Sneaky Things That Doctors Do To Survive Financially – Introduction
Dr. Val’s note: My friend and co-blogger Alan Dappen is going to prepare a series of posts to expose the convoluted billing and procedural tactics that primary care physicians adopt to survive the ever decreasing reimbursements that would otherwise put them out of business. Below is his introductory post – others will follow each Wednesday morning here at Better Health. Enjoy!
###
The Doctor’s Huddle
By Alan Dappen, M.D.
On the great gridiron of healthcare, the team of primary care providers is leaning inward, supportively embracing one another. They have huddled together for 15 years, calling plays against their opponent, the Insurance Team. The two-minute warning has sounded and the Physician Team is losing. The Physician’s play book pieces together strategies culled from cocktail party conversations, doctor conventions, office staff meetings, back hallways of hospitals, online blogs, and a plethora of practice management magazines; routinely circulated offering grand strategies to teaching doctors how to tackle the Insurance Team. The rising mantra is “Hit them again! Harder! HARDER!”
This game began in the 1980s, when concerns that rapidly inflating healthcare costs would consume all the U.S. gross national product within the foreseeable future unless something was done. Insurance companies lobbied regulators and advertised to the public not to socialize healthcare. Most people sighed relief when laws were passed granting insurance companies broad powers to regulate the price of care. Little did these politicians realize that they inadvertently were “socializing” care by handing the keys to the health care gold mine to Team Insurance’s privatized, for-profit model.
Up until this point, the healthcare system had experienced 40 years of run-away costs. Patients with insurance hadn’t worried about the costs of care. Inside of this cash rich environment, many important innovations occurred but employers, who subsidized most of the cost, questioned the sustainability of paying for it. All the while, physicians, hospitals, pharmaceutical companies, and medical suppliers eagerly reassured the patients: “Since you aren’t worried about the price, then no one else should worry about it either. We’ll pass the bill to the insurance company–they pay what we ask.”
This modus operandi came to a screeching halt in the late ‘80s, when the aforementioned game began, and Team Insurance was allowed to fix prices via preferred provider contracts. Insurance providers understood that the key to these contracts was not to change the rules for patients, who needed to perceive their care as virtually free so that they would continue to seek care.
Instead, Team Insurance spelled out new game rules in contracts for physicians, where the physicians “negotiated” to accept roughly 50% of their customary rate in order to be listed in the insurance company’s Preferred Provider Directories. These rules were never acceptable to physicians. Docs refusing to sign contracts rudely were awakened by the new world order when 95% of their trusted clients refused to return until they could say, “Yes we are preferred providers.” And, “Yes, all you have to pay us is your co-pay.”
Patient expectations remained unchanged. Quality of service, patience, time to explain oneself, attention to wellness, review of multiple issues, meaningful personal relationships, prescriptions, detailed explanations of risks and benefits of treatments, reviews of other possible ideas in a differential diagnosis, labs, call backs with results, and introductions to specialists were never connected to a price for patients before. After all, haven’t physicians had spent 40 years reassuring patients, “Don’t worry your silly little head about the price.” This time the boomerang came right back at physicians who suddenly were demanded to deliver all the same service for half the price.
The power of “owning” the patient for a $20 co-pay is not lost upon the insurance team. Every year, as they hand out new contracts, these insurance companies congratulate their preferred doctor players for their work, quality, and dedication and try to not rub in the following truth, “We own the doctor and we own the patient. Any doctor who dares not sign our next annual contract for less money will find themselves without patients. Remember, for the patient the big thing that counts is that you can say yes to the $20.00 co pay. Now sign on the dotted line.”
Every “negotiated” dollar saved from paying Team Physician means smiles all around for Team Insurance and their fans (shareholders.) Price fixing initially did control costs, but only for about five years. The U.S. now is back on the trajectory of health care pricing doubling every 7-10 years.
So what’s going on in those primary care huddles? The game plays are called out: “More work, less money, patient demands, protection from malpractice, keep smiling … Somehow we’re going to make somebody cough up our money …Hit them again harder! Let’s do it! On one, break.”
Up next, I’ll show you some of the plays physicians have put into place to survive. And why you the patient might feel like the football. Play along, with us. Hup one, Hup two, hike!
Until next time, I remain yours in primary care,
Alan Dappen, M.D.
This is the best explanation of how insurance and primary-care medicine works that I’ve read. How utterly frustrating this system is for doctors and patients alike.