Meeting Minutes – 1/12/17

Those present: President Lee Beecher, Bob Geist, Dave Racer, Hannelore Brucker, Scott Jensen, Carl Burkland, Steve McCue, Carolyn McClain, Lye Swenson, Don Gehrig, Steve Tobriani, Matt Flanders, Twila Brase, Greg Plotnikoff, Tim Herman. Two Board members were ill and could not attend.

1. Twila Brase presented the CCHF Wedge program which emphasizes transparent affordable pricing, freedom of clinician and patient to choose their direct relationship, true patient privacy, No government reporting or other outside interference in doctor-patient relationship, cash-based pricing, protected-doctor relationship, all patients welcome—see JointheWedge.com or 651-646-8935. Commentary: Questions about applicability to an ER was asked and examples of about 200 various practices in 43 states were described. Marketing will depend on funding. The consensus was that this program deserves everyone’s attention—it has already seen real expansion.
2. Peter Nelson and Sen. Steve Jensen discussed current legislative bills (HF 1 and SF 1) regarding the turmoil in the private individual market where premium prices have sky-rocketed from minus 33% of group policy costs years-ago to plus 40% in 2015. Sen, Jensen’s agenda includes price transparency, HSAs, inter-state insurance availability, resurrecting MCHA, an Any Willing Provider approach to narrow networks, address the problems of regional price setting, prior authorization problems, and so forth. Commentary: The apparent cause is ObamaCare repeal of state high risk pools, which put all those people into a small individual market population. The MN bills to subsidize individual premiums will end this year-end. Meanwhile, there is hope that Congress will come through with reforms and that the successful MN MCHA can be revitalized to re-create a MN high risk pool. The difference of GOP and Dayton bills was discussed. MNSure adequacy was questioned and the need for patient-centered free market place was noted.
3. Steve Tobriani, a Mpls neurologist, presented a very interesting health plan. The problem needing solution is the inexorable rise in costs because of a 3,100% rise in MCO administrative overhead to ‘control costs”, while the number of providers has increased 3% and physician pay has risen about 7% from 1990 to 2011—essentially stagnant. Attached as an appendix is his health plan to free employers and workers from paralyzing costs. See page 2-4.
4. RWG and Dave Feinwachs proposal for a Medicaid Family Medical Account (FMA) bill will be discussed the next meeting. See p. 5 for the rationale to be discussed later.
5. Dr. Beecher and Dave Racer noted a pending book recounting Lee’s experiences in medicine. From medical school, to specialization, to medical director, then to private practice, and eventually to a cash only practice.
6. Next meeting will be Tuesday, February 21, 2017—note change of date

Respectfully submitted, Robert W. Geist MD, Secretary pro-tem

Healthcare Plan

By Dr. Steve Tobriani

Presentation 1-12-17

 

1. The essential components to this health plan are as follow:

 

1. An employee owned HSA (Health Savings Account) funded by

pre-tax payroll deduction.

2. An employer-owned HRA (Health Reimbursement

Arrangement) funded by tax-exempt employer contribution.

3. A claims processor hired by the employer and paid by the employer.
4. An employer-purchased stop loss policy. This can either be a

group policy or individual policies.

5. An investment vehicle for funds accumulated in HSA and HRA

accounts beyond a calendar year

 

1. The flow within this plan is as follows:

 

1. An employee’s funds deposited into an HSA for any given

calendar year must be exhausted before the funds in the employer’s HRA account can be accessed for the payment of that employee’s health care claims.

2. It is the responsibility of the claims processor to ensure that

the funds are drawn from the proper account to pay health care claims and to process and pay those claims to the physicians and hospitals in its network. It is the responsibility of the claims processor to make payment in accordance with the fee schedules negotiated with the physicians and hospitals within its network.

 

3. It is the responsibility of the claims processor to draw

payment from the stop-loss insurer once the employer’s threshold for stop-loss coverage has been met.

 

1. Tax law changes needed to implement this plan are:

 

1. HSA legislation must allow an HSA to be coupled with an

employer-owned HRA. Currently, the tax law requires an HSA to be coupled with a high-deductible insurance plan.

2. Section 419 of the IRS Code must be amended to allow funds

to accumulate in an employer-owned HRA without subjecting the funds to taxation. Current law provides for taxation of any funds in the account beyond what is needed to pay 13 months-worth of claims and consequently prevents accumulation of funds within the account.

3. Legislation is needed to allow small businesses with fewer

than 100 employees to form a small business alliance through which the lives in those businesses could be combined for the purpose of purchasing a stop-loss policy to cover the members of the alliance.

 

1. Benefits for Employers

 

1. Health insurance premiums no longer exist as the employer

is directly funding the health claims of its employees. Consequently the escalating cost of premiums also ceases.

2. Healthcare costs will stabilize. The reality is that these have

been flat for 20 years. It is the health insurance premiums that have been rising beyond the rate of inflation, not healthcare delivery costs. It is the administrative cost of healthcare (i.e. the cost of managed care) that has been driving the escalation in our health insurance premiums and this will no longer be needed.

 

3. If the employer funds an HRA account with a sum equivalent to what would be spent purchasing an insurance policy for his employees, the employer will retain 30% of those funds in his/her HRA account each year if utilization rates are unchanged. 30% of deposits accumulated annually for 15 years along with an 8% return on the funds invested would produce an account worth approximately $13,000,000 per 100 employees at the end of 15 years. The investment return on that account would then equal the employer’s annual contribution. From that point, the account becomes self-funding and the employer would not need to provide further contributions toward healthcare.
4. Given stable rates of utilization the employer’s HRA account

will double in value every 15 years.

5. The funds previously devoted to healthcare can now be

devoted to expanding the employer’s business.

6. The funds in the employer’s HRA account, while they cannot

be used for any purpose other than healthcare, are an asset owned by the employer. Therefore, if the company is privately held, this is an asset that increases the value of the company when sold. If the company is publically traded, this increase in asset should translate to an increase in share price.

 

1.  Benefits to the Employees

 

1. There are no premiums to be purchased. There are no

deductibles. There are no co-pays.

2. The employee’s only healthcare cost is his/her pre-tax HAS

contribution. If the employee is young and has no healthcare expenses, the healthcare cost for that employee is zero since the funds deposited in his/her HSA remain in his/her HSA.

3. As with the employer, the funds in the HSA can accumulate

to a point where the investment income replaces the employee’s annual HSA contribution allowing the account to become self-funding. From that point the employee has no further healthcare costs.

 

1. Benefits to Healthcare Professionals
2. The claims administrator is paid by the employer; not by

the healthcare professionals. Consequently, the claims administrators will be competing to obtain the best network of healthcare professionals to provide the most effective healthcare for the employers that hire them rather than the cheapest network of healthcare professionals. This should allow the market to appropriately reward talent and experience rather than subjecting healthcare professionals to fee schedules imposed upon them by insurers eager to extract as much profit as possible from their provider networks.

2. Healthcare professionals will regain the autonomy to treat patients based upon their needs and be freed from mindless algorithms imposed upon them by health plans.

 

1. Benefits to Society

 

1. There is no path to economic prosperity in the U.S without solving the healthcare problem. This solution will pave the way to unprecedented prosperity by freeing companies from paralyzing healthcare costs while still providing incomparable access to quality healthcare.
2. The equity markets will surge with the capital influx from

this plan.

3. Employers will expand employment opportunities.
4. Employees will have increased access to more

prevalent better paying jobs.

5. As HRA accounts double by 30 years, employers can fund healthcare expenses for their retirees, saving Medicare from insolvency without increasing Medicare taxes.

 

 

Steven Trobiani, M.D.

©February 26, 2016

 

 

Bullet point background:

Family Medical Accounts (FMAs) for Medicaid:

A program with cost savings, improved access, and equity,

when families are empowered with money[1]

update 12-13-16

• Major Medicaid funded Medical coverage—Medical Assistance benefit schedule
• Insures unpredictable and unaffordable risk (catastrophic expense)—consider re-insurance bids
• Insures preventive/prenatal services/well child and baby care/meds for some chronic conditions (diabetes, hi BP, cholesterol, epilepsy etc.), and so forth.
• Deductible FMA Medicaid funded self-Insurance for predictable and affordable risk (routine expense)
  • FMAs are money, not vouchers for insurance.
• Debit card is cash for medical out-patient use and gives seamless access to major medical expenses—there is no cash gap.
  • Electronic deposit banked by state (or contracted private bank)
• Personal/family Ownership à later portability.
• FMA surplus portability (under state, not personal, rules).[2]
  • State benefit set flexible with allowable [213(d)] services at State’s choice.
• Choice of provider: network and/or Any Willing Provider out of network
• TPA coordination of all accounts (FMA; major med; investment)—state may contract.
• Patient/family money = economic equity and medical market power
• Medicaid “cash gap” is eliminated before major medical coverage.
• Patient-centered quality care with market power choice: personalization, timeliness, continuity, and trust in referral.
• State financial risk low: program eliminates expensive corporate middleman.
• Funding: Medicaid by MN State/CMS money (no change)
• Decreased administrative costs (maybe >10%) and family prudence may cause same decreased inflation rate seen in the private sector.
• The initial program excludes the dual eligible Medicare/Medicaid and disabled populations—but could be later extended and even could include MNCare with graduated premiums.

Other issues:

• Community and bipartisan political support to be established.
• Federal waivers—a problem if feds favor corporations and hostile to families controlling money.
• Affordable near universal Health Insurance might be achievable using FMAs and private HDHP policies focused on the MCHA population and the few MN uninsured.
• Poor pay of Medicaid providers is an important issue if Medicaid “coverage” is to mean adequate access. (At least providers would have immediate debit card payment and no AR problem.)
• Medicaid population health generally poor; may require higher FMA deductible (contribution limit) to encourage prudent use—not a paradox.

 Goals: Joseph V. Kennedy (PhD—economics; M.S; J.D.), a noted economist has written that, “Government policy is far more effective when it channels market forces than when it overrides them”.[3] Individuals owning and controlling the resources that the government shares with them are likely to be prudent, while gaining equity in choice of medical care access and quality. “Ownership of resources is the path to a decent life free of poverty and dependency: a goal for all Americans.”³

* Overhead best estimate by CMS: CMS Health Care Industry Market Update—Managed Care March 24, 2003:15 [23.7%]. http://www.cms.hhs.gov/CapMarketUpdates/Downloads/hcimu32403.pdf

** Preventive and chronic disease care is paid by the Major Medical Insurance (as in most private sector HDHPs) including prenatal services/well child and baby care/smoking cessation/mammograms, prostate exams, colorectal exams/chronic disease management (e.g., meds for diabetes, hi BP, cholesterol, epilepsy)/and so forth.

Poor pay of Medicaid providers is an important issue if Medicaid “coverage” is to mean adequate access.

• At least providers would have immediate debit card payment eliminating AR problem.
• Legislators must allow payments to cover the real cost of delivering services and for any willing provider-like coverage—savings from eliminating corporate overhead would be available.

For a more detailed and referenced program outline, contact:

Robert W. Geist MD
7 Sandpiper Lane
St. Paul, MN 55127-6310
(651) 484-6968
rgeistmd@comcast.net

[1] McKinsey and Co CDHC Report, June 2005. Scandlen G. Working as intended. Consumers for Health Care Choices Report. Nov. 2007 www.chcchoices.org.. Phelps CE. Chap. 5. Empirical studies of medical care demand and applications. In: Health Economics. Addison-Wesley. Boston, MA,2003:137-148. Sullivan ME. Blue Cross Blue Shield member experience survey 10-20-08. Kaiser Family Foundation survey 2007. AHIP 2008 Census of HDHPs and HSAs http://www.ahipresearch.org/pdfs/2008_HSA_Census.pdf (accessed 5-28-08)

[2] State FMA controls possible, since the account is not a fed qualified HSA insurance policy, but rather a state program of money.

[3] Kennedy JV. Introduction ix, and Chap. 7 Affordable health care: In: Ending Poverty. Rowan & Littlefield Publishers Inc. Lanham, Maryland. 2008