Reforming Health Care the Right Way

The wrong way to reform health care is fairly easy to describe. It involves large bureaucracies trying to keep 300 million patients and 900,000 doctors from doing whatever they want to do. It erects a system in which people at the top have worthy social goals while everyone at the bottom faces perverse incentives to undermine the achievement of those goals. Wrong-way reforms fail for the same reason socialistic systems always fail — almost everyone has a self interest in their failure.

The right way to reform health care is also fairly easy to describe. It gives 300 million patients and 900,000 doctors good incentives to achieve worthy social goals. Right-way reform involves eliminating all of the perverse incentives faced by people at the bottom. Once that is done, it really doesn’t matter what people at the top think — they become irrelevant. Right-way reforms succeed because everyone has a self interest in their success.

So far, wrong-way reform has been Obama’s way and the Congressional Democrats’ way, while hardly anyone has stepped forward to endorse right-way reform.

“There’s no sorrow, toil or danger in that bright land to which I go”

Right-way reform begins with the recognition that we are all trapped in a dysfunctional system in which normal market forces have been systematically suppressed. Consequently, we all have perverse incentives to make costs higher, quality lower, and access to care more difficult than would otherwise be the case.

To correct this state of affairs, perverse incentives must be eliminated. And that means liberating people from the dysfunctional trap in which they find themselves.

Every doctor, every patient, every nurse, and every hospital administrator knows where there is waste and could — if motivated — act to eliminate much of it. Everyone on the provider side knows ways of improving quality, if only the incentives to do so were at hand.

One way of liberating doctors and patients is to get rid of third-party payment altogether. In markets where this has been done, low-cost, high-quality, accessible care is the rule. Direct service doctors, for example, communicate with patients by telephone and e-mail, they keep electronic medical records and prescribe electronically. They provide coordinated care and help patients get lower prices for diagnostic tests and specialists care. Overall, they are very accessible and they lower the time cost as well as the money cost of care.

Walk-in clinics in shopping malls, telephone and e-mail consultation services, urgent care clinics, surgicenters, the international medical tourism market — these are only a few of the many additional innovations that are possible when third-party payers are not dominating provider behavior.

Of course, third-party payment cannot be completely eliminated — nor should it be. Still, sensible reforms throughout the health care system follow the same general principles. Unlike the command-and-control approach being spearheaded by the Obama Administration, our ten point plan to solve problems focuses on liberating every part of the system. Here is what you can expect as a result:

1.   Free the Doctor: Your doctor will be able to act as your agent rather than the agent of your insurance company, your employer, or the government, and help you make the best purchases of drugs, tests and specialist services. Your doctor will be able to communicate with you by telephone and email and provide other services that today’s insurance won’t pay for.

2.   Free the Patient: You will be able to manage more of your own care and more of the money that pays for that care, instead of having all your health care dollars controlled by your insurance company, your employer or the government. You will also be able to purchase services you do not now get (e.g., telephone and email consultations and house calls) and avoid paying for services you don’t want or need.

3.   Free the Employee: Your employer will be able to help you obtain health insurance that is portable — traveling with you when you change jobs, or move in and out of the labor market. Today this is illegal is almost every state.

4.   Free the Employer: Employers will be able to make a monthly fixed contribution to the premium for your personal health insurance, much as they make matching contributions to 401(k) plans. In both cases, the benefit belongs to the employee.

5.   Free the Workplace: Employers will be able to give their employees choices between taxable wages and non-taxed benefits. If you are covered by a spouse’s plan, you will be able to obtain higher wages instead of duplicate coverage. If you are a part-time worker, you will be able to trade less pay for benefits you currently don’t get. These choices are illegal under the current tax law.

6.   Free the Uninsured: If you must purchase your own health insurance, you will get the same tax relief that is currently given to employees with employer-provided coverage — the opportunity to purchase insurance with pretax dollars.

7.   Free the Kids: Children who have lost their private health insurance because of the lure of a free State Children’s Health Insurance Plan (S-CHIP) will be able to return to the private sector where access to care is much better. If you qualify, the money S-CHIP now spends will be available to you to help pay for private insurance instead. The same opportunities will be available for enrollees in Medicaid.

8.   Free the Parents: Instead of having one parent on Medicaid, another in an employer plan, and a child on S-CHIP, public dollars will be used to help enroll all three in one private-sector, family-friendly plan.

9.   Free the Chronically Ill: Health plans will be able to specialize in treating such conditions as asthma, diabetes, cancer and heart disease. If you are chronically ill, these plans will compete to meet your special needs and they will be rewarded based on their success.

10. Free the Early Retiree: Employers will be able to help retirees who are not yet old enough for Medicare to obtain low-cost, high-quality health insurance with untaxed dollars — just as they make pretax contributions to health insurance for their active employees. You will be able to pay your share of the premium with pre-tax dollars as well; and the insurance will be owned by you.

These ideas are explained in somewhat greater detail in this NCPA Brief Analysis and in much more detail in my Congressional testimony.

Comments (34)

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  1. Ken says:

    Great post. And great song pairing. But don’t worry. They will eventually (after they have tired everything else) come around to your point of view on these reforms — just as they did on Health Savings Accounts.

  2. Stephen C. says:

    I agree with Ken.

  3. Joe S. says:

    Very sensible, as usual.

  4. Don McCanne, MD says:

    Your ten point program, all based on “free,” really breaks down when you consider the financial burdens that will be faced by those who have significant health care needs. But then so does the program moving through Congress. We’ll never get it right until we agree that we need a universal risk pool that is equitably funded.

  5. Bart Ingles says:

    There are two ways to fund a universal risk pool: direct but hidden subsidies, as we do now with high risk pools and HIPAA extension coverage, or through tax offsets, which is roughly what we do with employer-sponsored coverage.

    Of course, Dr. McCanne suggests above that these subsidies be equitable. Unfortunately, they are currently so murky that we wouldn’t know if they were equitable. E.g. for the former, what are the sources and levels of funding for risk-pool and HIPAA coverage?

    For the latter, we know the gross value of the employer tax exclusion varies widely by income and excludes e.g. COBRA consumers, but the real level of subsidy for a given individual is also hidden by the fact that we usually don’t know the exact difference in costs between private coverage premiums and after-tax costs of employer coverage.

  6. Uwe Reinhardt says:

    I hear Richard Branson of Virgin Air is seriously exploring space travel as a commercially feasible project.

    Once he has that done, I shall be able to book a flight to the distant planet on which John Goodman lives.

    It is the planet on which all physicians always are purely the agent of their patients and do not have any economic conficts of interest — such as making money on tests they prescribe to anxious patients or from referring patients to imaging centers in which they have a state or to collegues with whom they play gold, and so on. Such conflicts of interest do not crop up on John’s planet, not because government forbinds them (there is no government on that planet), but because such conflicts of interest just don’t exist there somehow. Remember: it’s another planet!

    On John’s planet it is also easy to have price competition among physicians, because all ill health on that planet can be cured with just one standard, well defined “unit of health care.” What that is I do not know, but John does, because he lives there. He’s probable consumed some, rationally, I wouold assume.

    Contrast that with an earthbound hospital charge master with 20,000 itsems in it or the physician fee schedule with 7,000 items in it. How would one make diffenetials in the elements of those huge vectors understandable to patients?

    John took on a new religion on that planet to where he actually immigrated — he once lived on earth. On earth he always boldly talked for decades about “Consumer Directed Health Care,” but neither he nor his entire think tanks (the NCPA) every did a stitch of work to help develop the user-friendly price information that patients as “consumers” would need to make rational choices in health care ex ante.

    Once on the new planet, John realized that he sinned on earth and swore to do better there. Of course, on his new planet it’s easy: there is only one type of health care and one price. The redemption was a piece of cake.

    All people on John’s planet have the same income — in fact, they all have John’s high income and all also have Ph.D.’s. or M.D.s So the problem with poor people not being able to afford high deductibles and therefore stiffing doctors and hospitals for it does not exist on John’s planet. Nor is there a problem with health illiteracry, because everyone on John’s planet has a Ph.D. or M.D. Every patient on John’s planet knows exactly what he or she needs before going to a doctor and simple shops around for a low price.

    For the most part, an individual’s need for health care in a coming year on John’s planet is certain and predictable and thus not really insurable. Only the need for about 20% of all health care is stochastic and hence insurable.

    On John’s planet, 50% of any large group of people account for 50% of all health spending — 80% of the people account for 80% of all health spending. Here on earth, 20% of the sickest account for 80% of all health spending, and much of that 80% will also be insured. It will be managed by some insurance clerk coming between doctor and patient.

    Oh how I long to go to the planet where John Goodman lives, where life is so easy and so simple. I am so tired of the mess here on our planet. Aren’t we all?

    Small wonder that John just up and left Mother Earth for a planet where all his theories actually work.

  7. Gregg Masters says:

    Nice try, but off base. Unfortunately your over simplified, yet tempting but superficial solution is primarily driven though an ideological prism that is quite fundamentally flawed.

    The granular complexity of our health care system has whack a mole DNA and is held in a permanent state of ‘anti-change’ gridlock by the very special interests who are addicted to the cash flow residuals of the sick care system they’ve architected.

    Since the 70s many talented and well meaning health policy wonks, clinical practitioners, informaticists, and even politicians, etc, have all come in good faith to the system redesign proposition; only to fail miserably.

    Only competition of the ‘right kind’ (per Clay Christenson) can have a salutary effect; and only after a massive fair re-valuation (i.e., collapse) of current inflated medical and health care services pricing, excess capacity and mal-distribution. At this point perhaps, an ’empowered consumer’, supported by health 2.0 technologies, a new provider (i.e., participatory medicine oriented) consciousness, and a revised tax code might enable the meaningful engagement, and continued shaping, of a health care delivery system vs. the menu fodder of rapacious group of relentlessly hungry providers and their capital financier partners.

  8. russ says:

    >>Free the Employee: Your employer will be able to help you obtain health insurance that is portable — traveling with you when you change jobs, or move in and out of the labor market. Today this is illegal is almost every state.

    Fill me in. Where is this LEGAL? What state or states?

  9. John R. Graham says:

    Oh Professor Reinhardt! How do we all manage to buy automobiles without PhDs in automotive engineering, or making sense of the thousands of items in an automobile, which come from hundreds of suppliers of intermediate goods and services, all of which have different contracts with the automobile manufacturer?

    How do we all manage to engage our own lawyers, or plumbers, or accountants, or electricians, all of whom have superior information to us about what they’re selling us? (In fact, that is why we engage their services.)

    Has NCPA, or any other think tank, done a “stitch of work” to develop the user-friendly price information needed to purchase automobiles or houses or shoes or tomatoes? No, because we don’t need a 3rd party to do that: Markets make it happen.

  10. Uwe Reinhardt says:

    Earth to Gregg Masters:

    You on John’s planet as well?

    To John R. Graham:

    I like your automobile analogy. As you may know, there’s a bundled payment for all the stuff going into a car of a given model and one unit of that model is like any other.

    Given that there are millions of uninsured in this country — 25% of the populaiton around John Goodman — please tell me the website where I can find bundled prices for major health care procedures — e.g., cancer care or CABGs. You muats have these at your finger tips, but I missed them,

    Or are you, too, up these in space somehwre with John?


  11. Gregg Masters says:

    Prof Reinhardt: I am puzzled by comment above; in agreement with your argument. My comment is directed to Mr. Goodman’s premise.

    Please See:

  12. Nathan Kleinman says:

    Probably the key sentence in John’s post is this: “Once that is done, it really doesn’t matter what people at the top think — they become irrelevant.” Those pushing hardest for President Obama’s idea of health care reform are of two types: those who want to be in control of everyone else and those who want to be taken care of. Those at the top will always work very hard to stay relevant and stay in charge of others. Unfortunately, that is not what is good for those at the bottom. Health savings accounts and proper incentives promote personal responsibility and growth (and when set up correctly are not hazardous to anyone’s health).

  13. John R. Graham says:

    Professor Reinhardt asks a very good question. One answer is the Havana Hospital where Michael Moore took his U.S. patients in the movie “Sicko”. As we can see (, it offers heart surgery within 3 days for between $9,000 and $15,000. It’s right there, on the homepage.

    It would be a little more challenging if I wanted my operation in the U.S. But if I were a Canadian, I could ask Rick Baker help me, and he has allowed his negotiated rates to be posted right here on this blog.

    Unfortunately, Because I am a U.S. employee with employer-based benefits, I do not enjoy a website with bundled prices. If I were diagnosed with cancer and wanted to go to the University of Texas’ M.D. Anderson Cancer Center, for example, I could not call them up and ask “how much”? I would call Anthem Blue Cross and find out if M.D. Anderson was in-network, etc.

    However, if I was in an Arabic country, I would call M.D. Anderson’s International Center and ask to speak to Laila, who would advise me. Once again, it’s right on the website.

    So, the complexity and opacity is a function of 3rd-party payment, not of health care per se.

  14. Linda Gorman says:

    You can find websites with bundled prices. But you have to look. It is more common to get package pricing by calling. But it mostly exists in health care markets where cash is the primary means of payment. Private hospitals in the UK, package pricing for cash paying Canadians coming to the US, plastic surgery, vision correction surgery, maternity care, and huge chunks of dentistry.

    We mostly don’t have bundled pricing for medical services paid for with third party payment because the passage of Medicare enshrined the dysfunctional hospital payments system that was developed in the 1930s in regulatory concrete. Insurers followed.

    As is so frequently the case, the reason why what one wants doesn’t exist is that government is in the way.

  15. HD Carroll says:

    What is needed is intelligent reform aimed at a rational structure, not the symptom bandaging, political pandering, and academic posturing that make up the heart of the awful choices being put before us by all sides in the political party debate. The “market” has never been allowed to function because it has been totally distorted by the revenue addictive behavior created by Medicare and Medicaid.

    A totally free market would likely not work very well for all elements of society for at least some of the valid, if exaggerated, points made by Professor Reinhardt, most of which can be attributed to the lesser of human qualities that we pretty much have to live with. However, that is not a reason to reject a “mostly” free market – one with intelligent regulation (I know I will now be the one accused of exaggeration, if not appealing to inherent contradictions) that will serve to protect all parties from each other, at least at the “boundaries” of the issues. I.e., as reasonable a facsimile to a “fair” playing field amongst providers, patient/insurance purchasers, and third-party payers (or at least second-party reimbursement entities) must and can be structured.

    My belief and opinion is that at the heart of any such construction must be an insistence on fair and transparent pricing by providers for their services. “Fair” in this context means the provider must charge without variation the same price for the same service/package to all comers, and may not discount or load that essential price to any “third party” (ultimate discounting between provider and patient is allowed, but not with whatever party stands “behind” the patient through the patient also being an “insured”). The economic transaction is between the patient and the provider, so, technically, there is no “balance billing,” there is only the difference between what the patient owes and they recover from their insuring entity. Needless to say, of course, for such a system to work, it must at least ultimately include any public programs that are not provided by government employed providers on the same basis as all other insurance type entities.

    Transparent means that the prices must be openly available in a standardized format so that easy comparison may be made. However, it must be one that is robust and dynamic, allowing for creative and innovative packaging strategies. Yes, there are lots of “fine points” that must be answered about such a system, but that is well within capability once the quantum shift in the fundamental principle has been made.

    Other aspects of the general construction can be made to create a proper equilibrium between the main parties, including balancing the elimination of underwriting and health status against “mostly universal” participation, etc. However, without fixing the core issue, other reforms are spitting into the wind of single payer inevitability.

  16. Rob Katsky says:

    Hot air rises so I suppose Uwe R. has risen far higher out into space than John G.will ever get. The thin air must have a lot to do with Uwe’s hypoxic response.

  17. russ says:

    ” Given that there are millions of uninsured in this country — 25% of the populaiton [sic] around John Goodman — please tell me the website where I can find bundled prices for major health care procedures — e.g., cancer care or CABGs. You muats [sic] have these at your finger tips, but I missed them,”

    Here’s one example; Nuffield, one group of hospitals in the private medical sector of the UK. They offer a fixed, guaranteed, all-inclusive price for a number of surgical procedures. The price covers the surgery, consultant’s fees, anesthesia, etc.

    So yes, it can be done.
    “…….. We can give you a guaranteed price tailored to your individual treatment that includes all hospital costs, your Consultant’s fee and your anaesthetist fee, if applicable. This gives you peace of mind and ensures that your price will not change, no matter how complex your procedure…….”
    I wouldn’t expect Nuffield, or any other place, to offer fixed price for something unpredictable like cancer treatment.

  18. russ says:

    Oh, and if the payment creates a cash flow problem, you go to their finance department for an interest-free loan.

    I have a HSA. I wouldn’t price shop for cancer treatment, but I don’t have to. The insurance company (the HDHP) has price-shopped for me. It’s called their “network”. They negotiated price in advance, though it would be difficult if not impossible to offer a guaranteed price for most cancer treatment, since so much is unpredictable.

    All that’s needed is to go an in-network facility, which, for my insurance, would be virtually anywhere.

  19. Uwe Reinhardt says:

    Linda Gorman writes:

    “We mostly don’t have bundled pricing for medical services paid for with third party payment because the passage of Medicare enshrined the dysfunctional hospital payments system that was developed in the 1930s in regulatory concrete. Insurers followed.”

    Evidently she has not kept up with hospital pricing since the 1930s. In 1983, for Medicare, Ronald Reagan’s administration introduced a sharp departure from the fee-for-service payment then still in vogue in the private sector, namely, the DRGs. These are, in fact, abundled payments, albeit only for hospital care.

    I recommend to Ms. Gorman the MedPac website where that system is described. She will discover there that we have come a long way since the 1930s.

  20. Ronald Feldman MD says:

    Prof. Reinhardt-

    You sound angry.

    Fixing Medicare fees at often less than the cost of providing services isn’t fair, is it? Forcing well-intentioned physicians to consider abandoning their oldest and sickest patients isn’t fair either.

    Most physicians I know give time and energy to people in all walks of life and economic levels far beyond our compensation. In my case, 58 percent of my charges are uncollectible.

    Until you walk on the planet of actually practicing medicine, you might be less sure of your convictions.

    Lastly, I would like some links to the planet you want health care to be on.

  21. John Goodman says:

    Uwe, I hope you never have to enter a hospital. But if you ever do, take a look at all the bills you get after discharge and tell me if that’s what you have in mind by a “bundled price.”

    Anyway, Tom H. and I have a few responses to you in the comment section of the next blog post.

  22. Rob Katsky says:

    Yes to Uwe’s response to Linda G. Government has invented or incentivized many ways of payment, DRG’s, HMO’s all sorts of coding systems, all sorts of physician bans on ownership, intrusive audits, the CON, etc. Government even added FBI agents and the like, price controls and limitations of treatment all in an attempt to control health care. Government failed and caused costs to rise and in many cases reduced quality and innovation.

    Keeping up with what government does also involves keeping up with all of government’s failures.

  23. hoads says:

    Reinhardt displays the typical deficiency of liberals or really anyone who supports central planning– You don’t know what you don’t know– and yet you offer rationales for your socialized prescriptions as if you have some crystal ball.

    Look at Medicare. It was passed (using the same type of deception and non-transparency as is being employed now) in 1965? when each elderly person was supported by 6 or 7 workers. We’re now down to 1.7 workers supporting each SS/Medicare senior. Medical technology was elementary. Antibiotics were the pinnacle of pharmaceuticals. And yet, legislators took a survey of medical care and enacted legislation based upon the facts (and myths) on the ground at the time and have been relegated to whack a mole regulation ever since to the detriment of our healthcare system and taxpayers alike.

    So what you don’t know, Mr. Reinhardt, is what kind of exchanges between patients and healthcare providers would have manifested had they’re not been such uninformed, top down attempts to control the government’s healthcare tab while attempting to create a socialized healthcare utopis. Take a look at other sectors within the economy and you find that the private exchanges between buyers and sellers meets the needs of both.

    There is no reason why healthcare would not have followed something like the retail market in developing innovative medical delivery systems that seeks to meet a public need and make a profit at the same time. We already see it in cosmetic surgery and Lasik surgery. The same principles could apply to most other areas of healthcare if buyers and sellers were free to set their own prices and develop their own products. Entrepreneurship has been mostly stripped from the delivery of healthcare and instead we have a government intent on controlling the trillions upon trillions exchanges between patients and providers—IMPOSSIBLE! And we are reaping the results of this pie in the sky mentality.

  24. Don Levit says:

    Hoads is right about the deception and non transparency of Medicare.
    One of the biggest deceptions is that your premiums pay for your benefits.
    They do nothing of the sort. If they were premiums, they would go directl;y into the Medicare Trust Fund.
    But they are not premiums, they are taxes, which go directly into the Treasury’s General Fund, which are then dispersed as any other tax revenue.
    In addition, for Social Security your benefits are not directly related to your oremiums, for they are taxes, similar to Medicare.
    Your benefits are not directly related to your contributions either.
    Instead, they are dirertly related to your earnings history.
    In fact, if you never paid your “premiums,” you could still receoive benefits based on your earnings, not your contributions.
    Now, that’s transparency and non deception for you.
    Don Levit

  25. Don Levit says:

    We obviously haven’t had free market principles of supply and demand in the health insurance market.
    One indication of that is the premiums in relation to income.
    Median household income is between $50,000 and $60,000.
    Median family premiums are around $13,000 per year.
    How could premiums be 20-25% of a median family’s income in a supply and demand environment?
    Realistically, premiums should be much lower, even if the benefits were lower.
    Why has this occurred?
    I believe it is due primarily to 2 subsidies:
    1. Employers subsidizing the premiums.
    2. The tax advantages of health insurance, which is by far, the largest tax break offered, even surpassing the beloved hone interest deduction.
    Without these subsidies, we wouldn’t be where we are.
    The proposed legislation, to my knowledge, continues these subsidies.
    I wonder what the result will be?
    Don Levit

  26. Uwe Reinhardt says:

    To John Goodman:

    Read again what I wrote in response to Ms. Gorman’s comment, but, please, more carefully this time:

    “Evidently she has not kept up with hospital pricing since the 1930s. In 1983, for Medicare, Ronald Reagan’s administration introduced a sharp departure from the fee-for-service payment then still in vogue in the private sector, namely, the DRGs. These are, in fact, bundled payments, albeit only for hospital care.”

    Did you see that, John? “In 1983, for Medicare ….”. What I meant by that is for Medicare, not for private insurance.

    I am not on Medicare. I have private health insurance. And yes, you are right, John, nothing is bundled there – it’s all piece-rate payment, and it is driving me nuts.

    But let me repeat: I wrote that payments have been bundled into DRGs for Medicare patients. Medicare is run by the government.

    Happy holidays!


  27. Rob Katsky says:

    Uwe R says: “But let me repeat: I wrote that payments have been bundled into DRGs for Medicare patients. Medicare is run by the government.”

    I don’t understand Uwe R’s hubris regarding the fact that government can create DRG’s along with big holes in the ground. Government controls both the treatment and the price of Medicare DRG’s. Thus among other things we have hospitals competing to create open heart units because the Medicare system creates big buck advantages for those hospitals doing a lot of open heart surgery. Do we see as many hospitals doing the same for diabetes treatment etc.?

    Government controlled DRG payment variations become incentives that can be both good and bad. Would we want to see computers produced in the same manner?

  28. Linda Gorman says:

    Yes, we got DRGs in 1983. There were, if I recall correctly, 538 of them, each with eight secondary diagnoses, and relative weights to reflect average costliness of cases. If I recall correctly hospitals still had to submit itemized bills because the Medicare fiscal intermediary used the itemized bill to determined a patient’s DRG. This is hardly the kind of bundled pricing system Professor Reinhardt likes to imagine. And, like all price controls, those DRGs didn’t work very well.

    To correct the problems with the DRG system CMS has now introduced the severity-based DRG system. It is based on the novel idea that patients who are really sick might cost more to treat, and recognizes that paying average cost for all (the idea behind the original DRGs) creates an incentive to deny the sickest patients the care that they need.

    Various trade publication articles claim that the new DRG system requires even more detailed coding, which will likely lead to even more detailed billing. Hospitals must still submit itemized bills to their Medicare fiscal intermediary so that it can categorize the patient in the new Medical Severity Diagnosis Related Group.

    The DRG payment is still just a starting point. It is then adjusted for a host of other factors that may or may not have anything to do with the cost of patient care. These include location, percentage of low-income patients treated, indirect medical education payments, payments for technology add-ons, and high cost cases. High cost cases are determined by arcane formulas that would have made the USSR’s GOSPLAN proud.

    This is not the kind of bundled payment system that exists in cash for care healthcare. In cash for care, patients get a price up front. In Medicare MS-DRGs, providers learn what they will be paid after they submit the kind of itemized bills that originated in the 1930s.

    The system is so complex that even CMS gets the DRG payments wrong. A June 3, 2009, Federal Register posting corrects CMS’s application of Medicare severity long-term care diagnosis-related group relative weights for payment. They were calculated incorrectly for the entire federal fiscal year due to the “misapplication of our established methodooly in the calculation of the budget neutrality factor.”

    CMS isn’t paying up–unlike the private sector, the government typically isn’t held accountable for its errors.

  29. Stan Ingman says:

    The best systems in world are some mix of government and private care givers. You can call this socialism or social capitalism. Even Adam Smith understood this long ago. The nation systems that serve more patients with good care have established the good incentives to produce the best results. USA has not done this well- now all seem to agree. Remember right wing claiming we had the best system in the world. Few people now claim that now. Surprise or ideological shift of significance? I remember when all insurance was labeled socialistic and end of world.

    The Dutch and Swiss systems with the strong private insurance models along with good regulation and universal coverage is now the latest flavor of the week.

    I have some faith that if passed it will move us toward progress in next decade. Calling it socialistic makes me wonder whether you have run out an argument for your side of the argument, John?

  30. Dr. Bob Kramer says:


    The only way we can bring any sense out of this abysmal situation is for reasonable people who truly have no ulterior self-serving motives to sit down and discuss differences, and not spend all their efforts criticizing the opposition. Both parties are guilty and my esteem for our elected officials keeps going lower and lower. Remember my 3 C’s: communicate, collaborate and cooperate.

  31. Linden Blue says:

    Well said!!

  32. carae says:

    Thanks – Agree.

    Season’s Greetings to All.

  33. Robert M. Johnston, M. D. says:

    A friend, who is a CPA in Virginia wrote the piece below to the Senators from Virginia. I thought it might provide some material for others to use in communicating with their respective representatives and senators.

    Let’s keep up the fight, and let the libs know that we are not backing down!

    Robert M. Johnston, M. D.

    In my thirty-five years of being a reliable and independent voter, I have never before felt compelled to contact any of my representatives.

    I want you to know that I voted for you because I thought you would exercise independent thought.

    I have been very concerned with our fiscal policies, namely; runaway spending, record deficits and debt levels, and the impact that several proposed pieces of legislation would have on our economy and deficit. For the first time in our history, we’ll likely leave the next generation worse off than we are.

    By voting for one of the largest spending bills in our history without even reading it, let alone understanding the consequences (intended and unintended) and more recently, your vote in support of cloture for the healthcare bill, you have sorely disappointed me.

    While health care reform always sounds good, I believe we must be extremely cautious when injecting the government into an industry which represents approximately 13% of our economy.

    This bill utilizes ten years of revenues to pay for approximately six years of expenditures, yet it is being represented as defecit neutral. Do you really believe the populace is that stupid?

    To achieve this purported neutrality, this bill assumes a 20% reduction in physician reimbursements for Medicare patients. I have spoken to several physicians I know, and they tell me that physicians who primarily see Medicare patients can not survive at the current reimbursement level. With a further cut of 20%, what will attract the best and brightest to this critical vocation? Why would the best and brightest incur the rigors and massive cost and related indebtedness of medical school when it is obvious that they would be unable to earn as high a return on their investment as those in other professions?

    Additionally, over the last four years, Congress has shown no inclination to allow the previously enacted Medicare reimbursement reductions to take effect, yet those very reductions are at the heart of this reform bill, accounting for almost half the cost of the bill. Is not the inclusion of such savings in this bill therefore fraudulent? I can not imagine the Congressional outcry if companies (AIG, for one example) even attempted such obfuscations!

    This legislation leaves untouched the most obvious areas ripe for savings such as tort reform, elimination of health insurers’ anti-trust exemption, prescription drug re-importation and the ability to purchase insurance across state lines (as we can for other kinds of insurance).

    Instead, it creates massive new bureaucracies, increases taxes and adds significant burdens to the Internal Revenue Service. Based on that, it appears that Congress is unwilling to even try free market approaches and rather, rule by fiat. I am vehemently opposed to such an approach.

    I have had people tell me that should their taxes be raised, they’ll stop making money. Who will then pay the costs of this bill? Whose taxes will you then increase? Have we not yet learned that when taxes are raised, revenue receipts diminish? Have we not learned from the Kennedy and Reagan tax reductions that tax reductions stimulate the economy and ultimately increase tax receipts to the Government?

    Now, as we near the end votes, we see that politicians’ votes are being bought and an extremely unpopular bill which will have a huge impact upon our national economy and health care is being rushed through with early morning votes and false deadlines such that there is insufficient time to fully understand the consequences, and unintended consequences of this legislation. There is also insufficient time to hear fully from your constituents, presumably to avoid a repeat of the August recess debacle. To me, this is an act of political cowardice.

    Early this morning, you voted for cloture on a bill which places the people you purport to represent in the position of subsidizing the populations of Nebraska, Louisiana, Vermont and Massachusetts. I demand you explain why you sold out those you purport to represent! Why should Virginians not be treated every bit as well as any other state’s residents?

    I urge you to change your record and represent those who elected you. Senator Webb, I promise that should you continue to vote in favor of this legislation, I will not only contribute to your future electoral opponents, I will work for them to ensure that your votes do to your political aspirations what they will do to this Country.

  34. In beyond years, a minute open sign up period able plan holders to modify plans around Jan. 1 as well as March 31. That amenable enrollment period is eliminated. just after Jan. 1, plan stands can sole drop your Medicare edge coverage along with switch here we are at original treatment. The switch is required to be made before Feb. 15….Elimination of your second registration period is among the list of changes medicare users can notice next year.