is planning a 10% to 20% hike in premiums for the 2015 insurance year for their direct buy plans.   Employer plans are going up by about 8%.  Should be interesting to see the subsidies, co-pays etc.  

California reported that for 2014 premiums for individuals went up between 22% and 88% from 2013.  These were reported not to affect low income people because of subsidies.  Those who paid the premiums will now be low income for this year.        Top


In the battle of the electronic medical record there is no winner.  Physicians who are employed use Epic 23% of the time.  There are 22% of physicians employed who use other systems.  37% of physicians owned by hospitals use Epic.  This is contrasted to 3% of independent physicians who have their own system.  The top ranked system by physicians is VACPRS.  Epic was ranked 7th and NextGen was last.  VACPRS was also ranked as the most clinically useful.  Epic again was a distant 7th.  See Story above regarding medical record hazards.

The San Francisco Business times reports that California's Medicaid has 3 million more enrollees than it had last year.  To service these people Medicaid has dropped 25% of its contracted physicians.  They dropped the 26,400 physicians because they didn't comply with application requirements or hadn't billed MediCal for 12 months.  This is after they lost a lot of physicians by reducing already low payments by 10%.  There are now 82,600 physicians to care for about 11 million people.  Good luck to the people finding a physician.

An Modern Healthcare article tells about the upcoming round of new physician contract renewals with hospitals.  It seems the new contracts will get away from the old RVU productivity.  The new contracts are starting to include automatic contract renegotiation (less physician pay) upon certain events.  There will also be "pay for value" where all physicians will be paid as HMO payments for individual physicians.  Again, less physicians pay.  Another thing to watch for is the removal of some of the physicians that were hired originally.  Hospitals may want to pare down the group.  This will test physician loyalty to each other.  

HealthLeaders writes that physicians get the most money and benefits when they work for hospitals but they are happiest with their compensation package when they are employed in private practice.  That is because they are in charge and not being told.  The big advantage in university practice is they get time built into their day to do the 11% administrative work such as their EMR.

In 2010 Missouri Baptist Medical Center purchased eight cardiologists.  The Center is now losing all eight as they are going back into private practice.  The parent Mercy is developing a national contract for their cardiologists and the eight decided not to sign it.  The new offered contract had pay based on RVUs which mean your pay depends on how much you do as well as restrictive covenants.  Other physicians are also refusing to sign the contract and are going back into the private practice of medicine.

In a front page article the WSJ highlights a Metairie, Louisiana, internist Dr. William LaCorte, who has filed 12 qui tam suits.  Of the 12 five have ended in his winning and five have been losers, two are still outstanding.  To date he has been awarded after attorney fees about $38 million.  He has sued and won against Laboratory Corporation of America (LabCorp) and the big one against Pfizer.  LabCorp was alleged to do more expensive testing than requested and Pfizer was giving major discounts to hospitals for using Pepcid.  The discounts were more than given to Medicaid and therefore illegal. The hospitals were then using the drug even though others were ordered and on occasion injuring patients.

Did you know that 1/3 of all practicing physicians are DOs.  In a long article in the NYT they talk about Touro School of Osteopathic Medicine.  The training is basically the same as an MD plus osteopathic medicine.  The story also discusses the getting into school part.  There were 144,000 applicants for 6400 spots.  The GPA is slightly lower and the MCAT scores are slightly lower.  In 2020 the osteopaths will be equal to MDs in all states for residency.     

MD Ranger, a consulting firm for hospitals, strongly recommends multi-faility physician contracts for reducing hospital costs.  These are less expensive for the hospitals than multiple single campus contracts.  They found that if one physician is on call in two close hospitals the fee only increases 26% over a single agreement.  They also found physicians who do cross campus medical directorships need to have their hourly pay increased.  They said there is no difference in pay now but work increased by almost 11% per facility and the yearly pay increased by 37%.  Top


In the new category of idiots of the issue the Kasems win the prize.  The famed DJ Casey Kasem died about one month ago.  At the time of this piece he has still not been buried.  Why?  His widow Jean wants an autopsy on him even though he died after the court ordered no therapy.  Now the children wants their own forensic autopsy so they can protect themselves from her step-mother.  They filed for a court order to stop any destruction of the body until that time.  When the order was delivered the widow was not to be found nor was the body.  The police are investigating possible elder abuse whether Jean took Casey for a one week car ride giving him bed sores that later got infected.  Where o Where has Casey Gone.  Where o Where Could He Be.  Only his hairdresser knows for sure.         Top 


Bloomberg writes that when hospitals buy clinics prices increase.  Highmark sees a huge increase in chemotherapy since hospitals purchased physicians.  The only difference is a wristband on the patient.  They have also seen a 33% increase in outpatient EKGs from the hospitals. These are twice as expensive than if the physician office did them.  Hopefully, someone is listening and will stop the insanity of paying so much more for nothing.  Medicare allows "facility fees" when hospitals buy physicians but does not reduce the RVU of the physician accordingly.  I just saw a physician at Stanford who charged me $200 for an initial visit.  OK.  Then I got a bill from Stanford for $195 for a facility fee.  I was never informed of it ahead of time only when the bill arrived.  Medicare will pay both, but it is not right.  

To the chagrin of unions and left wing unionites, Prime Healthcare is in the processs of purchasing more hospitals.  They are buying two in the Kansas City area, St. Joseph in KC and St. Mary's in Blue Springs.  They are also the leading bidder for six hospitals in northern California, a hotbed of unionism.  The left wingers want to have Prime only buy some of those but Prime says all or none.  The hospitals are all going down the tubes without a buyer.        Top


 DISCLAIMER: Although this article is updated periodically, it reflects the author's point of view at the time of publication. Nothing in this article constitutes legal advice. Readers should consult with their own legal counsel before acting on any of the information presented.