But I’m sure glad to see that you’re all so so concerned about the financial well being of poor seniors. After all that tracks so well with the rest of your combined political philosophies!

We have seen what happens with the use of intermediaries such as Medicare HMO’s and now seem to be substituting something with the same apparent flaws though its greater complexity can confuse the mind leading us to believe that we are adding a marketplace to Medicare. The only market or competition that we are we are really adding is between third parties that will spend as much money as necessary to game the system and subvert the physician’s intellectual honesty. If you like capitated HMO’s you will certainly like Medicare advantage because it has so many more moving parts. I hope that additional emphasis is focused on the physician and his relationship with the patient instead of simply looking at the bottom line and a bunch of empty assumptions. As a physician I have no fear of competition and support high deductibles, but I do fear the insidious ways these third party payers have destroyed the intellectual honesty of my profession.

Thank you for reading my comments.

I am all for free market alternatives to Medicare.
However, from my perspective as a physician in
California the Medicare Advantage plans have been a
disaster. I am specifically referring to the
predominant HMO capitated version of the Advantage
plans.

As an ophthalmologist I have seen how their perverse
incentive system encourgages many eye surgeons to
defer needed cataract surgery. In my practice I see
patients regularly with advanced cataracts who were
told by their previous ophthalmologist that their
cataracts “were not ripe” or similar nonsense. So
seniors in my community quite commonly are not gettng
the one surgery that would make a huge difference in
their quality of life (more than any other procedure
in medicine) because physician are very strongly
incentivized not to perform it.

This is capitation at work and it poisons the Medicare
HMOs from top to bottom. A few people have done well
with it- i.e. enterprising physician executives who
started IPAs who siphon of 20% of the Medicare dollar
before it even gets to patient care. And the HMOs
themselves who siphon off another 12% before it gets
to patient care. So I am not quite sure why you would
advocating a system which promotes deceptive and
hidden rationing and spends 30-40% of the Medicare
premium on administrative and adverstising costs via
the IPA/HMO. And the rationing is hidden. Patients
have no clue that their physicians have strong
financial incentives not to order tests, do surgery,
or even see them in their office. And the Medicare
HMOs with their no or low copay structure gives
patients the exact opposite incentives. So you have an
immediate conflict between patients and physicians.
And guess who wins? “No, Mrs. Jones. You really do not
need cataract surgery. I understand you cannot see to
drive. But cataract surgery is very delicate and you
simply are not ready for it. Oh, yes. Thank you. You
are right. I am the doctor and I know best”.

So as I am no fan of Pete Stark I understand the anger
people have toward the Medicare Advantage plans. They
have the HMOs consumed a huge subsidy above and beyond
FFS Medicare and squandered it on advertising, IPA
administrators, and HMO executive suites all the while
delivering poor care that pits patients and against
physicians. And if you have any doubts about what I
have said I encourage you to randomly dial ten
ophthalmologist in California and ask them if they
would enroll their own mother in an Medicare HMO plan.
And then do the same for every specialist you can
think of. I believe their response would be
educational.

So if you are going to promote Medicare Advantage
plans as a true “free market” alternative to Medicare
I would not lump in HMOs alongside HSAs or even PPOs.
Medicare HMOs are about the farthest thing from a free
market I could think of: hidden capitated fee
structures with huge government subsidies that have
increased dramatically beyond FFS Medicare. I really
believe you have underestimated the rage people feel
toward Medicare HMOs. I hear this rage daily from
patients and physicians. We need to admit they have
been a total failure both medically and financially.
I believe the way forward is with HSAs. And advocating
for both HSAs and its complete opposite in Medicare
HMOs makes no sense. You do not want to be cast in the
role as defender of Medicare HMOs- if you do then
everything else you are advocating will not be taken
seriously and people will question who really is
behind your organization.

Thanks for your time,

John J. McDermott III, M.D.
Fellow of the American Academy of Ophthalmology

In short, the whole process of choice is simply overwhelming for most seniors regardless of their economic resources.