The ACO power grab and those who stand to profit from it

Sunday, May 19, 2013 - Medicine and Politics in America by Adam Frederic Dorin, M.D., MBA

SAN DIEGO, May 20, 2013 - Get ready, dear America, health reform’s newest brain child, the Accountable Care Organization (or ACO), is coming to a neighborhood near you.

ACOs have been compared to the HMOs of years past (and present). Some have compared ACOs to ‘mini-HMOs’, encompassing regional power structures caring for thousands of patient lives, which will ration a shrinking pie of health care money to a select group of medical providers.

By law, ACOs must care for a minimum of 5,000 patients, and are ostensibly designed to streamline health care services. ACOs will designate  ‘favored’ doctors and medical practices, study and apply over sixty government-mandated ‘metric’s for quality outcomes, and manage a diminishing pool of money for Medicare/Medicaid patients.

The hidden risk of ACOs not mentioned by those supporting the ‘Affordable Care Act’ is akin to the principle of nepotism on a large scale; that is, local hospital administrators and medical society leaders (and major health system insurers) will have near absolute power to shun enemies, reward those who do as they dictate, and promulgate what many fear will be capricious decisions shrouded beneath the cover of ‘reform’. 

The officers and board members of these ACOs will primarily be people who already have jobs. Their ACO positions will afford an opportunity to carve out a richer niche for themselves and their practices and institutions. These individuals will be paid to sit around the ACO table. They will make money from their positions of influence. A tragic consequence will be that some of the most competent, high quality doctors and clinics in the neighborhood will be denied access to the ACO network, thus precluding patients from receiving superior services.

By buying up medical practices, and controlling the narrative on what constitutes the best ‘evidence-based medicine’, hospital executives will be practicing medicine without a medical license.  Instead of letting the marketplace dictate patient preference, a few elite ACO board members will now form the community version of the much denigrated, federal-based Independent Payment Advisory Board (IPAB).

The government will tell you that by working to combine computer information systems between doctors’ offices and the central ACO command (a costly process that could stretch well beyond a decade), and by  rewarding only those providers who cooperate with their rules, that patients will ultimately benefit. If this is so, it will defy decades of dissatisfaction with government-controlled entities like AMTRAK and state Motor Vehicle Administrations.

Those individuals proffering the benefits of Accountable Care Organizations should first disclose to their audience what financial benefits they will personally gain by leading/creating/running these hierarchies of community-controlled medical services. In other words, the public should be apprised of all conflicts of interest that exist for executives and board members of ACOs.

Hospital medical staffs (and the public) should be told which of their leaders and Medical Executive Committee members are being paid in any way (including hospital exclusive contracts, medical director stipends, etc.) by the hospital/health system owners.

Without this knowledge, opponents of Obamacare could be harmed by dubious and self-serving actions by the Feds and their lackeys.

Independent thinking physicians, ancillary healthcare workers, and citizens in general could find themselves as victims of a political agenda. As ACOs ramp up in your neighborhood, beware America. Big Brother is now your doctor’s boss.

http://c.washingtontimes.com/neighborhood/medicine-and-politics-america/2013/may/19/aco-power-grab-and-those-who-stand-profit-it/

Congressman Andy Harris, M.D. on Obamacare:  http://bit.ly/11SoShm

America’s leaders must resist the temptation to ‘control’ the dialogue on health care reform

America’s Medical Society is transitioning to a more full-service educational vehicle to assist patients (especially those who are underprivileged) in navigating the health care system.  In these uncertain political times of health care ‘reform’, this journey can be confusing and even hazardous.

To those who remember, and perhaps miss, the strongly worded AMS editorials in opposition to the ‘Obamacare’/Affordable Care Act legislation, do not despair–there will be plenty of vigorous debates on both sides of the aisle to help shine light on how to best deliver and access medical care in these United States.

America’s Medical Society, like many non-profits and other citizen groups lately (e.g., Tea Party activists), was negatively affected by an unscrupulous application of government and institutional power used to quell its free exchange of ideas. This appears to be a common theme in the  news these days…it seems some people have forgotten the lessons of America’s independence.  The roots of this country were founded in the undying belief that tyranny can never be allowed to reign again.  Those in positions of government power who seek to quash opposing views through harassment and intimidation only diminish their own profile and lessen this great nation.

Rest assued that the articles which appeared in this forum over the past few years can still be accessed via any search engine, the Washington Times archives, and other media sources/journals/magazines.

From pharmacists who fail to disclose hidden incentives by big pharmacy chains pushing generics over prescription medicines, to hospital systems seeking to destroy the livelihoods of physicians who have opposed their participation in Accountable Care Organizations, to the misapplication of law enforcement used as a tool of political oppression, there have been grave and troubling developments in the U.S. over the past few years.

AMS will track changes in the healthcare political landscape and work tirelessly for patient rights and the best quality of medical care.

SAN DIEGO, February 17, 2013 – There is a new battle brewing over the Medicare ‘Part D’ prescription drug program that has been in existence since 2006. To date, this program has come in consistently under-budget to the tune of a savings of $435 billion below initial budget.

A Harvard study showed “Gains in comprehensive prescription drug coverage as a result of Medicare Part D were followed by a decline of more than 4 percent in the rate of hospitalizations for 8 conditions sensitive to medication use.”

According to the Medicare Trustee report, Part D prescription drug costs have cost significantly less than expected over the past decade. In 2004, the Medicare Trustees “projected that the Part D benefit would cost $131.4 billion in 2011,” while in fact the real cost was about half this amount. In fact, the prescription drugs cost only $67.4 billion in 2011, just 51.3 percent of the originally projected expense.

The reason for this decrease in actual cost has been attributed to two potential factors—private insurance and the preservation of innovation.

By exercising private insurance models and competition some believe the savings to drug costs have been worth the potential out-of-pocket increased expense to some patients.

READ MORE: The intersection of medicine’s pseudo-reform and government tyranny

There is a movement afoot in the government to curtail Medicare Part D—perhaps even discontinue it. Some believe that the feds should control the entire management of all prescription drugs, thus decreasing incentives for innovation for new drug research and creation.

This is especially troubling for society at large.

Despite the attempt by some to demonize the pharmaceutical industry, it is irrefutable that America’s added costs to patient care and new drugs are directly linked to our leading role in developing, testing and delivering the majority of the world’s new medicinal breakthroughs.

With decreased pharmaceutical revenues and complete government ‘price controls’ on all drugs (resulting in less risk taking and more reliance on older, less advanced drugs), future generations will lack the necessary medicines to fight rapidly mutating and deadly infectious agents, and new chemotherapeutics to win the war on cancer will not be so easily forthcoming.

Some who believe that ‘bigger’ government control is ‘better’ have sided with the pro-Obamacare crowd. They are encouraging the Secretary of Health and Human Services to dismantle Medicare Part D, thus exercising unlawful discretionary powers, without Congressional permission or oversight.

Medicare Part D originally included a provision known as the “non-interference clause,” which “prohibits the Secretary of Health and Human Services from interfering in the private price negotiations between Medicare Part D plans and drug manufacturers and pharmacies in the program.”

The nonpartisan CBO does not side with the ‘grow government power’ crowd. In fact it recently noted that private insurer Part D plans can more effectively negotiate savings on Medicare drug costs; furthermore, it notes that “striking Part D’s non-interference clause is unlikely to achieve any significant savings”unless the feds also restrict patient access to prescription drugs (or fix prices outright).

The General Accounting Office has reported that Part D plans decreased costs for beneficiaries “through their ability to negotiate prices with drug manufacturers and pharmacies.”

The Congressional Budget Office has noted that Part D plans negotiate better rates than some private insurers; per the Medicare Trustees, “many brand-name prescription drugs…carry rebates up to 20-30%.”

The average monthly Part D beneficiary premium is about $30 in 2013 and has remained unchanged for the past three years.

A recent study in the Journal of the American Medical Association found that “implementation of the Medicare prescription drug program was followed by a $1200 per year decrease” in non-drug medical spending among those who previously had limited drug coverage.

All of this adds up to a strong endorsement to keep the Medicare Part D prescription drug program intact. Keeping the government’s hands out of the pharmaceutical cookie jar will yield substantial benefits for patients, the national budget, and our peace of mind that future generations will continue to benefit from advances in new drug treatments and cures.

READ MORE Medicine and Politics in America by Dr. Adam Dorin

My father, an 83 year-old Korean War vet, and my daughter (almost twenty years ago). May our children and grand-children recoup the freedoms we are losing today…

“The contest is not between Us and Them, but between Good and Evil,
and if those who would fight Evil adopt the ways of Evil, Evil wins.”

–        Thomas Jefferson

SAN DIEGO, February 15, 2013 – American medicine will suffer untold losses of quality and many will die unnecessarily, not because we did not care but because we let power-hungry bureaucrats practice medicine without a degree. Nowhere is this more evident than in the ‘Affordable Care Act’ health care reform legislation.

In this column’s 2012 piece, Obamacare and the Federal Abuse of Power, the following points are made:

“At its premise, Obamacare claims that ‘universal insurance’ = universal access, but we know that this is not true. Obamacare further claims that the widespread use of ‘preventative care’ will translate into better health. However, as reported recently in the Wall Street Journal and elsewhere, the huge Cochrane study of over 180,000 patients (in nine separate research venues/studies) revealed that there was no benefit from routine, across the board, screening and exams.

Obamacare will dump millions into Medicaid. Government subsidies will translate into government approved ‘coverage’ and, after about a decade, most people in America will actually end up in some form of government-sponsored insurance plan. But, even in this grand new era of national health coverage, millions of Americans will remain uninsured and millions will lose their employer-based health plans altogether. Will Medicaid actually deliver on good medical care?

It is an accepted fact that, under Obamacare, premiums will rise. Medicaid roles will increase by an estimated 17 million people, and yet the money to support Medicaid (and doctors to see these patients) will not be adequate.”

Facts about Obamacare:

1.  Obamacare assesses 18 new taxes and penalties for a total of $836 billion in additional fees to consumers through the year 2022. Note that 70% of those paying the Obamacare individual mandate tax will actually earn less than the 400% FPL (Federal Poverty Level) and 10% of those paying the individual mandate will be below the poverty line.

2.  Cuts to Medicare from 2013 through 2022 will total 716 billion. These are comprised of a $269 billion cut to hospital services, $156 billion in cuts to Medicare Advantage programs, $145 billion to DHS payments and other Medicare provisions, $66 billion to home health services, $39 billion in cuts to ‘other services’, and $17 billion to hospice services.

3.  Beginning in 2014, there will be $106 billion in new costs to employer-mandated coverage; $102 billion in annual fees on health insurance providers, $55 billion in the actual individual mandate to buy health insurance; and in 2018 an additional $111 billion in excise taxes for ‘Cadillac’ employer health plans. From 2013 to 2022, 13 other taxes will add an additional $144 billion in taxes to consumers.

“Find out just what the people will submit to and you have found out the exact amount of injustice and wrong which will be imposed upon them; and these will continue until they are resisted with either words or blows, or with both. The limits of tyrants are prescribed by the endurance of those whom they oppress.”
— Frederick Douglass, civil rights activist, Aug. 4, 1857

At www.constitution.org, the following definition is offered for ‘usurpation’:

Usurpation is the exercise of powers by an agent which have not been delegated to him by the principal. In a constitutional republic like the United States of America, acts by officials are legitimate only if they are consistent with and based on a constitution, a body of laws which are superior to all subsequent statutes and other acts of officials, which embodies all delegations of power, and which may recognize certain rights to further define the limits on the powers delegated.

In an August, 2012 Forbes article, Grace-Marie Turner makes the following comment about the reliance of Obamacare on the questionably safe (or practical) expansion on Medicaid to care for the poor:

“Many states that plan to expand Medicaid under ObamaCare are those with low Medicaid reimbursement rates.  In California, for example, up to 1.6 million residents are expected to gain coverage under the state’s Medicaid program, called Medi-Cal, but fewer than 60 percent of providers accept new patients in the program.  That’s largely because California reimburses doctors 38 cents for every dollar private insurance pays.  New York, which is anxious to further expand its Medicaid rolls, pays doctors only 29 cents on the dollar.”

At the end of the day, our government has slowly eroded freedoms granted to us, as U.S. citizens, in the name of expansive ‘benevolent’ government. We are told that government controlled healthcare will improve our lives, but each new facet of the new health care reform law that is revealed demonstrates a different motive by those in power altogether—namely more control over the lives of American citizens.

The government has thrown enormous amounts of money at institutions and individuals and charged them with certain job-related duties, many of which have little if anything to do with the stated goal of their agency or department. Self-aggrandizement and personal career promotion many times have trumped decency, liberty and freedom.

The problems with Obamacare have just begun. They began by ignoring the will of a democratic majority, are now progressing to the phase of trampling on the rights of individuals who speak out or threaten the perception that the government knows what it is doing, and will end in a serious abrogation of personal, human, and civil rights.

“The spread of evil is the symptom of a vacuum. Whenever evil wins, it is only by default: by the moral failure of those who evade the fact that there can be no compromise on basic principles.” – Ayn Rand

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Doctor Adam Dorin is a private physician practicing in Southern California. His non-profit America’s Medical Society is dedicated to bridging the gap between government-sponsored ‘top-down’ dictates on health care politics and the common sense practice of medicine at the bedside. As a result of his outspoken activities and writings on healthcare safety and security, medical politics, and healthcare reform, Doctor Dorin has himself been the subject of government harassment and politically-motivated abuse.

Doctor Dorin and Howard Hyde met up at Dorin’s USC Obamacare debate to discuss strategy and shared concerns about the PPACA law …

Medicare, when proposed in 1965 was expected to cost $12 billion by 1990; it cost $90 billion in that year — seven and a half times more than expected (or more accurately, sold to the public). Medicaid was projected to cost $238 million per year. In its first year, the actual invoice came in at $1 billion — four times greater than advertised. The hospitalization program was supposed to cost $1 billion by 1987; instead the tab was $17 billion that year. The program has been expanded to the point of being 37 times more costly (inflation-adjusted) than originally sold.

Yet we are supposed to believe that we have an unfettered virgin market in health care ruled by the law of the jungle, that insufficient regulation is causing all of the problems and that the only rational solution is for the federal government to take command of a sixth or more of the entire US economy; a brand new, original idea.

Obamacare, being the most ambitious social entitlement program ever conceived, much less attempted in the US, will only magnify and multiply the failures of prior interventions.

The failures of Medicare, Medicaid and socialized health care systems around the world are not accidents, rounding errors or bad luck of unanticipated complications. Rather, they are the inevitable, predicable result of forceful interference in the voluntary cooperation of free citizens. Obamacare will fail for the same reason that the Soviet Union failed: command-and-control economies cannot function rationally.

When President Ronald Reagan famously declared “Mr. Gorbachev, tear down this wall” in 1987, few people believed that the concrete and razor-wire barrier separating the communist East from the free West Berlin, Germany, would in fact be demolished, liberating the citizen-inmates not only of the eastern sector of Berlin, but of most of Eastern Europe and Russia itself just 2 years later. But Reagan understood that a system conceived in the denial of individual liberty as both the fundamental moral principle of civilization and as the only rational basis for functioning economics, was doomed to collapse under its own weight.  He understood this in part because the downfall of the Soviet system had been predicted a few years earlier … in 1922.

Ludwig von Mises, the Austrian (later American) economist, demonstrated that socialism could never fulfill its promise no matter what variation was attempted nor how wise and virtuous the men running it.  In his book “Socialism” he demonstrated logically that every wage and price control, every tariff, tax, privilege, prejudice, manipulation and regulation that does notderive from government’s legitimate need to prevent and punish murder, robbery, assault, fraud, theft, rape, persecution and conspiracy distorts and destroys information necessary for rational economic planning and action. If some collective entity like the state owns or otherwise controls capital goods, land, natural resources, factories, machinery, services, licensing etc. then there is no market for these goods. There is no buying and selling, no bargaining and haggling, no competition to compel lower prices, higher quality, better service and the division of labor where each finds the role they are best suited to, and no supply and demand.

If there is no market then there are no prices in the real sense of the word.  Prices constitute the indispensable information system for signaling the needs and scarcities in an economy, and the cost of available alternatives. There are a hundred different ways to build a building, and dozens of alternative materials and techniques for each component. Which combination is the most economical? Who knows? Without prices, there is no way of knowing. There is no other metric that can adequately substitute for market prices. Economic planning cannot function without these numbers.

That is why socialism fails every time it is tried: Economic calculation is impossible under socialism.

And then there’s the bureaucracy, which von Mises also wrote about. With no markets there is no competition, neither incentive nor reward for better customer service or to provide a higher quality product at a lower price. The entire economy becomes like a giant Post Office or Department of Motor Vehicles, with self-serving, inner-directed bureaucracies with languages and cultures of their own, foreign to the rest of us, with iron-clad privileges, job security and pensions that do not vary with how well or poorly they serve willing customers.

As applied to the health care market, those same principles apply.  The more the government commands and controls services, insurance, physicians and other health professionals, drugs/pharmaceuticals, equipment like MRI machines, devices like defibrillators etc. then the less flexible and innovative is the market for these. There is: less buying and selling between parties commanding their own resources on their own account and for their own benefit, less bargaining and haggling (apart from government bullying from its position of monopoly power, as in price controls shrinking Medicare payment schedules etc.), less competition to compel lower prices, higher quality, better service and the division of labor and less operation of supply and demand.

Furthermore, this system leads to: the abolition of profit and loss, whether for providers, insurers or patients as legitimate regulators of behavior or scorecards of success or failure; a reduced scope of the operation of prices, therefore a breakdown of the indispensable economic information system of abundance, scarcity and alternatives; reduced possibility to recover research and development costs of breakthrough drugs (why bet billions when success makes you a target?). Shortages, waiting lists and government-imposed rationing of services, doctors, medicines etc. are the inevitable results.

With the market-based economic model suppressed, the only alternative is bureaucratic management based on politically-derived values. The opinions, concerns and desires of physicians, patients and families take a back seat to functionaries who are completely removed from personal economic or emotional involvement in the patient’s case. What matters to him is that he faithfully executes the rules dictated to him by the dominant political party and union bosses.

“Progressive” politicians love to feed on people’s resentment of “faceless” bureaucrats at private insurance companies as evidence of the failure of the free market. But when there is only one insurance company left, the government, with the right to tax you rather than face its own bankruptcy no matter how poorly it is run, people aren’t going to love that insurance company more than the few nominally private ones we have now. Even if private insurance companies survive ObamaCare, they will be taking their orders from the bureaucracy and the czars, not from patients, families and physicians.

Socialized medicine is not a new idea.  It has been tried again and again in many advance countries yet has never achieved results to compare with the relatively free United States. ObamaCare, the biggest such initiative of them all, will be the biggest failure. The most passionate sincere supporters of the Patient Protection and Affordable Care Act will be the most disappointed.

http://frontpagemag.com/2012/howard-hyde/why-obamacare-will-fail/