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We have received a large number of e-mails asking if we are soon going to post more information and descriptions of the ideas in the whitepaper.  Yes, we are.  We apologize for the delay. We have received a large amount of feedback via e-mail and are in the process of reviewing, categorizing and assessing the suggested edits, comments, additional ideas and questions as we move to the first revision of the whitepaper.

More articles, summary sheets and the next revision of the whitepaper will be posting in the next few days and weeks.  We also encourage you to comment on the summary sheets and articles at the bottom of the article so others can see what you think.  We thank you for your correspondence and your effort in helping us get a workable framework for better healthcare for all of America. Please continue to provide feedback and comment, and pose additional questions or points where you would like to see further clarification.


The ACA – ObamaCare is failing, and will surely fail, but not for the populist reasons being discussed so readily today!

Overview – Why We Still Need More Reform

We now expect significantly more from our country’s healthcare system – and by extension its governmental structures: federal, states and commonwealths – than we did at its founding. We no longer value the role of Benjamin Franklin’s style of “compromise though tolerance as we once did. Everything we now attempt to do becomes locked in an all-or-nothing outcome based approach. The latest healthcare legislation, and more recent proposals, can be seen as the culmination of this dysfunctional approach.

For a variety of historical reasons, all seemingly reasonable and appropriate at the time, we have adopted a series of modifications, often in the form of rules and laws, to try to affect corrections to one part, or another, of this non-system. All of these approaches, in the parlance of medicine, have affected the symptoms of the disease but they have not cured the underlying fundamental problems and have been doomed to fail.

In order to correctly define an effective, cost efficient, and appropriate healthcare system for all Americans, we must first address the fundamental issues, disconnects, and problems of our historical non-system. In order to begin to actually address the needed fundamental fixes – therefore deal with the disease not the symptoms – we need to first identify and agree on what the fundamental problems are. (For more detail see Article 1: Introduction to the Real Healthcare System, and other linked articles)

Overview – Marketplace Solutions

We believe we can find compromise that will yield a much simpler, stronger, efficient and appropriate system for Americans to get the care they need in crisis and the care they want by choice. It is in the assured concept of an effective safety net for all, integrated with American’s need for choice that holds the key. Both simply cannot exist without integration as they become predatory and consuming of each other. (See Myth 1 Healthcare Costs Too Much) They must exist in a manner that systemically provides certain controls, checks and balances. We must reset our own false expectations to better reflect the reality of the care that can be provided in order to minimize extraneous cost. (See Myth 2: Healthcare, It’s Good for What Ails You! & Myth 3: We Can, and We Should, Live Forever!) Price certainty, transparency, portability and effectiveness need to be codified as requirements of any solution. At the same time, effective allocation of appropriate regulation, oversight and responsibility at the federal, state and individual level also need to be integrated into any system. Any solution must provide an effective safety net for all the helpless while filtering out the clueless – who inadvertently and significantly increase costs and utilization of scarce resources – and the fraudsters – who purposely game the system in order to inappropriately receive disproportionate and unnecessary gain while also consuming available resources from those who desperately need them. Finally, the solution shall at its safety net, basic care level, provide the same access, scope and treatment options for all regardless of income or means with no additional hidden costs, taxes, fees or shifting of costs from one system to the other.

The core of the proposed system are two disparate market based systems that are tightly integrated with effective free market pressures, appropriate governmental monitoring, and combined checks and balances. The main core of the system is a basic LifeCare marketplace, focused on equal access, treatment, and affordable cost to all Americans. This is the prime source for all care needed to provide viability, and production. A second system provides for individual care wants, beyond basic care needs. This Quality of Life marketplace will be a distinctly separate mechanism of reimbursement, pricing and access to care, but both systems will be tightly integrated through a central point of access and administration that provides for full coordination of care and benefits across all available sources — as well as other benefits.

LifeCare Plan Marketplace

LifeCare Plans form the core of a marketplace and system to deliver our basic healthcare needs targeted at survival, viability and deliverable value to self and society. There will only be one type of LifeCare policy offered by every insurance company that chooses to be in the health insurance business. All policies, regardless of the insurer, will be identical in scope, extent of treatment and coverage. Each covered need will have a recommended best practice treatment guideline and published payment amount. With only rare exceptions, treatments will be standardized. Providers will not be bound to the recommended treatment and may alter the treatment at their discretion but the payment to the provider under the plan will remain the same.

The LifeCare Treatment, Practice and Payments Congress

Plan scope, extent of coverage, recommended best practice and payment pricing that constitute LifeCare needs policy limits will be set by a bi-partisan national governing body appointed by the various states – The LifeCare Treatment, Practice and Payments Congress – composed of representatives from the four key healthcare constituent groups; Participants, Facilitators, Providers and Sponsors. Guidelines for the definition of plan coverage will be established to ensure that the included treatments will represent effective care to assure viability and productivity. Treatment guidelines in LifeCare will be established to assure adequate coverage for all Americans and will be structured in a way to stimulate a practice modality and business model that is predicated on a high efficiency, high volume, and low cost, effective care delivery model. Since we are also integrating a choice based system, the LifeCare system can be appropriately restricted in terms of treatments and therapies more appropriate to selection and payment via physician and patient choice. Optional treatments and therapies can be accessed via the Quality of Life plan system.

Basic LifeCare Plans

Basic LifeCare plans can be purchased in any state or territory from any qualified insurance provider in the U.S. regardless of their state of origin. It is anticipated that once purchased, the basic LifeCare plan will follow the individual throughout their life and be the basis for all basic services received until their death. The current law that allows parents to maintain coverage of their children till age 26 will be continued. Individuals will be strongly encouraged – but not mandated – to purchase their LifeCare policy at the age of 27, or upon initially entering the workforce, whichever is earlier, through an integrated set of incentives.

Premium payments for LifeCare policies will be primarily established based on the age of the Participant at the time of purchase and the premium will remain the same as long as the policy remains in force and is not allowed to lapse. Should the policy lapse, due to non-payment, fraud or abuse, then the policy may be reinstated at a rate representative of the price based on the Participants age at re-enrollment. Material early purchase incentives will be in the form of the time based pricing model with significant increases in premium costs weighted in the first few years of policy purchase. All costs for LifeCare plan treatments will be published and standardized so there will be full price certainty and transparency. There will be no allowed rebates, fees or self-targeted taxes that backflow into the overall cost of care and obscure the true cost of care. All programs from all sponsors will be integrated into the LifeCare plan system through the national Single Point of Administration Full Coordination of Care and Benefits system discussed below. This will help make sure that all options for payment are coordinated and applied fairly and completely, based on eligibility criteria and constraints while reducing duplication of services, cost shifting and fraud.

LifeCare Safety Net Provision

The LifeCare solution is designed in a manner to provide affordable coverage, and the means to pay for this coverage, for most Americans though their earnings and/or an employer incentivized life health and wellness stipend system. Yet, it is clear that regardless of the incentives and encouragement, not all will be either able to comply, or in some cases act responsibly to obtain, and pay for coverage. The current healthcare system has significant cost drivers due to three prime cohorts, the helpless, the clueless and the fraudsters. An effective safety net must be established to cost effectively help the helpless, reduce the cost effect of the clueless and eliminate, to the largest extent possible, the exorbitant cost of the fraudsters.

People that are helpless, due to loss of job, income, or means to pay, are protected in this system. Should a person have a LifeCare plan or suffer a loss, or catastrophic event, that renders them unable to pay for their LifeCare plan they will become eligible for full or partial LifeCare plan premium support. Upon eligibility, they can immediately and automatically register their needs and apply for assistance through the single point of administration system described below to have their existing LifeCare plan premiums covered, in whole or in part, through one or more available Sponsors. Under the payer of last resort system, the federal government will act as the final backstop for all American citizens for LifeCare. There should be no reason for any LifeCare plan holder to ever have an interruption of coverage under this system. If responsibly managed, either by the Participant or their authorized Facilitator, LifeCare premium payments should continue with no interruption of plan benefits and no resetting of premium costs due to lapse of coverage for reasons of non-payment.

Except for the permanently disabled, or others the government designates as eligible, all individuals that receive federal premium support will receive the aid during their eligibility period as a loan until such time as they are no longer qualified as eligible. Upon regaining the means or ability to pay for their plans, or other loss of eligibility, individuals will be expected to begin repayment of the outstanding loan balance. Payments will be calculated and amortized across the remainder of the individual’s effective productive life.

Quality of Life Market

Quality of Life Care begins where the LifeCare plan ends. While the LifeCare system is predicated on high volume, highly efficient, pre-fixed low cost routine treatment modalities with some free market effects to lower cost, Quality of Life providers will evolve to be more market driven in nature. Quality of Life care will be where individuals get the additional care and treatment they desire based on their own individual priorities, desires and choice.

Quality of Life Providers will build their practices around the provision of value-based services to individuals above and beyond LifeCare basic needs services. The Quality of Life market system is designed to incentivize those that wish to practice in this value-based market to design their business model around the provision of a higher priced, potentially lower volume, high perceive value-based, more retail market-driven model.

Participants can choose to pay for Quality of Life Care services at the time of service through any means acceptable to the provider(s). They can pay for Quality of Life services through their tax free Life Health & Wellness Savings Accounts (see corresponding section in the hyperlinked whitepaper, also see Employee Health & Wellness Stipend section) or they can purchase Quality of Life Advantage plans from any qualified health care insurer. All insurance payments will be provided to Participants directly or through electronic funds transfer to their Life Health & Wellness Savings Accounts. In this solution, the Participant is always the center of any health related transaction whether financial, or informational.

Unlike, LifeCare plans where the premium cost is tied to the age of the policy holder at the time of purchase and remains relatively constant throughout the plan holder’s life, Quality Of Life plan pricing and terms will largely be driven by the free market. The exception may be in some constraints that may be established by the various states who choose to regulate additional services provided to their citizens above that which is provided by the basic LifeCare plans.

Single Point of Administration – Full Coordination of Care & Benefits System

We have spent in excess of $750 million in creating Healthcare exchanges at the federal level alone.   Recent proposals have advocated abandoning the exchange system altogether. This solution does not take that approach. It plans to preserve this investment and repurpose the infrastructure, much of it currently technically consistent with the future roles as described.

A potential key to integration of the LifeCare and Quality of Life Care market systems are the re-purposing of the current HealthCare Exchange infrastructure to provide for a single point of administration incorporating full coordination of care and benefits across all available sources. Doing so will not only effectively support better integration of the various cohorts in the care continuum, it will also provide the innate checks and balances to reduce the waste inherent in the current and historical system. It is anticipated that as much as 40 percent of the healthcare spend and service utilization can be saved just by effective coordination of care and benefits. This will not only save money it will also free resources to cover more patient needs. It is also well documented in various studies that better coordination of care significantly improves outcomes and lowers costs.

The system, as proposed, would tightly coordinate and integrate the needs, resources and functions of four cohorts; Participants, Facilitators, Providers and Sponsors as described following:

  1. Participant – Historically we have called the end customer of care the ‘Patient’ because they needed to be patient. These patients, more often than not, are passive objects where providers routinely dispense procedural services in order to maximize revenue regardless of actual need, benefit or outcome. We recommend that we change the name of the healthcare consumers in this new solution to ‘Participants.’ In this solution, Participants are actively engaged in the entire process of treatment, they are the core determinant – or they can engage a Facilitator, described next – for the services they receive, they must make active decisions in the care process for the basic life care services they need. Participants may purchase expanded choice based care if they have taken active steps to manage their life choices in a manner that makes available funds for optional quality of life purchases they may want.
  2. Facilitators – these are people that help Participants find, qualify, and access services they need or want but they do not provide services directly in the scope of care being sought.     Some Facilitators, are trained and paid for their services, and others are untrained and often simply volunteer. Regardless, they all share the burden of privacy and discretion as well as some other characteristics, both legal and ethical. Facilitator subgroups have very specific sets of roles, responsibilities and requirements – like maintaining the privacy of Participant information that they share across the spectrum of providers. Facilitators interact with all other players in the supply chain and provide certain value to the other constituent groups as well.
  3. Providers – these are the people that provide care to Participants.   It is in this area where significant efficiencies and gains can be made by a re-examination of the rolls and responsibilities, and authorities to practice in a variety of areas. A realignment of rolls will significantly free currently constrained resources and drastically lower the cost for low level routine and frequent care. Realignment will also significantly free current access limits.
  4. Sponsors – these are the people that pay the bill when it is due for the services delivered by the providers.   Sponsors have access to funds and create programs by establishing eligibility requirements – program constraints.

There are many areas where this system will provide benefits. Let’s highlight three main benefits;

  1. Saving money through reduction in duplicated services, unnecessary services, fraud and adverse reactions due to lack of coordination of care and benefits
  2. A more appropriate spread of available resources freeing access to services and funds to pay for them across the widest possible need
  3. An improvement in patient outcomes through a better coordination of care and the incorporation of true participant centered virtual care groups.


We have only scratched the surface as to the features and benefits of these solutions.  We have have not touched on the specific bipartisan agreed upon goals, nor have we spoken of the integrated objectives that need to be crafted into any solution. These are available on the website under Principals, Goals & Objectives.  We have nod discussed the impact of our own myths and misunderstandings about what is really deliverable in terms of the scope and extent of care from medicine today. We also have not had time to discus how the solution provides for a true “Participant Centered” approach which is also key to lowering costs, lowering excess utilization and improving outcomes. These and many other topics are discussed in the draft Whitepaper, Summary Sheets and Articles on the Health Reform 2.0 website.

We believe that the solutions proposed within this site will fit neatly into a comprehensive approach that Americans will be able to embrace. We do not expect everyone to like every solution proposed in the system but, we do believe in the end these solutions as they are designed fit closely together to solve for a marketplace that will provide Americans with an affordable, cost effective, efficient, fair and appropriate market, and safety net, to get the healthcare they need while preserving the options for a choice based system to get the care they want. This is not to be seen as “The Solution,” but as a series of solutions that are interconnected. These ideas are not inviolate and will surely change. To achieve the goal that we seek, will require a Franklin style compromise, either from a renewed interest in bipartisan, bicameral solutions in Washington DC or from the real power-base of America – the American People.

The ACA – ObamaCare is failing, and will surely fail, but not for the populist reasons being discussed so readily today!

We don’t have a healthcare system!

When it comes to America’s, so called, Healthcare System, one of the biggest reasons that most of the attempts to “fix” our healthcare system have consistently yielded more unintended consequences than benefits is that we are treating the symptoms of our disease not the disease itself. We have a number of misconceptions about our healthcare system and the first is that we believe that it is a system.  It’s not!  It never has been.  What we think of as our healthcare system is nothing more than a disjointed, tangled collection of practices, methods, procedures, policies, laws and guidelines that have developed over the past 200 years.  Most of this mess was promulgated to preserve the business of individual practitioners – doctors, physicians, pharmacists, hospitals, pharmaceutical manufacturers, insurers, nurses, therapists, program sponsors, etc. With rare exception, many of this collection of things were not focused on the needs of the patient.

We believe that healthcare has been part of the free market, and some believe that the free market system has failed healthcare. Yet, healthcare has never been in the free market. Almost since the inception of America, healthcare has been carved out and in many ways protected from any negative effects felt on the businesses and practices in healthcare.  No, healthcare is not a system; it is just a non-integrated set of protections granted to the various providers throughout our history.

A plague of myths!

We have many beliefs about healthcare, and its underlying core of modern medicine, that have caused us to establish a set of unrealistic and unobtainable expectations when it comes to the care we receive.

We speak in myths, of single payer systems, and specific cures for diseases. We routinely confuse popular beliefs or historical methods with actual scientifically backed best practice. We misunderstand the true extent of medicines capabilities. We conflate our needs with our wants and ascribe equal weight and priority to both. We have so disconnected ourselves as consumers of care that we do not truly understand the real effect of the care we receive.

We believe we have cost effective, efficient and appropriate roles and responsibilities for the various providers in the healthcare continuum – we don’t!

We believe that technology has played a key role in the cost efficient delivery of care we need – for the most part it hasn’t.

We have a flawed understanding of the actual cost of the healthcare we receive due to a false healthcare economic structure. We have constructed a measurement, funding and

delivery system that is now self-propagating, self-predatory and inaccurate in the extreme.  This has led us to believe that our healthcare system is much worse than everyone on the planet; and because we are the greatest, most prosperous nation on the planet, we can somehow afford to receive all of what we want free – It’s not, we aren’t and we can’t.

We believe Employer Sponsored Insurance (ESI) has lowered costs and been a good thing – it hasn’t!

We believe co-pays and deductibles are both the necessary effect of rising costs and somehow have helped lower our cost of care, as seen in the premiums we pay; and also have been a vehicle for us to become more responsible in our utilization of services – they aren’t and they haven’t!

We believe that the current system can lower care costs and reduce our incidence of financial collapse by transference of these costs to the government, or someone else – they won’t!

We believe that most of the money we spend on care goes to effective treatment – it doesn’t!

We believe that the affordability of government’s payments for services through Medicare and Medicaid is somehow fixable and can be sustainable – it’s not!

We believe that the programs we have demanded our government put in place to help the poor and middle class have actually helped the poor and middle class – they haven’t!

We believe that we cannot fix the effect of litigation on the rising cost of healthcare without penalizing the patients that are truly harmed – we can!

We have such fundamental flaws in our care system that the simple process of seeking care is now statistically one of the most dangerous activities we can do in our lives. Some of the biggest reasons our prior attempts to “fix” healthcare have failed, actually lie in these myths and misunderstandings.

In order for us to finally create an accessible, accountable, efficient and effective healthcare system, including a safety net for all, we have to first identify, and get agreement on, these Myths and Misunderstandings and other fundamental problems.

We have a solution! We believe we can fix the healthcare, and we believe once we identify the fundamental problems the process of repair gets much simpler. Over the next four papers we will outline our fundamental problems and their solutions.

Click this link if you wish to read the whitepaper now – HealthCare Reform 2.0: Beyond the Partisan Divide White Paper

List of Published Articles

  1. Introduction to Healthcare reform: What’s next
  2. Article 1 – Introduction to the Real HealthCare System
  3. Article 2 – The Plague of Myths: Myth 1 Healthcare Costs Too Much
  4. Article 3 – The Plague of Myths: Myth 2 Healthcare, It’s Good for What Ails You!
  5. Article 4 – The Plague of Myths: Myth 3 We Can, and We Should, Live Forever!

We don’t have a system

When it comes to America’s, so called, Healthcare System, one of the biggest reasons that most of the attempts to “fix” our healthcare system have consistently yielded more unintended consequences than benefits is that we treat the symptoms of the disease not the disease itself. We have a number of misconceptions about our healthcare system and the first and foremost is that we believe that it is, in fact, a system. It’s not! It never has been. What we think of as our healthcare system is really nothing more than a disjointed, tangled collection of practices, methods, procedures, policies, laws and guidelines that have been developed over the past 200 plus years. Most of this collection of things were developed for the furtherance of one failing group or another. Most were promulgated to preserve the business of individual practitioners – doctors, physicians, pharmacists, hospitals, pharmaceutical manufacturers, insurers, nurses, therapists, program sponsors, etc. With rare exception, many of this collection of things were not focused on the needs of the patient.

We believe that healthcare has been part of the free market, and some believe, and have even stated publically, that the free market system has failed healthcare. Yet, healthcare has never been in the free market. Almost since the inception of America, healthcare has been carved out and in many ways protected from the effects on businesses and practices of healthcare. No, healthcare is not a system; it is just a non-integrated set of protections granted to the various providers like doctors, physicians, pharmacists, hospitals, regional physician groups, associations and others.

In the earliest days of our nation there was a rise of what at one point were called cartels, including the AMA, the Proprietary Manufacturers Association – then they were patent medicine manufacturers, know we know them as “Pharma” or pharmaceutical companies, the ABA and many others. Each of these groups were originally formed to preserve their business practices or deal with a variety of issues that arose at the start of the nation. Some of the things they did were to create laws to preserve their positions and influence, and other times it was the government, or other groups striking back, taking actions to limit a groups control, influence or business. The result was the gradual creation of this series of disconnected practices, methods, rules, laws, etc. that have evolved into this that thing we think of as our healthcare system. And to repeat, it’s not a system.

So in summary, that thing that we call a system is really a collection of self-predatory practices and methods that promulgate massive increases in costs, erosion of effective checks and balances, little accountability and responsibility, and exponential unintended consequences to patients, providers, facilitators and program sponsors. In addition, this non-system has spurred a belief system that is more simply a plague of myths and misunderstandings.

A plague of myths and misunderstandings

We have many beliefs about healthcare, and its underlying core of modern medicine, that have caused us to establish a set of unrealistic and unobtainable expectations when it comes to the care we receive. Much of what we believe about healthcare and the practice of medicine is wrong. We have ingrained these myths into the basic discussion of care so tightly that what we say is often obviously disconnected from what we actually mean. We speak of single payer systems, and specific cures for diseases. We routinely confuse popular beliefs or historical methods with actual scientifically backed best practice. We misunderstand the true extent of medicines capabilities. We conflate our needs with our wants and ascribe equal weight and priority to both. We have so disconnected ourselves as consumers of care that we do not truly understand the real effect of the care we receive.

We have such fundamental flaws in our care system that the simple process of seeking care is now statistically one of the most dangerous activities we can do in our lives. Some of the biggest reasons our prior attempts to “fix” healthcare have failed, actually lie in our own myths and misunderstandings. In order for us to finally create an accessible, accountable, efficient and effective healthcare system, including a safety net for all, we have to first identify, and get agreement on, these Myths and Misunderstandings and other fundamental problems. We will begin this process in our next few articles. We believe we can do this, and we believe once we identify the fundamental problems the process may get much simpler.

We have bipartisan agreement on goals

While it has become almost hopelessly lost in the rhetoric of politics, we have had almost universal agreement on the basic goals for our healthcare system for many years. In meetings with both republicans, and democrats whether they lean conservative or progressive they tend to agree on the following goals:

  • Available & Accessible Coverage for All (100 percent of Americans)
  • Affordable Coverage for Americans
  • Affordable Coverage for America
  • Minimum Standard of Care
  • Affordable Coverage Regardless of Pre-Existing Condition
  • Affordable Coverage Regardless of Disease State
  • Reduction of Overall U.S. Cost of Care
  • Reduction of the Individual Cost of Care
  • Ensure Coverage for the Underserved
  • Provide an Effective Safety Net

The problem has never been on the agreement of the ideals, for the most part, it has been on the methods and mechanisms to achieve them, to pay for them or their priority. The sad part of the dialog about our goals is that none of the proposed systems can, or will, deliver on these goals. None of the proposed fixes, prior to, or since the passage, of the Patient Protection and Affordable Care Act (PPACA) will deliver what we want. This is not to be interpreted as yet another partisan repeal or replace argument against the PPACA. All of our prior, and post PPACA, solutions have had in their core real benefits. It is just as false an accusation to state that the PPACA is completely flawed and offers no benefits, as it is to say that the PPACA is a great concept and will give us everything we want. This is neither the case for the PPACA or for any other proposed legislative fixes.

One example of this double sided coin is the argument about the PPACA fixing the problem for people in the past that were not able to obtain insurance due to preexisting conditions, or the corresponding problem of people getting sick only to be cancelled. There has been great benefit for many who have significant chronic illness who were unable to gain insurance. But the method, codified in the current law, does not really gain them the affordable insurance they think they are getting as many are finding out. This is not just an issue for the PPACA. It is also an issue for all the other proposed fixes.

While it is true that many are now able to get the care they need, truly a benefit for them as individuals, there is a compounding problem even for those that are gaining care they need. The mechanism that has been implemented to get them care and to minimize the impact of the additional cost of these “sicker than average” patients on their insurance plans – often driven by some form of group, either employer based or geographic – the law has allowed the creation of high risk pools and the payment to the patient, or the insurer, of subsidies to offset the much higher premium cost due to the accumulation of all of the really expensive sicker patients into one group. Once again, this has been good for the individuals, but as we will explain in a later article, combined with other methods in the law and in our current system, this is having very bad effects overall. Again, we are not attempting to argue against the PPACA here. This is just an example of one small part of a regulation that is combining with other parts of the current thing we call the healthcare system that is spawning large unintended consequences in many areas.

We believe that these fundamental problems can be fixed and that we can develop an integrated set of solutions that will address all of the problems we face and deliver on each and every one of the original bipartisan goals. But, we think there are other systemic goals that need to be part of any solutions.

Systemic goals

While working on the Whitepaper to identify and address the fundamental problems, we also identified a number of additional systemic goals we think must be ingrained in any resulting healthcare system that we describe. We have developed our set of solutions to address the historical and current issues and to provide the simplest and most effective system to achieve the following additional goals:

  • Deliver on the promise of available, affordable, effective and easily accessible care covering basic health needs for all (100 percent of Americans) – LifeCare Plans
  • Provide integrated choice driven, available, effective and accessible care covering the additional services that Americans want – Quality of Life Care Advantage plans
  • Assure a cost effective, fair, and easily accessible Safety Net for all Americans
  • A solution that converts “Patients” from inactive recipients of ineffective health services, to active Participants in the selection, management, delivery and prevention of care.
  • Assures price certainty, cost transparency, and full care portability
  • Require No Deductibles, no Co-Pays, no hidden fees – all cost easily defined, certain and accountable
  • Provide full cost disclosure for all parts of healthcare, no hidden reimbursement systems, no rebates and no self-propagating cycles that obscure full and true cost
  • Assure coverage regardless of pre-existing condition or disease state
  • Deliver a system with checks and balances that select for reduction of overall U.S. cost of care as well as reduction of the individual’s cost of care
  • Allow no government “Death Panels” instead provides a representative citizen group of participants, facilitators, providers and sponsors that are empaneled to determine what constitutes basic health needs, treatments and therapies and establishes effective payment rates for providers under basic LifeCare Plans
  • Assure appropriate, effective, and efficient delivery of basic health needs
  • Effectively balance care outcomes expectations to healthcare’s ability to deliver effective services.
  • Deliver the ability to seek the provider(s) of their choice
  • Transform employers from the provider and manager of healthcare through Employer Sponsored Insurance to focus on wellness and prevention and act as a facilitator to help employees both afford basic health needs, LifeCare plans and effectively plan and save for Quality of Life Advantage services.
  • Improve Participant outcomes
  • Integrate any market based solutions by providing a single system of resources for Participants, Facilitators, Providers and Sponsors to fully effectively coordinate all care and benefits needed by Participants across all available sources. This system should:
    • Provide Participants
      • a central place to identify and register their care needs
      • automatically apply for all benefits with a single dynamic entry system
      • source, review, compare and select Facilitators and Providers
      • manage access to their information and provider network
      • provide access through a true Participant centered system between all Facilitators, Providers and Sponsors with adequate security, information needs and access controls
      • Match all needs to all appropriate and available resources in a least cost tiered method approach
      • Assure checks and balances to inform, enforce and secure privacy controlled interactions among their virtual care team.
    • Provide Facilitators
      • An effective and low cost system to assist Participants in sourcing, applying and accessing all needed resources.
      • A mechanism to appropriately identify appropriate payment resources by matching the participants needs to Sponsors registered program eligibility criteria
      • A systemic mechanism to identify potential Provider and Sponsor conflicts and areas of potential duplication of services and benefits
      • Mechanisms to help identify and report fraud
    • Provide Providers
      • An effective and low cost system to appropriately match their services to Participants needs
      • A mechanism to assist in establishing fair, effective and competitive pricing.
      • Improved ability to manage patient mix and reallocation of services to other Providers
      • An efficient and effective way to identify, qualify and integrate their services with additional Sponsors to expand the opportunity for payment.
    • Provide Sponsors
      • Effective and low cost system to identify and integrate Providers with the Sponsor’s program Participants via a much simpler and drastically lower cost model.
      • A fair and effective system to eliminate duplication of payments due to the unknowing duplication of services by Providers
      • An effective mechanism to identify and reduce or eliminate duplicated payments due to fraud and abuse
      • An effective mechanism to manage the provision of multiple services by multiple providers through multiple programs with effective balancing of roles responsibilities and cost
      • Allow for new ways to spread cost of services via;
        • Balancing of payments across all eligible programs
        • Payer of last resort systems
        • Negotiated share of cost settlement
      • Innate validation of most comorbidities across Provider sources
      • Eliminate the Silo Effect

As we move through each of the fundamental problems in our historical and current system we will make sure that we incorporate these systemic goals into what becomes our final integrated set of solutions. With this as background, we will start with one of the myths that plagues each and every discussion we have about our American healthcare approach. This myth, more than most of the others, not only provides the basis for our basic discontent but also provides the framing that support both ideological extremes.

Coming next

The Plague of Myths – Myth 1 Healthcare Costs Too Much

List of Articles:

  1. Introduction to Healthcare reform: What’s next
  2. Article 1 – Introduction to the Real HealthCare System
  3. Article 2 – The Plague of Myths: Myth 1 Healthcare Costs Too Much
  4. Article 3 – The Plague of Myths: Myth 2 Healthcare, It’s Good for What Ails You!
  5. Article 4 – The Plague of Myths: Myth 3 We Can, and We Should, Live Forever!

The Plague of Myths

There are many myths that pervade our beliefs and therefore underlying assumption about our so called healthcare system. We believe that;

  • We have a healthcare system,
  • We believe that we already have, or are very near to having, cures for almost everything,
  • We believe what is good for us as individuals is good for the human species,
  • When it comes to healthcare we think that what we want is the same as what we need,
  • We either believe only government should have the role of providing care or we believe that government should have no role at all,
  • We believe that America can afford it – whatever it is,
  • We believe that Employer Sponsored Insurance has been a good thing,
  • We believe Co-Pays and Deductibles have helped lower costs and reduce consumption, and
  • We believe many, many others myths as well.
  • We also believe that American Healthcare costs too much!

Does American healthcare cost too much?

We believe that our healthcare system costs too much. This forms the basis for many, if not all, of the assumptions we make about what is wrong with American healthcare. It provides the justification for the historical vilification of most of the players in the system including; doctors, pharma, insurance companies, hospital systems, patients, etc. It provides the basic assumptions that virtually any other system in the world is better than the American system in providing care, on almost any set of criteria, as long as cost is a part of the measure. It also sets the stage for why any solution simply must be a governmental solution because – in the generally held opinion – clearly the American free market system has let us down when it comes to healthcare. But is it really true that American Healthcare costs too much? The question is predicated on what the real question, or questions, are actually asking. When asking a person if something costs too much, most people will have one of two deliberative responses. The first deliberative response is, “Yes, it costs too much!” The second deliberative response we may hear is, “Compared to what?” The problem is that neither of these responses really have a true answer. In the first deliberative case, when asked, everyone will respond that something costs too much, typically because, emotionally, we always want to pay less. In the rare occurrence where there is a more rational real evaluative process at work – which is not as typical an occurrence as we may wish it were – this determination is mostly due to; it used to cost less – now it costs more, and therefore it costs too much. In the second deliberative case, we apply a variety of measures, more often than not, to prove that it does, in fact, cost too much. We innately carry a bias to find a reason that something is not giving us the value we seek. This has been ingrained in us as consumers. It is further complicated for us in healthcare because the numbers that we use to determine how much care is costing us as individuals, or as a nation, are often wieldy inaccurate and unspecific. As individuals, we do not have real transparent and price certain information to form a judgment. We may know what we pay in premiums, we may know what we have to pay in deductibles, we may even know what we are supposed to pay in Co-Pays but we really do not know what the doctor is getting paid, unless we pay the bill ourselves. Further, we often have no transparent mechanism to assess comparative value, nor do we have the ability to fully understand the other hidden costs that layer in the system driving up the true care costs. Some of the hidden charges show up in the price as rebates, some show up in fees that are assessed on insurers or providers, some show up in taxes that we pay, and some show up in raises we do not get because employers decided, or are forced to, put more money in benefits costs. Some of the costs we see, we understand, are due to cost shifting from government payment shortfalls to providers being passed back to private pay patients and insurance patients. We simply do not know how much hits us individually, nor what hits us nationally. So when we ask the clarifying question “Does it cost too much, compared to what?” we will add qualifiers like, Compared to a single payer system, or to the governmental form they have in England, or France, or Germany. Or, we may say compared to Medicare, or Medicaid, or Romney care in Massachusetts, or to some other idea. The problem is they are not comparable for a variety of reasons. The whitepaper address many more of them than we will in this article. Lest you think you are alone in the dark as a patient, neither providers, nor insurers, nor anyone else knows either. We have evolved a false economic structure for our healthcare services over the years and now we have a system that is mechanically, and in other ways, driving costs higher each cycle, making the true cost of care less transparent, stimulating the need for more hidden self-predatory and self-propagating systems to fund these spiraling costs, and these systems are requiring that many charge more to offset the other spiraling costs. If we do not know what it costs in a real and true sense, then we cannot answer the prime question, “Does American healthcare cost too much?” This is regardless of which of the former deliberative paths; emotional or rational, we choose to apply to get an answer.

Do we really know how much America’s healthcare costs?

The short answer is, NO – we don’t. We just think we know what it costs because the government produces a combined healthcare spend number that is nationally reported. But, does the number, that is reported, actually represent what we really pay for the healthcare we consume? You guessed it, NO – it doesn’t. The real number is likely far less than what we is reported; but getting to the real number is very difficult. Why is it so difficult? Well that’s because of a number of factors. A few of them are;

  1. We do not collect consistent comparable data – it includes both actual reimbursements and invoiced prices.
  2. Much of the reimbursement data that is collected, is tainted by the false economic structure in place that both influences its price and affects the reporting
  3. Some of the data reflects what is charged at invoice; but what is typically paid to providers is a significantly smaller number – averaging 22 cents on the dollar invoiced – unless you are a self-pay patient.
  4. The numbers that are calculated based on what is reimbursed to providers for the service – actually paid, not invoiced – is tainted by a number of hidden and in some cases arbitrary calculations and mechanisms that drive up the reported reimbursement price as well.

False economy – false pricing

The whitepaper has many examples of items that obscure the true price and that have created a hidden disruptive system of back funded programs and self-predatory and self-propagating pricing. Here we will discuss one of the easier examples. Rebates exist in almost every industry and in most segments of our economy. Typically, they have little effect – other than fooling us into believing we are getting some kind of great deal and that we need to purchase today to take advantage of the saving. In actuality, they are nothing more than a simple artifice of marketing to get us to buy now and believe we have just gotten a great buy. Of course, they are an illusion. Manufacturers follow the practice of, “Mark up – to mark down.” What we pay for the product is what they planned for us to pay all along. We got the very same deal we would have gotten if rebates did not exist and in the end nothing is harmed – except our ego. Healthcare prices invoiced are historically highly inflated to compensate for a number of other hidden charges and do not reflect a fraction of what is actually paid. The problem is there is no real understanding of what is finally paid for any of these services. As stated earlier, invoiced rates receive actual payments of only about 22 cents on the dollar and sometimes much less. Even the recorded reimbursement rates are inaccurate due to numerous mechanisms in the current systems. The following is just one example and this shows the effect of rebates in the nation’s pharmaceutical system’s real cost and pricing. Simply, many levels along the supply chain get money back from pharmaceutical companies based on the volume that they purchase in a given period. Effectively, they pay more for the product at the time of sale but if they reach a certain volume of purchases, they get money back from the manufacturer. These rebates flow back to pharmacies, Pharmaceutical distributors, hospitals and others often months after the actual purchase, the dispensing and the sale of the product. There are complicated formulas that account for how much money goes back into the supply chain post purchase. In itself, this obscures what is really paid into the system for the product. Rebates in true consumer market retail systems are not a problem because the price we consumers pay is the price we accept. But when the payment is made via a government program and not based on our own discretion; and when the government is mandating rebates back to itself and then flowing the rebates to pay for the services that generated the rebate, these rebates become a big problem! Lest we blame Pharma for this, as some method to hide pricing and make hidden profits, this is not the case. Pharmaceutical manufactures did not create this system – our government did. The biggest players in pharmaceutical rebates are the federal and state governments who demand rebates from Pharma for the drugs their benefits programs proscribe to their program participants.

This example is of the California AIDS Drug Assistance Program (ADAP). Spending about $500 million per year for drugs for HIV/AIDS patients that meet their eligibility criteria, since California is paying directly for the services you might assume that the true cost of the medications is the $500 million that California spent for the drugs. But, you would be wildly wrong! The $500 million is paid from three main sources. About 50 percent of the funding is provided to California through the federal Ryan White Care Act program – a significant portion of these funds come to the federal government from mandatory pharmaceutical rebates paid by the manufacturing company to the Center for Medicare and Medicaid Services (CMS). This government mandated rebate program assesses a rebate ranging from 17 percent to no more than 100 percent of the Average Manufacturer Price (AMP). These rebates flow back to CMS months after the provision of the medication to the program participant, purchase and payment to the pharmacy that dispensed them and the subsequent processing of the claims to the state. Of the remaining 50 percent of the $500 million, this is provided by California. Slightly less than ½ of these funds are derived from the CA general budget (about $120 million from state taxes) the other, slightly more than ½, come from a “Special” Fund in the CA budget that is where similarly mandated rebates are paid to California by pharmaceutical companies that provide medications to participants in the CA ADAP program. Somewhere between 1/3 and ½ of the funds that are counted as payment for these medications are just artificially inflated pricing that is collected at the time of payment, flows to the manufacturer and then flows back to the state to begin the false economic cycle all over again. So, in the case of California, the true cost of the drugs provided by the Cal ADAP program to participants is at least 1/3 less than the reported $500 million number.

Similar governmental backflow funding mechanisms that generate false cost data is seen in a number of the Affordable Care Act fee structures. When fees are assessed on the costs of premiums, and are then collected and used to pay for the subsidies in premiums you purchase, you have a similar self-propagating and expanding cost driver. There are many, many of these structures in our current healthcare system and the ACA and other proposed legislative fixes, have not only NOT fixed them they are inadvertently adding many more layers too them. So we just do not know what we pay for healthcare in America either as an individual patient or as a nation! It’s that simple. So if we really do not know these numbers how can we determine if our system is worse than some other system? Particularly when part of the question we are asking has our inflated cost in the mix?

Is the American total cost of care number an “apples to apples” comparison to other countries?

So what is the current projected total estimated cost of healthcare for our current year, 2014? It is $3.8 trillion. Whew, it hurts one’s head just to think about that number. Particularly, when you remember that there is only an estimated $17 trillion of currency in circulation – this is from the most generous estimates. In 2009, we reported that we spent only $2.9 trillion. As we described above, these are not true and valid numbers. These are just the numbers we’ve calculated. We have been calculating these numbers for a long time but that makes them no more accurate. In fact, we have made a number of substantive changes to the factors that influence pricing, as have been partially described above, and as a result, it is more than likely that this number is inflated by as much as 1/4 to 1/3, or perhaps even more. The effect of the self-predatory and self-propagating factors, like mandated rebates and penalties, as well as the false structure of massively inflated invoice prices that do not directly relate to actual reimbursements, all contribute to this false economic and false understanding of what we are really spending. The problem is not just that we are comparing non-real numbers, there is at least one other problem. We do not count our system like most of the others do either. An issue that exists in comparing the U.S. healthcare spend, let’s say against England or France, is that America counts all healthcare including Medicare, Medicaid, private pay, insurance, self-insurance, military and retail care through all channels of care. We do not have one system, we have many, and we count all of them indiscriminately and as stated, inaccurately. Most countries with central governmental healthcare, are only counting the official governmental healthcare system numbers. They often do not recognize that there are also private choice based systems for people that want to buy care and can afford to purchase directly from providers outside of the governmental system. These national numbers are often significantly under-reported when compared to our own. So when we see comparisons of the cost of care in America, as compared to other countries, we are never looking at apple to apples comparisons. We must realize that the number we claim we actually spent, is not a true and accurate number. Taking all these corrupting factors into consideration, and eliminating the partisan bias on either side, it is highly likely that the U.S. healthcare system will fall in the upper third to middle of other nations as compared by cost, outcome and efficiencies. What is unequivocal is the U.S. ranks at the highest percentile for options and choice. Once again, one of the key assumptions that drives our opinion of America’s healthcare system is that other nations measure their healthcare costs as we do, and what they report is reflective of the same things we count in America, but this is an invalid assumption as well. So when we look at comparative costs for procedures between any other country and ourselves, we are really at a loss to make an effective measure due to the problems in how we create costs and how we count the costs. This is addressable, and relatively easily fixable. And, it is a fix that systemically will combine with the other needed solutions to solve some of the other fundamental and systemic problems in our current healthcare system. They will combine in an elegant way to create a simpler and more effective, consistent, and fair approach and will solve for the goals outlined in Article 1: Introduction to the Real Healthcare System. Another thing that is driving up our costs, are our own expectations of the care we should receive, its real efficacy, the extent of the care, and modern medicines true ability to provide to us what it is that we believe they can deliver.


In order to solve for these problems, we must develop an integrated solution that provides the necessary system architecture and systemic controls to remove the need for these extraneous and obfuscating price and funding systems. We must set up a system where cost shifting cannot occur. We must assure that there is no mechanism that can self-propagate and become self-predatory. The solution for this set of problems will remove rebates and other back funding mechanisms, and will bifurcate the market for the basic care we need while delivering through a separate market the optional care we want. One market will be incentivized to provide all the basic care we need efficiently, cost effectively and efficaciously to every American regardless of income or means equally and fairly. The other market will be designed to deliver choice to obtain the care we desire and want with a range of options of price and value based services. These two markets should be tightly integrated and managed through a single point of administration that will allow for a truly patient centered system incorporating easy sourcing and access, transparent pricing, price certainty, and portability as well as full coordination of care and benefits across all available sources. This type of system can be created incorporating most of the current infrastructure. It will significantly simply many of the practical problems that plague, insurers, providers, patients and third party administrators. It will significantly lower costs, free resources, lower liability, reduce duplication of services, reduce fraud and provide easier access. Finally, it is designed to provide full portability, transparency and price certainty so that America and Americans can make informed and accurate decisions as to the cost and resulting value for the services they receive and to effectively compare cost and performance between services, providers, institutions, methods and other nations.

Coming next

Article 3 – The Plague of Myths – Myth 2, Healthcare, It’s Good for What Ails You!

List of Articles:

  1. Introduction to Healthcare reform: What’s next
  2. Article 1 – Introduction to the Real HealthCare System
  3. Article 2 – The Plague of Myths: Myth 1 Healthcare Costs Too Much
  4. Article 3 – The Plague of Myths: Myth 2 Healthcare, It’s Good for What Ails You!
  5. Article 4 – The Plague of Myths: Myth 3 We Can, and We Should, Live Forever!

Do our expectations of Healthcare match reality?

We have a large number of myths that govern our beliefs about our current Healthcare system – or non-system to be more accurate. One of the larger set of myths that drive our perceptions of both the positives and negatives of our healthcare system are our beliefs and expectations as to what we should get from healthcare and the underlying medicine. We believe, that modern medicine has cures for almost anything we face. We believe that the continual research and discovery that has occupied much of the past 164 years has led to a firm and almost complete understanding of the science of disease, injury, and treatment. We believe that there is little difference in cost between the things we need for survival and the things that we want to improve our lives. We believe that the current methods of treatment and the discoveries we have made over the past 80 years are making us a stronger more robust species. We believe that the doctor is typically the best and most qualified person to deliver the care we need. And we believe that in most cases going to the doctor is safe and leads to improvements in our health. These are just a few of the myths and misconceptions we have about the current state of medicine and what we should expect from our healthcare system.

Is Healthcare effective?

Doctors and the practice of medicine have come a long way since my grandfather was born in 1872. In the year of his birth America was only just beginning to understand Lister’s pivotal study on antiseptic practice – lowering significantly the incidence of infection – and the discovery of ether to provide a method for painless surgery. But, through a good portion of his youth and young adulthood America was still dependent, and plagued, by the ills of Patent Medicines, charlatan physicians and quack medical treatments. It was not until he was well into his 50s that the first antibiotic, penicillin, hit the market. Since those days, medical education and licensing has been completely changed, science has expanded and much has been discovered. Many great strides have been taken by medicine and its practitioners. Nothing in the following is meant to call any question into the care, education, skills and abilities of modern practitioners. The information is presented not to show how poorly they do their job; but, to show that we tend to ask way too much of them, in most circumstances, and that it is not their abilities and skill that are in question, it is the state of our misunderstanding of where we really are in our knowledge of our own biology and its interactions with the world and the other species that live in it.

Beauty may be in the eye of the beholder, but good, effective, accountable care is very hard to discern, let alone find, given the myths we hold about the practice of medicine. Let’s start with a few shockers. In January of 2008, Peter Orszag, then Congressional Budget Office director, reported to the Senate Budget Committee that more than $700 billion of the then $2.9 trillion in annual spending that year did nothing to improve a patient’s health and even produced harm. Dr. Elizabeth McGlynn, et. al., reported in 2003 in The New England Journal of Medicine, in an article entitled, “The Quality of Healthcare Delivered to Adults in the United States,” that physicians get the diagnosis wrong about one-half of the time. Dr. Norman Scarborough in his paper, “Medical Misdiagnosis in America 2008: A persistent problem with a promising solution,that multiple autopsy studies have revealed frequent clinical errors and misdiagnoses with error rates as high as 47 percent. Sanjaya Kumar, MD, MSc, MPH and David Nash, MD, MBA writing in their book Demand Better! Revive our broken healthcare system (2011), found that only about 20 percent of clinical practice treatments that doctors deliver to patients are backed up by solid controlled trial evidence of effectiveness.

The effectiveness of medications do not fare any better, and in many cases they are just becoming worse. The best historical medications, like aspirin, have typically only been able to be metabolized – chemically broken down and used – in about 68 percent of the people that take them. Today many of the medications we are proscribed have significantly less efficacy and many more side effects than those in the past. As time has gone on, it is safe to say that Pharma has picked much of the “low hanging fruit.” The chemistries coming forward today have less effectiveness and many more side effects when proscribed through our current healthcare system. Biotech created medications offer some hope for efficacy and lower side effects but they often have problems with large scale production – unlike traditional Pharma. We are at the advent of the day when soon a pharmacist will require your genotype and phenotype – body chemistry type – to be able to dispense an effective and safe medication. 10 years ago experts in both industries were calling for a focus and development of systems to effectively deliver “personalized” medications to patients – something not supported by the current infrastructure.

So according to the real data 50 percent of the time physicians get the diagnosis wrong; when they proscribe treatment only 20 percent of the treatment actually has an underlying scientific basis in best practice; and, when they proscribe medications, at best, only 68 percent of us can actually chemically use the medication – often it’s much less. Yet, with all of the above statistics in evidence, more than 85 percent of the people who visit a doctor report that they were cured by the treatment or medications provided based on the visit.

Much to our collective dismay, unfortunately, the practice of medicine today is still much more art than science. How can there be such a large disconnect between the statistics of care and our impressions of care? We often confuse the body’s innate ability to heal itself in a given period with a beneficial effect of a visit to the doctor and the provision of their services or medications. We have been trained to believe that the doctor can cure anything and that technology has solved for all but the most deadly of diseases. We have unobtainable expectations of the ability of doctors to cure us of almost anything. Surprisingly, our expectations are not simply to cure us, but to repair us. Not simply a repair to an “as good as new” level, but to a level better than we were before we ever got sick or injured. As a result, we also have evolved to a point where, for many, our expectations far outweigh the reality of care that can be delivered. When the care does not meet our expectations, what do we do? We sue! To combat this rising tide, doctors have evolved to proscribe more diagnostics, treatments and medications – practicing so called defensive medicine. This has both driven costs much higher and increased the very same overuse problem that is also driving the risk of simply seeking healthcare.

Is Healthcare safe?

The Institute of Health Improvement reported in 2007, that about 40,000 times per day there is an incident of medically induced harm – about 15 million cases of medical harm per year. There are a significant number of incidences of Hospital Acquired Infections (HAIs), about 4,600 per day according to the Centers for Disease Control and Prevention (2007). Medication errors are one of the consistently deadly forms of medical error. Another Institute of Medicine report, “Preventing Medication Errors” (2006) showed that medication errors account for about 1.5 million patients harmed each year.

In their book, Internal Bleeding: The truth behind America’s terrifying epidemic of medical mistakes, Robert Wachter, MD, and Kaveh Shojania, MD describe a few of the kinds of problems people face when seeking care:

  • About 12,000 heart-attack patients are mistakenly discharged from hospital emergency departments each year because a physician failed to diagnose them as having a heart-attack or restricted blood supply.
  • Twenty percent of hand surgeons operate on the wrong hand or finger at least once in their career.
  • An estimated one out of 10,000 surgery patients end up with a surgical instrument or sponge left in them
  • Physician fatigue degrades performance. Staying awake for 24 hours is like being legally drunk with a blood alcohol level of 0.1 percent. And yet, extended-duration work shifts remain common for physicians doing their medical residencies.

Dr. Kumar, and his coauthor, refer to what they call the deadly triad of healthcare delivery: under-use, over-use and misuse, as the core to many of the current problems in effective healthcare. A 2009 report by Consumers Union, “To Err is Human – To Delay is Deadly: Ten years Later, a million lives lost, billions of dollars wasted,” by Kevin Jewell and Lisa McGiffert stated,

“Despite a decade of work, we have no reliable evidence that we are any better off today. More than 100,000 patients still needlessly die every year in U.S. hospitals and healthcare settings – infected because of sloppy compliance with basic cleanliness policies, injured by failure to follow simple checklists for safety – the equivalent of a national disaster every week of every year.”

Patients are no safer outside of the hospital setting. Most specialists report receiving no information from the primary-care physician before specific referral visits, and many primary-care physicians report not having received any information from specialists by four weeks after a specific referral. Two-thirds of the time the Primary-care doctor doesn’t have the discharge summary for a patient returning for the first visit after a hospital stay. When the discharge summary is available, they often lack information such as diagnostic test results – missing up to two-thirds of the time – and test results pending at discharge.

The IOM report, To Err is Human, cited earlier, came to the conclusion that medical error is not a “bad apple” problem and that most medical errors do not result from recklessness or malfeasance. It is also true that many times the person that is front and center in deciding the best mode of treatment, the doctor, is not the best person at all times to affect care. Sometimes they have the least information. Sometimes they have had the least interface with the patient – in some cases never having seen them personally. And sometimes, they do not have the best background for the determination of most appropriate medications to be provided.

In all, the To Err is Human report summed up our current systems this way:

“Imagine arriving at the airport and being invited to board an airplane that is little more than a horse and buggy with jet engines attached. Yet, this is what we ask patients to do every day – put their lives in the hands of a healthcare delivery system built in a nineteenth century for the solo-practice doctor with a black bag and trust it to support teams of doctors and other professionals using twenty-first century technology.”

No wonder seeking healthcare is one of the most dangerous things you can do. Fishermen are considered one of the most dangerous occupations with a death rate of 200 per 100,000 fishermen. Loggers experience the rate of 102 deaths per 100,000. Firefighters suffer 4.4 deaths per 100,000 firefighters. But, if you look at the rate of death from medical errors it dwarfs firefighters, doubles death rates for loggers and beats death rates for commercial fishermen with approximately 265 deaths per 100,000 patients admitted. One could begin to draw the conclusion that seeking healthcare is not one of the safer things you can do! And, one would be correct!

Does more money spent mean better care received?

In June, 2009 The New Yorker ran an article called, “The Cost Conundrum: What a Texas town can teach us about healthcare.” In it, Atul Gawande, MD made this observation:

“Healthcare costs ultimately arise from the accumulation of individual decisions doctors make about which services and treatments to write an order for. The most expensive piece of medical equipment, as the saying goes, is a doctor’s pen.”

The financial incentives in healthcare, even with the advent of the Affordable Care Act, still stimulate the provision of more healthcare services – often, as shown before, with no evidence to justify the additional services. While for a period of time, with the adoption of the so-called “managed care” model, utilization rates and costs did decline from the 1980’s to 1990’s; spending bounced back with a vengeance. America has historically had a visceral reaction when systems are put in place that restrict choice – even if they were only perceived restrictions. One of the main drivers of rising costs is rising utilization. Rising utilization is driven by a few items including, defensive medicine, new more expensive protocols and new more expensive medications – often with little or no gain in efficacies – and the biggest factor is the rising incidence of physicians simply providing more services.

But, more spending is leading to fewer positive results. Over the past 60 years we have trained ourselves as consumers of care to ask for more and, the providers of care have responded by coming up with many new offerings of care. Along the way we have forced our employers to demand more of these wanted types of care to be covered under insurance and, insurers have responded by increasing plan coverage to include the additional items we demanded. We certainly did not expect providers to offer us less care at the same time we were pressuring the people paying for services, employers and insurers, to pay the providers less in order to keep our premiums down. Did we? When Medicare and Medicaid came into law in 1964, there were about 450 diagnostic codes governing what was provided and paid for services. Today we are about to have over 100,000 codes for services and payments. Who sells more products, a boutique store with 25 types of shoes, or a department store with 16,000-30,000 different products to choose from? Healthcare is in many ways no different.

One of the things that distinguishes U.S. healthcare from other countries is the sheer volume of care we consume. As an example, Shannon Brownlee, in her book, Over-treated: Why too much medicine is making us sicker and poorer, (2007) notes that we get three times the number of expensive MRI scans as the OECD average, and compared with other countries, we have many more specialists who often recommend expensive procedures or surgeries. According to Dr. Kumar, in Demand Better, in some cases the tests we spend more on are actually less beneficial. A $20 blood-pressure test turns out to be superior to a $32,973 electroencephalography test, a $24,881 CT scan and a $22,397 cardiac enzymes test. Yet, despite the evidence, there has continued to be an explosive rise in excessive expensive tests. There were 40 million CT scans performed in 2000 and 72 million in 2007.

There is a very dangerous complication to the outcomes focus on reimbursement inherent in the ACA and many of the other current proposals. The same reimbursement system that rewards hospitals to lower readmission also stimulates them to provide more complex acute care on the front end and encourages hospitals, and providers, to get patients out of the hospital quickly. Dr. Kumar, et.al. sum up the lessons we should learn this way:

“Spending more on healthcare delivery does not bring more quality… When you have a hammer, everything looks like a nail. Doctors are paid to keep using the same hammer, doing the specific things they were trained to do. They’re going to set a target income, and they’re never going to stop – at least until the payment (and delivery) system is radically altered. “

Overall more money spent does not equate to better care received. In fact, often the more money that is spent on care is having the opposite result because as noted earlier, the more care you receive, the higher the cost due to error. There is also an almost perverse correlation. The more care you receive – the more money you pay – the more errors you get – the more care you need – stimulating higher cost – more care – more error – more care – more cost…

Does our disconnection between our expectations and what can be delivered increase our costs?

The short answer to this question is obviously, yes! But, the answer itself belies the depth of the problem or the insidiousness on how these myths and misconceptions have conspired to drive up the cost in our system or damage our ability to make fixes to the system. Further, if we do not understand these issues well, then the result will be just what we have had for the past 40 years – a series of fixes, and proposed fixes, focused on the symptoms but not addressing the systemic problems. First, and foremost, our over expectations for services, that our medical healthcare system has under delivered, has driven an ever expanding assumption that we can get any, and all, of the care we need or want, with equal weight through the very same delivery system. We also believe that we should have no increase in cost except as a result of greed, or fraud. We have so held on to the belief that the gains we have made in knowledge and science over the past 100 years have solved all the problems, we now do not recognize why our healthcare system is not working. In continuing our unshakeable faith in the myths that medicine can cure all, we have spent the past 40 years demanding continuously increasing services from our employers who paid the bulk of the bill. Employers, in turn, demanded these increases from insurers. The insurers accommodated the demands and added the increased coverage and raised premium prices to cover the increased costs and additional risks. And who do we blame?

As this transpired over time, and the costs got more, and more, out of control, employers – no longer willing to shoulder all the expense – pushed back on the rising costs to insurers, who passed on part of the expenses back to us in the form of co-pays and deductibles. We have seen significant rise in the scope and breath of items covered. We have seen significant expansion from basic care, to include vision, dental, office visits, physical therapy, advanced medications and numbers of chronic diseases not covered under older insurance plan models. We have also seen a significant increase in the so called “Quality of Life” covered items. We have convinced ourselves as consumers that we can look at the care we need and the care we want with equal weight and entitlement. As a result, as time has gone on, we have expected more care and we have assumed we could get it at the same price. In fact, many today believe that somehow the subsidies that are being paid to eligible people are not real money. I have had more than one person tell me it is really just a group discount that there is no money actually being paid for the subsidies.

So the answer is, yes. And, even more importantly the yes has a number of complications and multiplying effects. It has driven us to believe that the care we get today is much more expensive than the care we got a few years ago; and that the cause is simply because of greed. We now, for the most part, blame insurance companies, pharmaceutical companies, hospitals, doctors and others. We feel they are all getting rich, and somehow this is on the backs of the ability of us to get the care we need. There are instances of greed everywhere, and there are of course bad actors in any system. This is simply not the case in general, and if you review the last article The Plague of Myths: Myth 1 Healthcare Costs Too Much, you will see that even our understanding of the cost of care we receive is highly suspect.

Is our current practice of medicine and its delivery through our healthcare system good for us as a species?

We have a general belief that everything we receive as treatment or medications, particularly antibiotics, is good for us. We routinely gauge the effectiveness of care based on our own personal outcomes, or those of family and people close to us. This is a fine measure in the short run and it is a good measure if we are looking at our own circumstances. It is not necessarily a good measure in the long run and likely a very bad measure when evaluating our future as a competing species on earth.

We get infections that historically would have killed us, or caused significant damage to our ability to survive or reproduce. We get injuries and suffer diseases that just 60 years ago would have left us dead or again severely crippled. Today, we see the rise of many species that prey on us – like bacteria and other microbes – that are now very resistant to the drugs and chemistries that we have to combat them. We have microbes like; Clostridium difficile (c-diff), Carbapenem-resistant Enterobacteriaceae (CRE), Methicillin Resistant Staff Aureus (MRSA), drug-resistant Tuberculosis, and a recent strain of antibiotic-resistant Neisseria gonorrhea. We do not want to forget about viruses. There was a recent discovery of a polio-like eneterovirus in California with no known treatment.

While it is easy to chalk this up to other factors, like the use of antibiotics in feedstock or the overuse of antibiotics in general, one big factor is how we have been treating diseases for the past century. We have effectively removed ourselves from natural selection years ago. As I said in my book, The History and Evolution of Healthcare in America: The untold backstory of where we’ve been, where we are and why healthcare needs more reform!

“The practice of healthcare, after all, is largely a war with other species (bacteria, viruses, and other complex pathogens), a war with our environment (accidents, violence, and pollution), and also a war with ourselves (diet, exercise, work habits, and sleep). From time to time, we can see gains for ourselves in these battles, but our mortality assures us that we will all eventually lose the war. Basic biology and the laws of nature have stacked the deck against us. Innovations in technology, science, and medication have helped many of us delay the day of our ultimate surrender, but these advances have also fostered the false belief that no price is too high to pay for an extra day or week of life.”

Overall, another of the bigger problems is we make decisions for the provision of care weighted almost solely to the needs and wants of the individual. While no one can argue with the heart of this decision, we may be approaching a time when we will need to also look at the effect on us as a species. History has shown that, in some cases, what is good for us individually could very likely become bad for us as a species. There is now ample evidence to show that the mere use of antibiotics – not necessarily overuse – has led to the rise of hype-resistant strains of bacteria. The treatment of other diseases, and conditions that would have limited or prevented reproduction has increased the incidence of the very same disease or condition in the population. These are very thorny and difficult issues that someday soon we will need to address. Some of them may need to be addressed in the decisions we make about the provision of care, and others will be those we will need to address as a society. Who among us wants to make decisions that may be detrimental and damaging to those we love? Yet, we may one day in the not too distant future have to make such decisions.

In the end, the continual trend to extend life for each of us as individuals, and to allocate more of our funds for quality of life care verses basic life care has had a very significant effect – one that we will explore in more detail in our next article.


In order to solve for these problems, we must develop an integrated solution that provides the necessary system architecture and systemic controls to address our needs for care and our want for care separately. We need a system that begins to provide real accountability for the cost and efficacy of care we receive from providers. We need a system that helps inform us as to the real value and results we should expect from the healthcare providers we select. And, we need a system that effectively manages our own choices between the care we need and the care we want and the system needs to work in a totally transparent manner to prevent cost shifting from the needs side to the wants side hiding the real cost.

We need to rethink the delivery of the care we need. We need to establish best practice protocols for as much of the needs based care as we can, but not in a manner that binds doctors from not exercising their own judgment or choice. We need to re-think our healthcare continuum and reallocate roles and responsibilities of care in order to provide the most appropriate resource improving access, efficacy, and cost efficiency. We need to create a representative group or peers from the healthcare continuum including patients, care facilitators, care providers and payers, housed in a national organization but appointed through the various states and territories to make the required decisions and changes to our delivery system.

This type of system can be created incorporating most of the current infrastructure. It will significantly simply many of the practical problems that plague, insurers, providers, patients and third party administrators. It will significantly lower costs, free resources, lower liability, reduce duplication of services, reduce fraud and provide easier access. Finally, it is designed to provide full portability, transparency and price certainty so that America and Americans can make informed and accurate decisions as to the cost and resulting value for the services they receive and to effectively compare cost and performance between services, providers, institutions, methods and other nations.

Coming next

Article 4 – The Plague of Myths – Myth 3: We can and should be able to live forever!

List of Articles:

  1. Introduction to Healthcare reform: What’s next
  2. Article 1 – Introduction to the Real HealthCare System
  3. Article 2 – The Plague of Myths: Myth 1 Healthcare Costs Too Much
  4. Article 3 – The Plague of Myths: Myth 2 Healthcare, It’s Good for What Ails You!

We all want to live longer

It is clearly an historical ideal to live longer. We all, for the most part, desire not to die anytime soon. I am sure that for most of us it is a completely natural instinct to continue to live. We often find it morally abhorrent to want to die prematurely – like from suicide. It would be completely counter intuitive from what we know about the survival instinct, and the laws of natural selection to decide to become premature feedstock for the organisms that prey on us. Our individual desire to survive is primitive and persistent for most of our lives. And it is safe to say we have been built this way!

Google plans to conquer death.

Recently, Google, the people that brought us ubiquitous search and became known for their informal corporate policy, “Don’t be evil” – announced that they have set up a division to conquer death. Named Calico, CEO Larry Page announced that Apple chairman Arthur D. Levinson will head up this organization.

Levinson and Page have properly reset expectations for the long term results for curing death to focusing on something a little more simple and immediate like curing cancer and other such things. While curing cancer seems like a big deal to most, Page also said, “Curing cancer would only add 3 years to people’s average life expectancy.” Page wants to instead focus on eliminating a greater spectrum of aging problems. It may be wise to not focus too heavily and capriciously on “curing” cancer as a goal because so far cures for cancer have been few and far between.

The idea of conquering death is such a grand vision – a moonshot in Google-speak. It takes the concept that money, science and technology can “cure” everything to a whole new level! It also begs the question, “Can money, Science and Technology really cure everything?” A more appropriate question is, “Can money, science and technology actually cure anything?”

Can we cure everything?

Take cancer for instance, we have spent trillions of dollars, over many decades, in a quest to find a cure for cancer. We have found some ways to treat cancer. We have found some indications that DNA – genetic markets – can give us indications of a propensity to get cancer. We have even, more recently, found other protein bio-markers that may provide methods to detect specific types of active growing cancers, like breast cancer, in general body fluids, like saliva. Yet, we still have not found a cure for cancer. In fact, we disagree, on whether there is a single cause for all types of cancer or if there are in fact multiple cancers and multiple causes. Once thing that is clear after many decades, and many trillions of dollars, is that it does not appear we will have a cure; or even a good enough understanding of what cancer is and how it works to have a real cure, or cures anytime soon.

What is a disease?

The question, “What is a disease?” seems relatively simple. But, like most other things in healthcare, it is not simple at all. We have devoted billions of dollars and years of effort to mapping the human genome. We began the process with the idea that DNA, and the genome, would become the be-all and end-all of the science necessary to finally understand how the body, disease, and other things worked. Along the way, we have constantly felt that the single answer we needed to achieve the dream was right around the corner. But, the reality is that this has been a torturous and long city block in order to get even close to this corner. Now that we are getting close enough to catch some fleeting glimpses of what may lie beyond, we are starting to see some startling ideas emerge. First, we are becoming aware that there may be another critical chemistry that works in the body. While DNA is the blueprint for design, there is another tool-set at work that controls what things do and how they do them. Dubbed the “Epigene,” only in the past few years, are we getting some glimpse of what it may be and how it might work. What we have learned is that the the reality of DNA as the magic bullet of for diagnosis and treatment has fallen short of our early expectations. Another of these fleeting glimpses from around the distant corner is even more startling in its ramifications. This glimpse raises questions that reach to the very core of what the definition of disease really is.

[testimonial author=”Websters Dictionary”]disease /dis·ease/ (dĭ-zēz´) any deviation from, or interruption of, the normal structure or function of any body part, organ, or system that is manifested by a characteristic set of symptoms and signs and whose etiology, pathology, and prognosis may be known or unknown.[/testimonial]

A few of the brave researchers, who have taken a glance around the far corner, are now pondering if what we call cancer really is a disease. Okay! I can hear many of you shuffling your papers, and tapping on your keyboard! I can almost hear what you’re thinking “…OF COURSE ITS A DISEASE! PEOPLE ARE HURT BY IT, FAMILIES ARE DEVASTATED FROM IT AND MANY PEOPLE DIE AS A RESULT OF IT EVERY SINGLE DAY! IT HAS TO BE A DISEASE!!!”

This is all true. We believe that anything that impacts us individually, or attacks members of our family or circle of friends is harmful and therefore it is abnormal, unnatural. We tend to perceive everything we experience, healthcare even more so, as individuals. We innately feel that whatever is good for us – and by extension, our friends and family – must also be good for all. To some extent, this idea is also just as true. As long as we stay in the world of us as individual creatures, we can come to the conclusion that the process that causes what we define as cancer is bad for us all, as individuals, and therefore it must be a disease. This is because if, as individuals, we can all find a way to figure out how not to die from it, we will all be better off. This is an appropriate and logical conclusion based on the scale of our question.

Unfortunately, there is another scale of consideration. One that we seldom, if ever, consider. This scale is decidedly larger than ours. This scale begins above the benefit for the individual and any collection of individuals and rises to what is actually good or bad for us as a species. This also is not just a simple measure of how things affect the species today but, how the decisions we make will also affect the species many generations from now!

Which brings us to the question of what is a disease and, if what we call cancer is really a disease. The few brave and bold souls who have peeked around that distant corner are now wondering if cancer is simply one potential outcome from a necessary and vital process – a core component of natural selection. They wonder if the mechanism that causes cancer is a natural part of the engine that causes both death and evolutionary adaptation.

While disease and death are bad for us as individuals – and by extension for our friends and families – it is often a very good thing for our survival as a species. Death, and to a lesser extent disease, is the ultimate selection system for improvements in species viability – species robustness. When selection pressures, like susceptibility to diseases have been artificially set-aside through biochemical means like antibiotics and drugs, the individuals who would have died or been significantly harmed, continue to thrive and reproduce. In doing so, they are passing on the traits for the same susceptibilities of disease, and increasing the dependence on the artificial means required to fight off the natural selection process. In effect, we become more dependent on technology and artificial methods to stay alive. The collective species becomes less viable, less robust.

The more people that don’t die, the less robust we are because those who were susceptible to the disease did not get cancelled out. This is a very hard thing to consider and the tendency is to just argue it all away. But, it is a real issue and there is more than enough evidence that it has been happening to us for at least hundreds of years. Today, we have dozens of hyper-resistant bacteria where we no longer have any effective biochemical treatment options. We have numerous illnesses we thought cured that are once again rearing there predatory heads and beginning to become problematic. We are also finding that a number of historical treatments, we once thought quite effective, have been delivering unexpected and unwanted side effects to us later in life.

It is likely that cancer, is not a disease per se, it may be more a natural process of mutation that often can cause death but in some cases provides beneficial changes that make us more robust. And, for a number of reasons, some already stated, while death is always a bad thing for an individual creature, it may not be a bad thing for the species at large.

What’s wrong with living longer?

Against the backdrop of the preceding discussion, we need to look at the effect of a significantly aging population on our healthcare system and the underlying healthcare costs. 60-70 years ago, much less money, time and resources were allocated to treating the diseases we now understand are associated with old age. In the 1870s, when my grandfather was born, the life expectancy for his generation was about 48 years old. He, and many like him, actually lived into their 90s, yet, many also died at birth, in their early years, and into young adulthood from accident and disease – particularly from infections.

The population did not see as high an incidence of many of the diseases that cost us the most today. We have successfully converted many of the fatal conditions of old into the chronic, and often very expensive, diseases of today. Then, people that were susceptible to infection and disease earlier died and many fewer were able to live to reproduce. In effect, those that died were selected out of the gene pool. Those that survived were more robust – less likely to succumb to the disease or infection. Due to modern medicine, technology, and biochemical advances from Pharma and Biotech, we are now able to survive these selection pressures – diseases – and reproduce. As a result our children now have a much higher incidence of susceptibility to these infections and diseases and we require a much higher application of medications and therapies to continue to survive.

Since we are now not dying, we are living longer and as such we are experiencing an exponential growth in the cost of care to keep us alive. As we are aging beyond the historical median life span for humans, of 45 years old, the cost of this extended survival is rapidly increasing. As we age, the natural mechanisms to check the population of the human species – diseases – increase in number and duration. Cancer, dementia, cardiovascular disease and many other age related conditions are just as likely better to be perceived as mechanisms of natural selection and population control than as diseases or anything else.

If it’s about individual survival, why should we consider cost?

This is a great question, and would have been a good one to ask in perhaps 1945. Today, while the need for survival may be individual in nature, we long ago decided the cost of survival must be, at least in part, born by the community at large, in our case the nation. The effect on our pocketbook has been significant. While in 1872 people lived for 48 years on average, today we are living about 78 years. In 1872 a person spent relatively little on healthcare and that which was spent was spread relatively equally throughout their lives.

Today, 85 percent of our total lifetime healthcare expenditures will come in the last five years of life. The average numbers are staggering. For a person born today, from birth thru the age of 73, they will spend about $100,000 on healthcare. In the last five years of their life, assuming they die at 78, they will spend 5 times that amount or $500,000. As we continue to extend life, each additional year is adding massively to the end of life weighted cost. Much of our spending for healthcare is also now weighted heavily to treatments and therapies that are for improvements to our Quality of Life, not our basic survival.

We soon will face a difficult and emotionally filled discussion and decision. If most of what we treat in old age are things we characterize as diseases, but are really the result of naturally occurring processes and species control systems, then it is likely the long term costs will be innately unsustainable. If we could find cost effective genetic methods to improve the species – assuming we will find the will to affect the changes to the genome – then there may at least be a smaller cost curve in our future. But these are both big ifs!

Regardless, in the short run, we will see continual increases in the unsustainable level of healthcare costs. We can change how we consider what is included in healthcare, we can lower our expectations and we can alter what we believe should be covered between the healthcare we actually need and the healthcare options we want. If we are willing to do this, we can buy some time to discover more about how things actually work – the science, we can develop more mechanisms to treat the symptoms – technologies and we can make a determination when direct manipulation of the genome is appropriate. If we continue on our current path, healthcare costs will consume our economy. This is a mathematical certainty.


In order to solve for these problems, we must develop an integrated solution that provides the necessary system architecture and systemic controls to address our needs for care and our wants for care separately. We need a system that begins to provide real accountability for the cost and efficacy of care we receive from providers. We need a system that helps inform us as to the real value and results we should expect from the healthcare providers we select. And, we need a system that effectively manages our own choices between the care we need and the care we want; and, the system needs to work in a totally transparent manner to prevent cost shifting from the needs side to the wants side hiding the real cost.

We need to recognize the cost that our instinct for individual survival, combined with our own ingenuity, science and technology is having on us as a species and more immediately perhaps, as a nation. The referenced Whitepaper presents a series of solutions that help to address these issues. The proposed solutions break our healthcare system into two markets characterized between the basic LifeCare we need for all and the optional Quality of Life Care we want for those that make the life choices to obtain it.

LifeCare is constructed to provide the care that everyone needs to survive, thrive and be productive. LifeCare is constructed to assure affordability, access, fairness, efficacy, accountability, price certainty, transparency and transportability. No networks, no deductibles, and no co-pays are needed to assure affordability, efficacy and access. The innate approach also preserves the option for choice. Choice based services are delivered through the Quality of Life Care market. This market driven system provides the variety and value based services that people want.

Both market driven systems are tightly integrated through a single point of administration providing full easy access, comparison, and assistance. This same single point of administration provides the integration of care between the various facilitators, providers and payers with full coordination of care and benefits to the individual user – called participants – across all available sources. This assures that if there are alternate sources of care and funding available, everyone in the participants virtual care group is both aware of it and able to coordinate their activities to assure the best outcome. And, as an additional benefit, this approach should be able to reduce the national healthcare spend by between thirty and forty cents on the dollar.

For more information see: HEALTHCARE REFORM 2.0: Beyond the Partisan Divide Lies Pragmatic Solutions

Coming next

Article 5 – The Plague of Myths – Myth 4: Employer Sponsored Insurance, Co-Pays and Deductibles Have Been a Good Thing!