2010 April 29 Thursday
Doctor Anger With Insurance Companies
In a New York Times article medical doctor Pauline Chen describes the frustration and anger of doctors with the current health care system. A lesson I take from reports like this one: avoid health insurance for routine care.
For nearly three decades, editorials, online posts and surveys have noted this rising frustration and anger among practicing physicians. But over the last two years, the pot of emotions seems to have boiled over. In all the recent discussions about health care reform, what had heretofore played out only beyond earshot of the exam room suddenly was very public: the tangled, uneasy and often antagonistic relationship between practicing doctors and the insurance companies who pay for the services they deliver.
As a primary care doctor posted recently on Sermo, the nation’s largest online community of physicians: “We are our own worst enemies, as we have allowed insurance companies and Medicare to set the value of our services. Clearly those values they impose have nothing to do with our contribution to the health of our patients or the cost savings we bring about.”
Is this just doctors complaining? Nope. Think about when a doctor calls up an insurance company or submits a form to get approval for some treatment. Do you think the insurance company staffer reading the form or listening to a doctor on the phone understands as much as the doctor? Unlikely. Yet that insurance company staffer can just say no. What if your doctor is right? What about your health?
My advice is to save up for serious medical problems. When the stakes are high pay cash for the best advice. Find out who is great at their specialty that pertains to your problem. Go and see them and pay cash for tests and diagnosis.
I've got a Health Savings Account and a high deductible medical policy because I'd rather directly pay and get services from someone who only has to cater to my needs and desires, not to the demands of insurance companies or government agencies.
I do not see the point of getting a medical insurance policy that co-pays visits to a doctor. You are better off just saving up in advance for future medical problems. Sure, you could get a serious illness that costs hundreds of thousands of dollars. An insurance policy can help you there. But even in the middle of having a very expensive illness you'll be better off if one of the doctors you are seeing is getting paid directly by you to manage your overall care and to evaluate treatments proposed by other doctors. You need an objective viewpoint from a first class medical mind. Your own cash can help you get that when it really matters.
On the New York Times site a discussion related to the article about includes a medical office worker who describes some of the insurance company overhead associated with long term medical treatments.
I work in an internist’s office, and all too often patients who are on a specific medication that best treats their particular chronic condition, one that is Never Going To Change (e.g., Chronic Renal Failure) are required to obtain Prior Authorization for the same medication every six months (sometimes even more often!) This is the height of absurdity. If the medical review by the insurer indicates this patient is best served by a specific medication, that should be the end of it. One “Prior Authorization” and Done should be the goal.
While not always the case, many times a single Prior Authorization call to an insurer can easily eat up 30 minutes of one staffer’s time; fighting through the long-winded automated greetings, voice-response unit selections, more recordings, on-hold time, finally speaking to a breathing human being can make what ought to be a simple transaction an obstacle course. The result over a year? Endless staff time is wasted in jumping through the insurer’s hoops, to the frustration of the patient, and cost to the doctor.
“Step Therapy” requirements, whereby a patient must try and fail two other drug therapies before being permitted to take the medication originally prescribed and denied by insurer, places the insurer’s medical judgment ahead of the primary care physician, and some states are wisely prohibiting this practice.
If you can afford to avoid the insurance companies and government you will be better off.
We are entering an age where a healthy diet, moderate excercise (a 20 minute brisk walk daily on a treadmill), and a reasonable amount of sleep are going to be more important than ever. With our coming kafkaesqe health care arrangements, its really an investment in yourself to avoid preventable chronic conditions at all costs.
Dealing with insurance companies is one of the things they don't teach you in medical school, probably because the faculty are mostly salaried and don't know anything about it themselves. But when a doctor gets out into the real world and has to earn a living, he or she quickly learns that it's eat or be eaten when it comes to dealing with these "third parties," as they're called. Here are some rules I've discovered.
First, when it comes to payment, primary care sucks. This is very unfortunate, since primary care doctors are, IMHO, the most important part of the health care system. They certainly dispense most of the care. But their reimbursements are at the low end of the spectrum, and they have absolutely no leverage with the insurance companies, because there are so many of them, although, paradoxically, not really enough to go around. Primary care doctors have to sign up with every plan that comes by because they need the patients - if they refuse to sign, there are lots of other practices that will take them. If the Obama health plan goes into effect, 30,000,000 previously uninsured people will get access to the health care system, mostly primary care. This may strengthen the position of these doctors in negotiations with insurance plans, which will mean more money for primary care doctors (not a bad idea, IMHO), but it will also raise costs (there's no free lunch in health care, although the Obamaniks seem to believe otherwise).
Second, the doctors who really make money are procedure-oriented ones in niche specialties and subspecialties. A medium-sized town might have a dozen or so primary care practices, but probably only one orthopaedic, urology or GI group. Lately there has been a tendency for different groups in the same specialty to merge so that they can present a united front to the insurance companies. For example, I know of two cities where the urology groups have gotten together to make one big group and then opened their own outpatient surgicenters. They still have to jump through every third party's hoops to get approvals and authorizations, but that's why they have so many staff, and, with the money they're making, they really don't mind all that much.
I really makes sense to pay for as much of your own medical care as you can from your own resources. And by all means discuss fees and negotiate them in advance with the doctors. They're used to offering discounts and won't be offended. And getting the money right away rather than waiting months for an insurance check will have real appeal to them. Also, the government plans, Medicare and Medicaid, are, by far, the lowest, slowest paying and most difficult to deal with.
I've got a Health Savings Account and a high deductible medical policy because I'd rather directly pay and get services from someone who only has to cater to my needs and desires, not to the demands of insurance companies or government agencies. I do not see the point of getting a medical insurance policy that co-pays visits to a doctor.
There is a large problem with this strategy. Through my employer, I have a high-deductible plan with one of the Blues, plus an HSA. To reach my deductible, every PCP visit is filed with the insurer; once the 3rd party/doctor back-and-forth is finished, then I pay with an HSA check.
What I see is that the pricing structure for most services is multi-tiered.
Price 1, Suggested Retail. Say, $80 for a moderately complex primary care visit.
Price 2, In-network price acceptable to the insurer. Maybe $59.73.
Price 3, Price that the insurer will actually reimburse. Maybe $48.17.
So I pay $48.17 at the beginning of the policy year, and $9.63 (20% copay of $48.17) at the end, when my deductible is satisfied. (I'm sure I've got the details of the tiering wrong, this isn't my field.)
Randall, do you pay 100% of $80? If you get a discount, how do you know how it compares to the one offered to BCBS? Aetna? United Health? CMS? A hefty 25% discount off that $80 would still leave you paying 24% more than me, in this hypothetical. Plus, some third-party insurer contracts prohibit physicians from offering discounts to "first party" payers like you.
There's no transparency in pricing.
This is an area where reform could have made an impact, at a modest cost. Make providers post prices for services. Prohibit insurers or CMS from prohibiting discounts for people who pay up front with cash.
One motive for US health care reforms seems to get farther away from the concept of a medical service being a transaction that has a "cost" and a "price" that is part of the "economy". Instead, medical care is a right. Perhaps human rights shouldn't have dollars-and-cents numbers attached to them.
1) I rarely see doctors. I go several years at a time between visits. Knock on wood.
2) I just pay with my credit card and do not try to file with an insurer. I figure I'm not going to reach my deductible. If I ever get something seriously wrong with me I'll have to rethink.
3) I do not intend to touch the HSA money until I am very seriously ill. I want it to just accumulate. So I never try to use it to pay bills. I figure some day I'll really need it and it'll be there.
4) Transparency and prices: I go to my dentist, do a co-pay, and then occasionally I get a bill for some additional amount. They can't even tell me when I'm in their office what Aetna is going to co-pay in all cases. WTF?
5) Getting away from medical services having a price and cost: A lot of treatment is not over life-threatening issues. I do not think it makes sense to treat all visits to the doctor as a sacred right. I look at plastic surgery as a great example. The market for plastic surgery has improved quality of procedures and lowered cost.
It seems to me that your approach in #2 is pro-social, and should be rewarded/encouraged. Instead, if I'm interpreting my own experiences correctly, it's discouraged. I suspect that you pay more for medical services than I do, when it should be less.
To your point in #5 that it doesn't make sense to treat all doctor visits as a sacred right, beyond the market: I agree. I expect that one of the unforeseen consequences of US health care reform will be to accelerate the rate of cost increases, as we move away from a market model. Another example of the beneficial effects of market discipline is Lasik-type vision correction, which has improved and gotten cheaper in recent years, I understand.
Co-payments and negotiated service fees make buying medical treatment using an insurance policy probably much cheaper than buying on your own. I think this very unfortunate. I know my dentist quotes much higher uninsured than insured rates. I know people who have been to the hospital, been given a huge bill, and then watched their insurance company insist on a much lower total bill and therefore a much lower co-pay from them.
I see HSA savings as an urgent priority because I expect a much poorer future America. If I'm right about Peak Oil then we are headed for a multi-year period where each year the economy contracts. We are going to need to become more self reliant and get by with less. My advice is to cut consumption, increase savings, and shift what spending you do toward purchases that offer long term advantages (e.g. hybrid car, CFL bulbs, longer lasting clothes, stuff you can use to cook more food from raw cheaper ingredients).
Even without Peak Oil we are headed for a sovereign debt crisis.
In the last couple of years I've shifted my reading heavily toward financial topics including the rise of Asia, sovereign debt build-up, aging populations, Peak Oil, and other developments that I see colliding with synergistic negative consequences. My posting on these topics understates the extent of my reading on them. Eventually I'm going to turn a corner on my reading and start offering a more detailed synthesis from what I'm learning. But now I spend far more time reading than writing. Hence fewer ParaPundit posts.