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The Patient Protection and Affordable Health Care Act; Governance, Supplemental Funding and Alternatives

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An Independent Payment Advisory Board (IPAB) will oversee cuts in the Medicare Program. The Board will consist of 15 members. Upwards of $700 billion dollars of cuts may be achieved by implementation of various reforms aimed at streamlining the process of actually paying claims for medical service for patients. The implementation of cooperative purchasing exchanges should reduce costs through centralized purchasing and the discounts achieved by buying a commodity in great quantity. In addition, expiring pharmaceutical patents will result in cheaper generic drug alternatives.

The IPAB is charged with implementing specific programs to reduce Medicare per capita spending. A three fifths (60%) Senate vote will be needed to override IPAB cuts. Another way around IPAB proposed cuts would be through supplemental congressional legislation for Medicare.

Under the current Medicare system, physicians can order tests without excessive restrictions or denials. A recent Doctor Patient Medical Association poll finds that nearly three quarters of physicians have reservations about accepting Medicare patients under Obamacare. Luckily, this statistic represents a response rate of only 4% on a poll of over 30,000 physicians. Clearly, according to the poll, physicians have unanswered questions on how Obamacare will work in actual implementation. Here are some examples of real concerns.

Physicians have concerns about disturbing the special relationship between the doctor and patient. For instance, a physician may order a CT scan that provides better information than a cheaper ultrasound yet the IPAB may deny approval of the CT scan for specific types of medical encounters.

The most problematic area of medical practice is in emergency medicine, where life and death issues can be limited to an opportunity window of just minutes. A bureaucratic approval process which delays providing immediate medical diagnostics and care can be fatal to the patient. Examples would include diagnosing and treating a bursting appendix or gall bladder or a near fatal heart attack or stroke.

There are things that an Independent Payment Advisory Board (IPAB) can do to lessen cost burdens. An example would be extending outreach of artificial intelligence (AI) advice giving systems to medical providers. Advice giving systems in medicine provide physicians with diagnostic impressions based upon previously input symptoms, blood profiles and other data decided upon by knowledge profiles developed by a community of medical experts. This AI feature would reduce medical provider guessing in difficult cases where a community of experts could be accessed to assist individual physicians pressed for time and the need for an accurate diagnosis.

Another possibility would be to levy an excess consumption tax on junk food. Theoretically, junk food causes the need for more medical interventions over the long term. For instance, much junk food has over the daily allotment of sugar grams. In addition, some junk food is very high in cholesterol content. An excess consumption tax would provide revenue to balance the Medicare budget while improving patient health and wellness over the long term.

Surpluses in the Medicare fund could be utilized to build up reserves for recessionary cycles, reserves for unanticipated population increases over time or reserves for unanticipated increases in life expectancy. Another important consideration is the investment of Medicare surpluses in low risk investment vehicles like high quality corporate or municipal bonds.

Medicare surpluses must  be utilized with care for  derivative investments . These investments  could undermine the long term financial stability of the Medicare fund or its surplus accumulations. For instance, they may expose the parties to derivative contracts to early contract termination and unanticipated interest rate volatility risks.

Artificial intelligence systems in medicine, together with the implementation of an excess consumption tax could benefit Obamacare, a single payer system or a voucher system. An excess consumption tax basically reduces the demand for medical interventions thereby cutting costs and penalizing people who prefer to eat junk food regardless of the long term medical consequences or costs.

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About Dr Joseph S Maresca

I've taught approx. 34 sections of collegiate courses including computer applications, college algebra, collegiate statistics, law, accounting, finance and economics. The experience includes service as a Board Director on the CPA Journal and Editor of the CPA Candidates Inc. Newsletter. In college, I worked as a statistics lab assistant. Manhattan College awarded a BS in an allied area of operations research. The program included courses in calculus, ordinary differential equations, probability, statistical inference, linear algebra , the more advanced operations research, price analysis and econometrics. Membership in the Delta Mu Delta National Honor Society was granted together with the degree. My experience includes both private account and industry. In addition, I've worked extensively in the Examinations Division of the AICPA from time to time. Recently, I passed the Engineering in Training Exam which consisted of 9 hours of examination in chemistry, physics, calculus, differential equations, linear algebra, probability/ statistics, fluids, electronics, materials science/structure of matter, mechanics, statics, thermodynamics, computer science, dynamics and a host of minor subject areas like engineering economics. A very small percentage of engineers actually take and pass the EIT exam. The number has hovered at circa 5%. Several decades ago, I passed the CPA examination and obtained another license in Computer Information Systems Auditing. A CISA must have knowledge in the areas of data center review, systems applications, the operating system of the computer, disaster recovery, contingency planning, developmental systems, the standards which govern facility reviews and a host of other areas. An MBA in Accounting with an Advanced Professional Certificate in Computer Applications/ Information Systems , an Advanced Professional Certificate in Finance and an Advanced Professional Certificate in Organizational Design were earned at New York University-Graduate School of Business (Stern ). In December of 2005, an earned PhD in Accounting was granted by the Ross College. The program entrance requires a previous Masters Degree for admittance together with a host of other criteria. The REGISTRAR of Ross College contact is: Tel . US 202-318-4454 FAX [records for Dr. Joseph S. Maresca Box 646 Bronxville NY 10708-3602] The clinical experience included the teaching of approximately 34 sections of college accounting, economics, statistics, college algebra, law, thesis project coursework and the professional grading of approx. 50,000 CPA examination essays with the American Institute of Certified Public Accountants. Additionally, membership is held in the Sigma Beta Delta International Honor Society chartered in 1994. Significant writings include over 10 copyrights in the name of the author (Joseph S. Maresca) and a patent in the earthquake sciences.
  • Clav

    The IPAB sounds like a very powerful group. How will its members be chosen? Who will oversee them?

    “…an excess consumption tax on junk food…” Sounds very Orwellian, even unAmerican. The state would tell people what they are allowed to eat?

    Incredible.

  • http://www.lunch.com/JSMaresca-Reviews-1-1.html Dr. Joseph S. Maresca

    IPAB Board members are chosen by the President. They serve for six years at a salary of $165K per year. The members come from professionals in the actuarial sciences, health care financing, the medical community and a few other places. The Board must produce a plan for cutting costs as part of its overall mandate. Congress can over-ride their decision if it is too draconian. The over-ride mechanism is by a supplemental appropriation.

  • Igor

    @1-Clav tells a lie. The IPAB does not tell people what they can eat, it merely levies a tax fee on foods that are known to cause medical problems and thus defray some of societies costs of social care for bad foods. You can eat all you want of bad foods.

  • http://www.lunch.com/JSMaresca-Reviews-1-1.html Dr. Joseph S. Maresca

    The system should penalize people who make bad food choices because these choices will hurt
    the Medicare system eventually by costing everyone more. If you eat bad food, you should pay
    a tax for making that choice. The revenues from an excess consumption tax should be plowed
    back into the Medicare program or Obamacare or even a voucher program if one is ever
    implemented. A voucher program can be problematic because vouchers imply limits. Not
    everyone has the same health care needs. Some people can live into their nineties without
    ever going into a hospital. I’ve known people like this. Other people need medical attention
    from cradle to the grave.

  • Clav

    Draconian, despicable and thoroughly unAmerican methods! Shame on the Obama administration for even thinking about it, but it does prove what, at bottom, all these entitlement programs (and the Democrats who dream them up) are about: control, pure and simple — not “helping the people.”

    Disgusting, absolutely disgusting.

  • Zingzing

    are you talking about the junk food tax, clavos? Because that idea has been around for a decade. Do you agree with tobacco taxes? Excess taxes on booze? “sin” taxes?

    These things do cause problems that society has to reckon with, whether you like it or not. What’s “unAmerican” is beginning to kill us, and if it’s not, it’s defining the fat, fucked up American. God bless booze.

  • Clav

    Do you agree with tobacco taxes? Excess taxes on booze? “sin” taxes?

    Not as “morality” taxes, no. Nor as a means of “forcing” people to do the government’s bidding.

    What’s next? The government imposes prohibitive taxes on on books advocating its overthrow? Taking their children away from believers in Creationism? How about punitive taxing of Jewish bankers?

  • troll

    …what’s the plan to ensure that taxes collected will go to the intended purposes and not another war?

  • Clav

    @1-Clav tells a lie.

    Of course…

  • Clav

    IPAB Board members are chosen by the President.

    So no one — not Congress, not the public, gets to vote on who sits on a board with that kind of power over the people.

    Wonderful.

  • http://www.lunch.com/JSMaresca-Reviews-1-1.html Dr. Joseph S. Maresca

    On taxing junk food, the justification is that the system needs to either raise money or make cuts to the approval of heretofor approved medical diagnostic procedures or treatments. The fairest thing to do is to tax excess consumption of the foods that cause the need for a lot of health care interventions. To some extent, this is being done with alcohol and tobacco. A standard pack of cigs really costs about $3.00. In New York, a pack of cigs is over $10.00. Most of that increase is in various governmental taxes. The same tax scheme is becoming true with liquor.

    The fact that excess consumption taxes should go to the health care fund exclusively is another problem area. The government had a surplus in the year 2000 and the surplus disappeared quickly in the quagmire of wars in Iraq and Afghanistan.

    Clav, ultimately the President of the United States makes the IPAB Board appointments. It’s yet to be seen how the Congress will react to individual appointments.