Boy, Republicans passed one really nasty tax bill!

The Thinker by Rodin

I mentioned recently about the audaciousness of the new tax bill expected to become law soon. Some years back I also mentioned that Republicans are basically sadists. This newest version of the bill that passed Congress this week proves Republicans have doubled down on both their bill’s audacity and its egregious sadism. I really hope they don’t believe their own rhetoric that this will actually grow the economy and make the middle class prosperous, since all previous attempts have proven trickle down simply doesn’t work. So I prefer to believe they are simply mendacious.

Apparently the House-Senate conferees decided to go through the bill and look for ways to make their tax bill even more in their favor and to screw the working classes even more. Now there are new tax break for real estate investors. It’s hard to believe Trump and his cronies didn’t phone this one in, not that Trump was not going to profit handsomely even before the addition of these provisions.

This bill has all the hallmarks of legalized bribery. Basically it’s a scheme to foist $1.5T in new debt on the American taxpayer and redirect the vast majority of this debt directly into their pockets. It’s like going to the Federal Reserve, taking $1.5T out of their vaults and doling out $1.4T of it to rich people and corporations over the next ten years.

Ah, but not for us little people. They have dangled some candy in front of us, but those who taste it are going to discover its initial sweet state will soon turn bitter. Consider:

  • You may pay a few hundred dollars less in taxes per year over the next ten years. But by getting rid of the individual mandate, the rising cost of health insurance premiums are going to quickly negate any of this extra money. After all, it’s not how much you are taxed; it’s how much you keep. Those who figure they can’t afford health insurance will opt out now that the penalty for not having insurance has gone away. These are illusory savings. Medical debt is likely to wipe out any savings they accrue by dropping health insurance. As for the rest of us with health insurance our costs will go up and up until we too decide we can’t afford it either, leading to ever-higher levels of working class impoverishment. This makes a lot of sense though if you are sadistic, and Republicans are sadists.
  • As a Disney heiress points out because of “pass through” provisions in the bill her income (none of it earned) will be taxed at a rate lower than most you saps who must work for a living. This is not entirely new. Those living off of capital gains and dividends have been tax-advantaged over those most of us who earn wages for a long time while doing nothing to earn it other than occasionally discussing their portfolios with their financial adviser. This just widens the hole. Remember how Trump was going to drain the swamp? He’s making it deeper. However, this makes a lot of sense though if you are sadistic, and Republicans are sadists.
  • Remember that Alternative Minimum Tax that made sure that many of these loopholes for the rich were mitigated by requiring them to pay at least some reasonable tax? It’s gone. Oh, and fewer wealthy people will have to bother their executors with the duty of paying estate taxes. The estate tax limit has been doubled meaning more money will go to their kids who earned none of it. Leona Helmsley once famously said only the little people pay taxes. Republicans are proving her right. This makes a lot of sense though if you are sadistic, and Republicans are sadists.
  • Why do Republicans hate charities? The charitable deduction is effectively gone for most of us, because they have doubled the standard deduction. This dries up any incentive other than pure kindness and a philanthropic nature for anyone but the richest to give any money to charity. If I had to guess we’ll see a lot more money going to Koch-funded charities and a lot less to the American Red Cross. It’s a likely red alert for charities across the country, who can almost certainly count on fewer donations in 2018 and basically forever. But this makes a lot of sense if you are sadistic, and Republicans are sadists.
  • Republicans don’t like blue states. How dare they vote for people they don’t like! Now to add insult to injury by capping deductions for property taxes they are effectively screwing the bluest of the blue states. States where property values are high (predominantly blue states) charge the most in property taxes. Since most states base state income taxes on the adjusted gross income on your federal return, this effectively cuts revenue for these states, which means fewer state services like money to public schools, police and food stamps. Blue states already send more federal revenue to red states than they receive. This actually makes it worse, and makes it permanent. This makes a lot of sense thought if you are sadistic, and Republicans are sadists.
  • Who doesn’t like teachers? Republicans don’t, perhaps because they suspect them of teaching subversive liberal ideology. Anyhow, our teachers who are already vastly overworked and vastly underpaid while serving an incredibly vital role in our nation’s future prosperity and going to be screwed some more. The expenses they paid out of their own pocked for school supplies for their own students that their own school districts were too chintzy to pay are no longer deductible. Apparently, Republicans loathe teachers and look forward to future generations of even stupider Americans. This makes a lot of sense thought if you are sadistic, and Republicans are sadists.
  • Apparently Republicans also hate people with business expenses. It used to be that you could deduct these expenses in excess of 2% of your AGI. That deduction is gone with the wind too. So if your employer does not reimburse your business expenses, essentially Republicans in Congress have reduced your salary. This makes a lot of sense thought if you are sadistic, and Republicans are sadists.

There are also indirect ways the bill will further screw over the rest of us. Republicans are already making noises about how the $1.5T deficit that’s part of their tax reform means we need more austerity because … omigosh, the deficit’s so high! They obviously won’t repeal their tax cuts or defense spending so they are talking about “entitlement reform” instead. First out the gate will be automatic cuts to Medicare that will start in 2019. These would start on January 1, 2018 but Trump will wait until January 1 to sign the bill so these cuts start in 2019, conveniently after the midterms. Update: reports are that Trump signed the bill today so presumably that means Medicare cuts would begin in 2018, not 2019.

Thankfully, Americans aren’t nearly as stupid as Republicans think that we are. This is borne out by polls that show the law is deeply unpopular, in spite of the fact that most people will initially pay fewer federal taxes. It’s the most unpopular bill polled in the last forty year.

They will get their comeuppance next November 6.

At the health care inflection point

The Thinker by Rodin

Back in January I mentioned a mindful eating course I was enrolled in. A full discussion of the course is probably for another time if I think it warrants a blog post. (I’ve become pickier about what I blog about, as I post less frequently and am trying hard to make my posts more relevant and topical.) One of the interesting takeaways from the course though was to learn to trust your body.

It turns out this is a really hard thing to do, particularly here in America. For most of us spend lives trying to respond to conformance requests coming mostly from outside ourselves. It’s constant and incessant. In the area of eating, you get endless “shoulds” and guilt-laden advice about what to eat, when, how much and using which techniques. These techniques rarely work in the long term because they are not natural to us, which is why so many of us are overweight and obese. Trusting to your own inner wisdom shouldn’t be hard, but it is hard because we simply don’t know how.

Of course it’s much more than food. We spend much of our lives being inauthentic to ourselves. We pray to gods we don’t really believe in. We chase after status symbols thinking we’ll be better or happier when we possess that McMansion or that BMW. We take advice from popular people in our class or some loudmouth on the TV or talk radio thinking they are actually wiser than we are. More topically, we vote for people who don’t have our best interest at heart, ending up more unhappy and miserable as a result.

We do this at least in part because we’ve learned that to get along you got to go along. We want to belong and since most of us don’t have local tribes anymore, we join our virtual tribes instead. They are often led by people looking to screw us over, if not monetarily then at least mentally. Facing the reality of our bad choices is hard. If we were to face them, we would often realize we were played for a fool. So rather than face them we continue to work against our own self-interest.

Logically most of those who voted Republican or for Trump should be regretting their choices. Many of them are but of course even Trump has a dependable group who will stick with him no matter how much he sticks it to them. As I noted recently, ninety percent of Republicans voted for Trump, despite knowing full well what he was about: a bankrupt-prone, pussy-grabbing businessman with zero common sense and a racist streak a mile wide.

It seems though that many who voted for Republicans are waking up. We see this not in a pressing desire to vote for a Democrat, but in polls showing waning enthusiasm for their fellow Republicans. There are other polls that show even majorities of Republicans disapproving of their party’s actions. Both the House and Senate health care “reform” bills are widely despised, even among Republicans.

Trump ran partly on a platform of reforming health care. It would be easy to reform he told us, and you would get better coverage for less. Whereas the sad reality is that Trump really has no idea what’s in the bills he has been promoting, other than he heard the House bill was “mean” so he instructed the Senate not to make their bill “mean”.

Trump is not being mendacious; he is simply unable to absorb detail. But if the Congressional Budget Office is to be believed, either 22 or 23 million people will be uninsured within ten years if either of these bills become law, with 14 million losing health insurance within the first year and likely a majority of them will be Republicans. Those with insurance will pay a lot more, both in higher premiums and higher deductibles. Technically these don’t amount to higher taxes since this money is not going to the government. If it did, it might buy something useful. It will feel like a tax hike however as your standard of living rapidly erodes.

If either of these bills becomes law, it will be a disaster. It certainly will be for those losing health insurance. The reality however will be much more brutal. Health care spending is a huge part of our economy. It will close hospitals, mostly in rural areas. Without insurance people won’t see doctors, so doctors will bill fewer hours and make less money. The cost of emergency care will be foisted on those still with insurance, raising the cost of insurance even higher. It will have a huge cascading effect of not only people dying prematurely and in misery, but in creating huge amounts of medical debt and lost health care jobs. It will careen like a locomotive off its tracks and wreck much of our economy. It won’t affect just the healthcare industry, but all those businesses that depend on health care employees and health care spending, which is most of the economy.

All this is to give huge tax cuts to the 1% who don’t need the money. Arguably the taxes these rich people pay pay for themselves in sustained economic growth, which is keeping stock prices and their portfolio rising.

Some lessons for me:

  • Our current healthcare system must be fundamentally changed if it is to survive at all. The current system works poorly, but it works a whole lot better than it will if either of these bills pass.
  • It’s really in everyone’s best interest to reform our health care system, as it is unsustainable. If there is any industry too big to fail, it’s not on Wall Street but our health care system. It feeds off patients. And patients need insurance to see doctors because only the top 1% can pay for their own healthcare.
  • Obamacare is dying, but not for the reasons people think. It’s dying because it tried to work using a system of private insurance. It’s the private health care system that no longer works as it puts profits first, not people.
  • Expanded Medicaid is demonstrating to new generations that socialized medicine does work. Ask most of Mitch McConnell’s constituents, who are on the program. Only to them it’s something called KyNect.
  • Like it or not we are at a health care inflection point. We must solve this fundamental issue in the only way it can be solved: through comprehensive national legislation that addresses its critical defects. Obamacare does not need amending. And it needs to be replaced with something that is the complete opposite of what both bills in Congress purport to call “health care”.
  • My life, and yours, depends on us rising to the occasion.

Medical robbery

The Thinker by Rodin

Apparently it’s quite legal to get away with robbery in the United States, at least if you are a health care provider.

I imagine the health care providers don’t see it this way when they send you threatening bills saying you owe tens, hundreds or thousands of dollars. Curiously most of us don’t know we are being robbed. That’s because we naively assume that being legitimate businesses they would not rob us. We assume whatever they put in the amount owed we must owe, so we better open up our wallets and pay up. Payment is always due upon receipt.

Not all health care providers try to rob you, but a lot of them do. When you press them on it, like I did today, they will say it’s a small mistake. However, if you pay their amount due which is more than you actually owe, you are unlikely to hear a thing. They consider it a bonus for services rendered. Thanks! I guess it helps pay for those large country club fees.

Just in case it isn’t clear to you, if you are insured you owe a provider exactly what your health insurer says you owe them. This is usually a copay. Particularly at the start of the year there are deductibles that you have to meet. Thus you end up paying for a lot of it out of pocket anyhow. So near the start of the year, you may owe a $30 copay, and $200 because that’s how much the agreement between your health insurance provider and your service provider specifies. So you may be out of pocket $230 and after you hit your deductible, the next visit is just for the $30 for the copay.

What a lot of health care providers do though is they bill you for the list price of the service. So if their rate for an uninsured person is $300, you will get a bill for $270, which is $300 less the $30 copay. Or maybe you hit your deductible and they will bill you for the $70 and see if you pay up.

This has happened regularly in our household but particularly this year as my wife had an expensive operation in March. Upon release she ended up in the emergency room to deal with a postoperative condition. Blizzards of bills soon arrived, and some arrived a month or two later. There is the surgeon. The hospital. The anesthetist. There were bills for Tylenol and replacing bloody gauzes that needless to say far exceeded the price for similar stuff at the local CVS. Payment was due on receipt, as if I had thousands of dollars of spare cash just lying around. Thank goodness I didn’t pay their ransom demands. In the case of one procedure they said we owed $3000 while the insurance company said we owed $0.

What you owe is what your insurance company says you owe, not a penny more or less. That’s why they send you those statement of benefits. Unfortunately, it’s not always easy to play mix-and-match with these dueling statements. Doing it though is critical, unless you are happy to give health care providers gobs of extra money rather than bother to parse through all this stuff.

In our situation with all these disparate bills it was pretty challenging, not to mention frustrating. After a while I moved from frustration to anger. First, how dare they bill us for services beyond what they are legally owed! This should be medical fraud, but I’m betting it’s not simply because I’ve never heard of a case (outside of fraudulent Medicare billings) of providers doing this. It happens all the time! If we are typical, about half of our medical bills make demands for more money than they are entitled to receive.

Second, why don’t they wait until they get a response from the insurance company before sending these bills? Many do of course, but a lot don’t. They just send their ransom demand that they purport to be a set of legitimate charges. What you should do is wait to hear from your insurance company and then send any additional money they say that you owe. It’s not like these providers don’t know we are insured. Every one of them won’t even see you until they get your health insurance information into their system. They even copy my insurance card and license because, you know, I could be a deadbeat.

Third, they bill for all sorts of dubious crap. I went to see a local urologist recently because as a middle aged man I suffer from a temperamental prostate gland. It was a routine visit. I saw the PA (Physician Assistant) instead of the physician. There was no special test this time, no flow test to see how quickly I could urinate. They did test my urine then they did an ultrasound to see how much I retained. They billed not just for the ultrasound but also for “medical supplies”. That was for a dab of that jelly they massage into your skin before the ultrasound. This required me to later write a check for $6 to cover it and also a stamp to mail it. It amazes me that they have the audacity to bill for these minor things and annoys me that my health care provider considers it a valid expense. This is the cost of doing business. Moreover, I was billed as if I saw the physician, not the PA.

Fourth, they don’t like to take no for an answer. A month of so back I got a ransom demand from the physician that saw my wife in the local emergency room. I sent them back a check for what I actually owed, along with a statement from my insurance company saying what I owed. Today they sent me another statement for the difference. It took a call to their billing department (and patiently waiting on hold for a while) before they agreed I didn’t have to pay the amount which I had already documented to them!

I hope you won’t put up with it because all these billing errors/extortions just subtract from your fragile bottom line. It could mean you can’t afford that daily trip to Starbucks or you can’t add that extra principle to your next mortgage payment.

It should go without saying that our current health care system is a really crappy system. It’s great that twenty million people are now insured who weren’t, but doubtless they are going through this crap for the first time too, trying to parse through its pointless complexity. I suspect it costs all but the most vigilant families at least hundreds of dollars a year. Those who need more services are probably paying thousands of dollars unknowingly than they should.

There ought to be a law and maybe there is one. If so, I’d like to see it enforced just once. I can send local investigators plenty of leads.

Open season on a fixed income

The Thinker by Rodin

It’s open season time and you know what that means. For most of us it means not bothering to take the time to see if there is a better medical, dental or vision plan out there. And by “us” I definitely mean “me”, at least until this year. Although I retired in 2014, I was working for most of it so it was easy to go on autopilot in 2015.

This year though I am fully retired and living on perhaps seventy percent of my previous income. This year although our expenses have gone up, for some reason my fully indexed cost of living pension won’t be, a factor somehow of falling gas prices. I’m not alone. Lots of pensioners and social security recipients feel like they have been cheated. The problem is that the official cost of living index is bogus. While I might spend a couple of hundred dollars less in gasoline this year than I did last year, food prices have gone up and eating is not optional. If prices are holding steady, the word hasn’t gone out to my city. The real estate assessment was $15.80 per thousand dollars of assessed value this year. In 2016 it jumps to $16.16. Moreover I just bought a new house for about $486,000 but it’s been assessed at $500,000. This means we need to pay $401 more just in property taxes yet with no increase in income.

So value is becoming more important. We’ve been on Blue Cross for more than a decade, but Blue Cross too is tightening the screws. With no changes we would pay over $650 a year more in premiums. Copays have been increased as well, up $5 each for primary care and specialists. We (my wife in particular) see lots of doctors. It’s not hard to rack up a hundred visits between the two of us per year. We could easily spend another $1000 a year on health costs next year for no increase in services. We would have to do this with no cost of living raise.

Thus I felt I no longer had the luxury of inertia. As I started to examine my options, I quickly realized why I had punted all these years. It’s because while choice is good in theory when it comes to health insurance it is mind-numbingly exasperating and time consuming. It’s something of a crap shoot as to which plan offers you the best value, since you have no way of knowing how much care you will actually need. About all you can do is use past years as a benchmark, and that means analyzing all your health expenditures. (Note: if you are a federal employee, federal annuitant or survivor of either, Checkbook has a useful guide that costs less than $10 that can help a lot.)

Since I spent a day just analyzing health insurance options, it’s a good thing I am retired. I doubt I would have this sort of leisure if I were still working. I had to sift through the details of all the various plans and see if I could find some magic combination that is not overly expensive, rated reasonably well and with most of our doctors “in network”. I had to analyze premiums, deductibles, copays, limitations on types of services, and which of our doctors were on each plan. I’m still not entirely clear which plan offers the best value, but it’s pretty clear it’s no longer Blue Cross.

I can also change my dental insurance and add vision insurance during open season. I already have a long term care policy, but no insurer would insure my wife so when that time comes we’ll have to depend on savings. Which opens up another can of worms that retirees have to grapple with. If you have some major and unplanned costs, where do you get the money?

Since we recently settled on a house a lot of our reserves have gone to pay lawyers and other busybodies. We’re hardly without savings but if I had to put my hands on $75,000 or so in cash it would be a challenge. A 401-K or IRA is not like a faucet that you turn on and off at whim. You generally get just a one chance a year change to adjust the spigot – during open season.

We supplement my pension with a modest monthly withdrawal from my 401K. On the advice of my financial adviser, I’m limiting withdrawals to 3% of the portfolio. This will in theory keep our nest egg secure, not growing in value (over inflation) but not losing value either. I can up the withdrawals to say 4% and slowly build up cash reserves at the expense of paying more income taxes and a smaller portfolio. I can hope no major expenses like this happen. I can get another home equity loan and use that when needed, but that money certainly won’t be free. The other alternative is to get another job, something I’d prefer to avoid since leisure is the whole point of retirement.

Since when you are retired you can’t easily change your income and expenses are hard to control sober retirees have to look forward a lot. Our new house is nice but like every other house it will move toward decay. We’ll eventually need money to replace the air conditioner, roof and buy cars when the old ones expire. This didn’t used to be a problem. I had enough income where I could pay for most of these expenses out of pocket or from our savings account. Now I have to anticipate them.

Unable to think of a better strategy, I looked at what these expenses cost us before. I made some realistic estimate of when these expenses would hit and what they might cost then with inflation. So I’m setting aside some of our income to draw from for these expenses in the future. It’s not an exact science, but it’s a start. It’s also sobering. I’ve created a car replacement fund assuming we’ll buy two cars for $25,000 each in today’s dollars, one in 2019 and one in 2023. To reach the goal I must place $481 of our income monthly into an escrow account. Similarly for all these future house expenses, I’ve created a capital fund. If my numbers are accurate, $343 a month set aside for these expenses should cover them.

All this is well and good but it leaves less money to actually enjoy your retirement particularly when your expenses go up when the government says they haven’t. Which is why I’m reluctantly becoming value-driven in retirement. Every expense needs a second look, including our health care costs. So I need to shop around.

As for health insurance, since I am an ex-federal employee I’ll probably bid adieu to trusty but expensive Blue Cross and say hello to the National Association of Letter Carrier’s plan instead. Lower premiums, lower deductibles, similar services and a reasonably good choice of doctors will probably go a long way to keeping these expenses unchanged in 2016. We’ll see. If not I’ll be crunching the numbers again in a year at the next open season.

Health insurance in the United States is needlessly complex. If there must be competition then the government should require that all plans offer the same services so we could shop around more easily. Or perhaps we could do what every other first world country does: create a national health care system. Then instead of figuring out how much health you can afford you could simply get the care you need instead. Sign me up for that!

Republicans can’t kill Obamacare

The Thinker by Rodin

One of the ironies of the Affordable Care Act is that Republicans were the ones to derisively name it “Obamacare”. So when it works, as it is going to, President Obama is going to get all the credit. This will make the Republicans look particularly stupid, not that they need a whole lot of help looking stupid lately. It might kill them as a party.

Perhaps it is the fear that it actually will work which is having them go into overdrive with desperate, last minute attempts to make it fail by convincing people not to enroll. They are doing so by refusing to set up state health exchanges but more recently by placing burdensome state regulations on Obamacare “navigators” (people paid to promote the insurance with uninsured communities) that effectively keep them from “navigating”. These tactics likely won’t work and worse are unconstitutional because of the supremacy clause to the U.S. constitution, not to mention the right of free association. Their hope is that by throwing sand into its engines before the courts tell the states their laws are invalid that it will cause the program overall to fail.

Good luck with that Republicans, because it won’t work. Granted, there may be some fits and starts to get the Affordable Care Act fully in gear. Whether or not navigators promote the law or not, it’s a straightforward matter for anyone who wants to get health insurance to acquire it: just get on line and sign up! On the national or state health exchange they can sign up for health insurance regardless of preconditions. If they don’t make a lot of money the government will subsidize some portion of their premiums.

The only ones to truly get screwed by Obamacare will be the working poor in red states, at least those red states like Texas which won’t accept Medicaid subsidies to expand the insurance pool. This is only possible, of course, due to the Supreme Court’s decision earlier this year that gave states the right to opt out of this part of the law. Now that decision definitely threw some sand into the Obamacare engine, but it was not fatal. It just meant that the poor, as usual, would continue to get screwed over in many red states. That will change with time.

So many ironies! It turns out that red states are essentially screwing themselves. By turning away free money to pay the medical expenses of their poorest citizens, these people will simply clog emergency rooms for costly “free” health care. This unofficial tax will be added to the price of health care services for the insured of these states, making their premiums proportionately higher than in states where Obamacare goes into full effect. This, in effect, makes blue states more desirable places to live because there is less health care cost shifting going on: health care expenses become more predictable. “Live free or die,” is the state motto of New Hampshire and by inference much of red America. But of course “freedom is not free”, as states like Texas will discover to their sorrow. The only interesting part of this exercise is how long they will hold out before they realize the futility of their own pigheaded stubbornness. There will be a whole lot of money that could have been used to build bridges and fund schools that will be needlessly squirreled away into higher health care costs instead.

This is because the whole point of insurance is to spread the risks, and thus the costs, lowering costs for everyone and thereby providing services that would otherwise be unaffordable. I don’t expect my house to burn down this year, so in the eyes of red America I am probably wasting money sending $600 a year or so to USAA. Essentially I am giving my money to someone else who will use it to rebuild their house when they have a fire. Of course should I have a fire, I’m out $600 in premiums and likely some costly but not catastrophic deductibles. But I am not left to rebuild my house with money from my savings account or using some loan that is based on my creditworthiness. $600 seems amazingly cheap for this investment of $500,000 or so. Essentially I pay .12 cents per dollar of the house’s value so I don’t have to pay to rebuild it in the event of catastrophe.

The same idea works with health care costs, of course. Only a very stupid wage earner when they measure their potential financial shock without health insurance will pass it up if they can possibly afford it. And with subsidies, they will be able to afford it, well, unless they make so little they count as working poor. If the states won’t take the federal money to insure these people then these low-wage workers will get screwed if they develop a costly condition. Many of them will die prematurely, but most will linger in pain and in poverty while racking up huge hospital bills that they cannot pay, but whose costs will simply be passed on to those who can: the insured.

Anyone who can possibly afford insurance is going to want to get it, and if they think they cannot they will find the cost of dodging it will increase every year with fines collected on their federal income taxes. At some point they will say, “If I am going to spend this much money not to be insured, maybe I should just be insured.” For now, these red states are hoping that ignorance will kill Obamacare. Keep the cheap to insure out of the market and it raises premium costs for the rest. In short they are betting on ignorance, hence their obsession with keeping “navigators” from navigating. It may work for a short while, but not forever, and if it works it will be locally, not nationally. Eventually some peer is going to tell them that they are insured now and it only costs X dollars and they are being subsidized with Y dollars of free money. It’s like a 401K employer match. Free money will get their attention, so let’s hope those navigating the navigators tell them to pitch it like this.

Despite attempts by some states to “overturn” Obamacare, it cannot be overturned by a state’s fiat. It is a done deal, a law largely upheld by the Supreme Court. It can only be repealed through an act of Congress signed into law by the president, or by a Congress that overrides the president’s veto.

It’s just like that scene from the movie Lincoln when, after the passage of the 13th amendment Lincoln meets with the vice president of the Confederacy who is making peace overtures. “Slavery,” President Lincoln informs him, “is done. Finished.” Check and mate! The Affordable Care Act is finished too. It can’t be overturned because it wasn’t overturned. Certain red states will screw themselves for a while as they try to make it not work in their states, but it won’t work nationally. Obamacare is done. It is potentially possible to repeal it, but it won’t happen without a Republican House, Senate and White House, and only if there are sixty or more Republican senators. In reality, at this point it can only be amended, and by amending it, it will only be strengthened, not weakened.

Obama may screw up his legacy by sending missiles into Syria to avenge the use of chemical weapons by its government. But he won’t screw it up through Obamacare. Ten years from now most people even in red states will be scratching their heads wondering why they opposed it in the first place. They probably won’t like paying their health insurance premiums and copays too much. I don’t like paying mine either. But I do like knowing one costly illness won’t wipe me out financially. So will millions of Americans simply trying to reach old age in a state resembling solvency.

Perhaps the most ironic part of Obamacare is that Obama will get credit for something he largely did not contribute to. He basically said he was for the idea of national health insurance but left the details to Congress. The Affordable Care Act was what emerged. Republicans named it “Obamacare” to tar it to President Obama, who they obviously loathe, and the frame stuck. Even the president now calls it Obamacare. It will be seen as the major accomplishment of his term of office. At least President Franklin D. Roosevelt truly instigated the New Deal. Obama, the man Republicans love to hate, will be gratefully remembered for Obamacare in the generations to come. He will wear laurels placed on his head by Republicans, who thought they were putting on a crown of thorns.

The real credit for the legislation though should go to the Democrats who controlled Congress at the time. Senator Harry Reid and Speaker Nancy Pelosi should be wearing those laurels, but also the sixty Democratic senators who, as a block, held themselves accountable when push came to shove and overcame cloture in the Senate. It was an improbable act of great bravery. Sadly, their contributions and these moments will be largely footnotes.

Solving the medical forms hassle

The Thinker by Rodin

Seven years ago, I suggested that the ubiquitous thumb drive should become our electronic wallet. You would simply plug it into the point of sale device, authorize the transaction (a PIN is acceptable, but a thumb scan would be better), and an electronic receipt would get stored on the device. The receipt could later be imported into your personal money management software, such as Quicken, for automatic categorization, giving you better insight into your spending.

Some years of experience using thumb drives regularly shows that it is not the ideal device for an electronic wallet, in part because the USB terminal can wear or tear, rendering the device useless. Today, a smart card might make more sense because it would fit in our wallet right where the credit and debit cards go. My point was that to be useful the device would show you your balance at a glance, and it could receive as well as send data. Today, the device could also be network aware, making secure connections to your bank periodically to get the latest balance. You might call it a smart cash card.

A few weeks back I had an annual physical. As is typical of someone fifty plus, I left with a stack of prescriptions and referrals. As a consequence, I have since been making my way to various specialists. Yesterday I visited an endocrinologist, who was examining some minor cysts in my thyroid. Naturally before I could see him I had to go through a daunting process of filling out four pages of forms, listing for the umpteenth time my long and tedious medical history. I am sure you have had the same experience many times. List all your medications and dosages. List all your surgeries. List current and past conditions that you have had, including hospitalizations. List your family’s medical history, parents and siblings. Provide an emergency contact. Oh, and don’t forget your name, address, phone numbers (home, cell and work), email address, date of birth, social security number, current employer, current employer’s address and phone number not to mention, of course, your almighty health care insurer, their phone number, your policy number and your group number.

As someone who works in information technology, filling out these forms repeatedly is an obvious problem that should just be solved. Yes, as part of the Affordable Care Act, health care providers are being nudged into electronic medical records. I can understand the reluctance of doctors’ offices to go there, given the voluminous information they collect and the chance of clerical errors. Still, much of the information is route and common. It could be provided by the patient in an electronic fashion very easily. All it needs is a law to make it happen.

This is a job for government, not to make such devices, but to set standards for them and to require health care providers to accept them. Such a government standards entity already exists:  the National Institute of Standards and Technology. Other agencies, probably the Department of Health and Human Services, through regulation could require health care providers to accept electronic data provided by the patient in lieu of filling out those awful and painful new patient forms.

Here is how it might work. Next time I visit a new doctor, I would take out my medical smart card. It would be more than an electronic wallet, but also have my medical history. I would wave the smart card over the card reader at the receptionist’s desk and it would ask for permission to transmit certain types of data. Ideally, it would show me on a screen all the information requested. I would be able to change it (in the process changing the data on the card, since it would be inaccurate) or blank out fields I don’t want to share. I would then give my permission to share the data using some sort of authorization mechanism. Ideally I would do this by pressing my thumb on a spot on the card. However, a PIN or retinal scan might be okay as well.

There are devices out there that get part of the way there. For example, MedicTag is one of a number of devices that puts your medical history on a USB drive that you wear at all times. The problem with devices like this is that there is no guarantee that your health care provider will even think to check for the device. Even if they can, there is no standard for encoding the information so that it can be easily read into a provider’s health care database yet stay secure. To make sure that the data can be read in an emergency, it is likely unencrypted. Worst of all, since most health care visits are not for emergencies, then routine trips would likely require you to fill out paper forms anyhow. Certain providers, principally emergency rooms and ambulance companies, would have permission to read your card without your authorization.

I would bet that most health care providers would be glad to install devices that could read structured medical information from these devices. They would quickly pay for themselves in productivity savings and accuracy of these data. Most health care providers already have a records management system, generally Medics Elite. These companies would find plenty of incentive to build software for point of presence terminals to collect the data.

I am sure that a smartphone could be configured to do this. It can already be your electronic wallet. That seems to be the thinking behind Google Wallet, but so far vendors have been lukewarm embracing the technology. Doubtless apps could be created that would comply with any NIST standards for sharing medical information. With cloud services now becoming standard, most of us would be glad to pay a reasonable fee to have our medical and other private information backed up in the cloud, in case we lose the smartphone. The real problem is that there is little in the way of standards for transferring frequent medical information, at least from patient to provider. This is why we need the benevolent hand of government. Once standards are in place and providers create interfaces, any number of vendors could compete to provide devices and apps to make this a reality. Just as many of us now have electronic boarding passes that are scanned off our cell phone, there is no reason why the same data could not be transmitted using an infrared or wireless connection, once authorization is granted.

As an aging human being who doubtless has many hundreds or thousands of doctors’ appointments ahead of him before I die, a device like this cannot come soon enough. After all, as you age you realize time is short, and you can save heaps of it not filling out redundant medical forms.

Some ways to cut medical costs

The Thinker by Rodin

Are we paying too much for medical treatment? Ask a physician and they would probably tell you that you are not paying enough. Ask the rest of us and we would say, “Hell yeah!” One clue that physicians may be myopic on this is to compare how much Americans pay for health care vs. other countries. In general, Americans pay much more money for inferior outcomes.

It’s well known that a lot of the money we spend on health care is wasted on unnecessary procedures and treatments. Other spending is fraudulent. Medicare is a fee for service insurance program. All sorts of fraudulent and fly by night outfits bill Uncle Sam for bogus, superficial or overpriced treatments. These costs amount to billions, if not tens of billions a year. The problem is hardly limited to Medicare. The same is true in the private insurance market. I have a Blue Cross/Blue Shield standard option plan. My insurance company blithely went along with all sorts of medical treatment for me that turned out to be a waste of money. I had veins removed on my leg a couple of years back. Remove extra veins and the theory went the remaining veins would better take up the slack, relieving pressure on my foot and thus the numbness I was experiencing. My legs look great but the surgery had no effect on solving my problem. Indeed, it might have exacerbated it because I had to wear compression stockings for weeks after surgery. If you have a nerve impingement issue, this makes symptoms worse.

All sorts of parts of our medical system are ineffectual. We depend on physicians, but it is clear that many of them are ethically compromised. No doubt you have witnessed what I have seen many times in doctors’ offices. It’s amazing physicians can get any work done with all the drug representatives coming in and out of their office. Like Santa Claus they come loaded with Christmas presents, often including catered lunches for the doctors, but also plenty of drug samples for their pricey proprietary drugs. (I know this because I get reports from my wife, who works in a neurology practice and sees this happening regularly.) More than one physician I have encountered are on a first name basis with these drug company salesmen and women. This is not surprising since they see a whole lot more of the physician than I do.

A little legislation is in order. My physician suggested a statin for my high cholesterol. He wrote a prescription for Lipitor, which came with a $75 copay for me and costs Blue Cross hundreds of dollars for each bottle. He has done this for other drugs he has prescribed for me, even though I have repeatedly told him I prefer to start with a generic drug, and use a branded drug only if necessary. I am currently trying to get my Lipitor prescription changed to a generic. It may be that I need Lipitor, but I doubt it. I seem to have garden-variety cholesterol issues. I suspect that he prescribed Lipitor by default because of the Lipitor brochures in the examining rooms and likely on his desk. (I sometimes wonder if he is on the take, and gets a percent of any prescription he makes.) It rarely occurs to my physician to give me a generic drug. I’ll bet that your physician is the same way.

Only one physician I associate with has the presence of mind to start with a generic drug (my cardiologist). As a result my heart medicines cost about ten dollars a month instead of hundreds. No one seems empowered to tell physicians what they can and cannot prescribe. It is clear that many are in the pocket of drug companies. There needs to be a law: physicians must treat with a generic drug if available and escalate to a branded drug only for a compelling and urgent need, to be enforced by local medical boards. Moreover, the AMA should change their code of medical ethics. It should be unethical for physicians to meet with drug company representatives unless it is at neutral forums where counterpoint is possible. It should be unlawful to accept any of the bountiful gifts they receive from these drug companies either.

If we cannot enact common sense laws like these, then physicians offices should at least have a prominent policy statement in their lobbies saying how they interact with drug and similar medical companies, so patients like me can know in advance and maybe shop elsewhere. They should record and annually publish statistics on the companies that came to call, who they saw and what freebies they received from these companies. As consumers, we have a right to know if our physicians are being influenced. Right now we have to trust that the physician is looking out for our best interest.

Our primary care physicians must remain our speed dial, but it is clear to me that the primary care system is breaking down. PCPs are generalists by training. As medical knowledge has increased, it is clear that they can no longer sort it all out. What we need now are centers of expertise that can assist PCPs. A PCP would still be the one we would go to for physicals, urgent cares, cold, flus and the like. When an issue reaches a certain degree of complexity, the physician would elevate it to a center of expertise. I can use myself as an example. Both my vein surgery and tarsal tunnel surgeries were clearly a waste of time and money because they did not solve my problem. However, if it had been presented to a team of specialists (who should not be on the payroll of any health insurer), they might have had me follow a more logical course. They might have researched foot numbness like I had, figured out the tests I need, diagnosed sciatica as a likely condition and treated for that first, starting with physical therapy, then chiropractic therapy. My PCP suspected neuropathies and sent me to a neurologist. What I needed were teams of experts: a neurologist, a podiatrist, an orthopedist and likely others to put their heads together and present a step by step treatment plan, probably moving from most likely to least likely, based on my symptoms. My problem was beyond what my PCP could handle, beyond writing me referrals. Besides he had boatloads of other patients he also had to juggle.

The Affordable Care Act is moving toward elements of what I have in mind, which proposes outcome-based reimbursements rather than for a fee for service model. It all starts with a proper and intelligent assessment. The patient is the ultimate person that should approve final payment. Did the treatment solve his problem? Did the treatment persist?

A new payment model might look something like this. Unless the problem is simple enough that a PCP can handle it, the first payment would be to an outcome center for a treatment plan. It would be based on as complete a medical record as exists for the patient. The second would increase payment to 75% when the treatment plan is completed, with perhaps staggered payments if the treatment plan will require months or years. The outcome center would reimburse specialists as needed. The balance would be paid three months later when the patient certifies that the outcome was satisfactory. This would give everyone incentive to get the treatment right the first time. Moreover, physicians would begin to align themselves to meet the market for what are medical needs actually are.

There is no socialized medicine here. Those who want to see a specialist on their own would still have complete freedom to do so. The government would not dictate treatment plans or what are reasonable patient outcomes, although existing institutions like the National Institutes of Health can shepherd the creation and certification of outcome centers and best practices. Patients would get better, faster and more effective treatments. Physicians could take pride that they are doing what is best for their patient as part of a holistic approach. PCPs would find their jobs more manageable. Moreover, health care resources would align toward the efficient needs of consumers. Of course change is always scary, but changes like these are long overdue.