A letter to Michael Wolff of Vanity Fair

Mr. Wolff

I'm a busy physician and respect your writing. I hope that you'll appreciate the time I took to write this to you. I hope you can see a commonsense perspective that the vested interests in DC (both Dems and GOP) are missing.

I read your "I’ve Changed My Mind on the Obama-Fox Showdown" piece on newser.com. As an independent, I didn't vote for Obama, but I admire his concern for health care. And I think he has some good ideas. Of course the Republicans are all up in arms, but they had 6 years with a majority and never got a substantial bill to the table.

Yet, as a physician, I'm perplexed at why you would characterize the public revulsion to nationalized health care as 'perplexing'. Here's my opinion. It's because 'reform' is going the wrong way. It's not reform at all, but a government takeover. A better alternative would be increased government regulation and oversight.

You can cite polls to show public support for something, but this will vary based on how the question is asked. However, a stable trend this year has been seen in Gallup polls on this issue: 80% of Americans are happy (satisfied or very satisfied) with their current health care. A majority are concerned about the costs.

That begs the question of why we would want to muck up something that a super-majority are happy with? What we should be doing is fixing the costs--something that no bill that has made it out of committee in either house of Congress addresses. If you want to know what public opinion is, look at that poll. Most people are happy with their health care. The number one complaint I hear from patients is the cost of insurance. Number two is lack of access to care from my Medicare and Medicaid patients.

That's the essence of my argument. If you care to, please read on...

Everyone today thinks they are an expert in health care. I am an expert and certainly more of one than the people writing the bills. The public is rightly alarmed at what has been proposed as legislation this year. For example, HR 3200 was a slippery slope to a government takeover of health care. Why? If you look at that bill, it was crafted to force all employers with $400,000 or more in payroll to offer the public option or face a fine of 8% of payroll. Lots of businesses would be exempt, but it would move a large number of low wage earners into the public option.

Example: You're an employer like Walmart, McDonalds, etc. with mostly minimum or near minimum wage workers. So round their yearly pay to $20,000. Are you going to pay another $9,000-12,000 per year for commercial insurance, pay $1,600 for the public option or pay the fine. That's a no-brainer. Again, won't affect all workers, but it will entrench the public option (which will be a new entitlement).

In my opinion, what we need is increased regulation of the health insurance industry, rather than a government takeover of our multiple health care delivery systems. The federal government already has a proven track record in health care--a record of failure, namely 1) Medicare, 2) Medicaid, 3) VA and 4) IHS. Medicare and social security will both be bankrupt in the next decade. We don't have the funds to pay for our current entitlements and Congress wants to charge more to our national credit card? The worst part about the current Senate bill is it will add roughly 1 trillion to the budget, but it will still leave half of the currently uninsured still uninsured.

With the economic meltdown, people are realizing that politicians don't have all of the answers they say they do. They look at the bailout that was rushed through without anyone in Congress reading it. They see it hasn't worked where they live and now they see all the pork that was included in it.

There are many common sense solutions, most of which aren't even being discussed:

1. Tort reform--because the biggest driver of increase in expensive tests (other than shift in average age of population) is due to defensive medicine. However, this will probably never get passed since the vast majority of those in Congress are trial attorneys.
2. Make insurance providers compete across state lines--it's baffling that this hasn't been done.
3. Eliminate waiting periods--one of the largest chunks of people commonly lumped in as 'uninsured'.
4. Eliminate exclusion for preexisting conditions--duh.
5. Repeal nonprofit status for hospitals--these hospitals only provide <5% charity care, yet don't pay taxes due to nonprofit status.
6. Eliminate or reform Medicare D.

Thanks for your time.

Jim Webb, MD

Health Care Reform for Dummies

First, every crackpot in America has their own opinion on this, so I'm throwing my idea into the ring.

Here is my proposal.

Change the tax code to allow physicians and other healthcare entities to deduct their bad debt/losses from truly indigent patients.

Voila--doctors and hospitals have an incentive to provide free care (which isn't being done enough), and the uninsured and indigent can all get healthcare. And all without increasing taxes. I suspect that even for profit imaging centers would start providing MRI scans to indigent patients for the benefit.

How would we do this systematically to prevent gaming the system?

1. Set charges to a predetermined amount. This is so someone can't overcharge just to be able to write it off. The amount would have to be a ridiculously low amount, so I would suggest linking it to the Medicare fee schedule.

2. Services would have to be medically necessary (like Medicare).

3. Favor key policy issues, such as primary care and preventative services, with an incentive premium. For example, pay smoking cessation counselling, preventative check-ups, mental health services and similar items at a bonue of perhaps 110 to 150% of Medicare charges.

4. Cap the maximum deductible by dollar amount or percentage of revenue.

5. Repeal favored tax status for so-called not-for-profit hospitals and work in some parity for for-profit vs. not-for-profit and nonprofit hospitals (NPH).

Results
Since most primary care physicians tend to make less money than specialists, the actual tax revenue lost would be smaller than it appears. Higher income specialists wouldn't get to deduct as much.

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Example: Cap deduction at 50% of revenue.

For a family practice clinic that made $100,000 and provided 70,000 of free care, allow them to write off 50,000. They would be taxed only on $50,000. If they are in the 25% income tax bracket, that would 'cost' the government $12,500 to provide $50,000 of new health care.
That's $4.00 of free healthcare for every $1 tax cut.

For a surgery clinic that makes $800,000 and provided $600,000 of free care, allow them to write off 50% = $400,000. They would be taxed only on $400,000. If they are in the 35% income tax bracket, that would 'cost' the government $140,000 to provide $600,000 of new health care. That's $4.29 of free healthcare for every $1 tax cut.

For a typical non profit hospital that makes $100,000,000 and provided $6 M of free care, allow them to write off $3M. They would be taxed only on $97,000,000. If they are in the 35% corporate income tax bracket, that would 'cost' the government $3 million to provide $6 million of new health care.
That's $4.29 of free healthcare for every $1 tax cut. But better yet, since we're now taxing the hospital, it's new revenue of $34 million.
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Regarding parity for for-profit vs. not-for-profit and nonprofit hospitals (NPH). There are many ways to approach this, although I suggest removing the nineteenth century special tax status for NPHs, since nationwide they typically provide less than 6% charity care. This option has been more publicized in the media and is gaining some public support. It has been estimated that this step alone would provide about 12 billion in new tax revenue. For example, in Tulsa, St. Francis typically makes a profit of over $100,000,000 each year, but doesn't pay ANY taxes on that revenue--yes, that's 100 million, or 1/10th of a Billion.

However, since we are now letting all hospitals write off charity care, there should be a shortfall--there would be some decrease in revenue from for profit hospitals and increase in revenue from NPHs.

Like most physicians, I went into medicine to help others. However, because of the extremely high cost of practicing medicine (unfunded mandates, malpractice premiums, government bureaucrats), many doctors must limit the number of uninsured patients they take or not see them at all. Personally, I take anyone and am one of the few pain management doctors in the area that even takes Medicaid patients.

For example, I have never been sued and I don't practice in a particularly high risk specialty. Yet my malpractice insurance costs about $20,000 per year. That's a teacher's salary or a new care each year that goes down the tubes to companies like AIG, Berkshire-Hathoway, etc.

By enacting the above plan, even the most avaricious physicians and hospitals would have incentive to provide free and charity care. For those of us already providing free care, it would reward us for that and encourage us to continue.

As HB 3200 appears to stagnate and support for Obama's socialization of healthcare seems to be grinding to a halt. I suspect that a late night backroom deal will be rushed through by Democrats. This could be even worse than the current legislation.

If you think this is a good idea, share this post!

Thanks
JW

Wrong Reform: Targeting Physician Owned Hospitals

Healthcare in the United States is in a fiscal crisis. We can all agree on that. House Bill 2 is billed as funding healthcare for uninsured children. Everyone should be able to agree that we need this.

However, our congressfolk are up to their usual antics. This time, they have used this needed bill for their own political gain to tack on unrelated language aimed at shutting down the best hospitals in the country.

This added language in this bill has been thrown around by the big lobbying groups for so many times that last year they tried to add it to the Farm Bill! Now, however, the legislation intended to help needy uninsured children has been Washingtonized in an effort to outlaw physician-owned hospitals.

I don’t know about you, but if you’ve been a patient at a physician owned hospital and compare the experience to Not For Profit (NFP) Hospitals, it’s clear that the physician-owned hospitals are superior. Everything from the medical care to the appearance of the facility is measureably better in a physician owned hospital.

For example, for joint replacement, Oklahoma Surgical Hospital gets the HealthGrades 5 star rating year after year. The NFP hospitals in Tulsa may are usually luck to get a 3 star rating.

Why? Simply because with the doctor owns the hospital, they buy the best equipment. When a big box corporation (or the Vatican)runs it, there is no incentive to provide the best patient care and you have lackluster equipment.

Also, when the doctors own the hospitals, they pay the nurses and other real hospital staff more. At NFP hospitals across the country, for example, nursese and other staff are underpaid and overworked.

The worst part? The so-called Not For Profit hospitals don’t pay any taxes at all. Some NFP hospitals in the Tulsa area include St. John and St. Francis. For example, St. Francis usually makes 40-90 Million dollars in PROFIT each year, yet don’t pay any taxes on this income because of their so-called Not For Profit status. Want to talk about your tax loopholes! For many of the NFP hospitals, the money goes out of the community to corporations in other states.

Not so at physician-owned hospitals--these hospitals pay taxes, supporting the communities that they operate in.

Lastly, The NFP hospitals want to tout that they provide all of the charity care, but in actuality, less than 5 percent of their care is actual charity care. And we the taxpayers give them those big breaks when more than 95% of the care they provide they get paid on.

So in summary, NFP hospitals make tons of money that isn’t taxed (i.e., doesn’t support the economy), provide inferior care for doing so. They make millions each year that they don’t pay taxes on because of loopholes, yet they refuse pay their nurses adequately or spend capital on needed improvements in technology.

Yet, the greedy NFP hospitals, backed by the American Hospital Association and their big healthcare lobbyists want to quash the only hospitals in their communities creating real value and delivering consistently outstanding healthcare outcomes (as measured by independent organizations such as HealthGrades). I encourage you to call both of your senators and encourage them to vote against the SCIP bill until the special interest language limiting physician-owned hospitals and benefiting greedy corporate NFP hospitals is rightfully removed.

For more information see the link below...

http://sev.prnewswire.com/health-care-hospitals/20090115/LA5924115012009-1.html

Overview

This blog focuses on American healthcare system, it's problems, it's positives and some of the real problems it faces.

For years, everyone in Washington has been faced with the facts and chosen to ignore them. Healthcare funding in the US is in crisis mode because of pure demographic numbers--there are more older people in Medicare than there are younger workers to pay for Medicare.

Our Congressfolk, presidents and beaurocrats have ignored this problem because they didn't want to deal with it. I can understand it because it can't be dealt with by our government. Our government is too slow, to mucked up in red tape to help. Now, we're told that the answer is increased regulation.

The problem is that government regulation is what is causing our healthcare system to deteriorate. There are too many restrictions on doctors and hospitals. Our Congressional leaders are more concerned about passing new pet regulations for their big contributors than to listen to common sense people in the field.

That sounds dire, but there is hope. In this blog I hope to outline some clear steps that our country can take to improve the system and prevent a healthcare armageddon.