I recently talked with a physician-colleague of a private medical practice about some of the financial challenges she faces in dealing with the medical system, insurers, and patients. So, you may be surprised at the insights she gave into the realities that private physicians face were rather disturbing.
Let’s start with the insurers who account for the bulk of their revenue. Many payments for procedures from insurance companies (including Medicare) are below the cost of providing the service. This forces physicians to make up the difference on other procedures or find other sources of income to sustain the profitability of the practice.
Conversely, in markets that have just one hospital, the insurance companies have no leverage. If the insurers won’t pay what the hospitals demand, the hospitals can threaten to drop out of the network, leaving the insurers with nowhere to send their insureds. The insurers end up agreeing to pay the hospitals more.
Charges for services provided in-house at the hospital can end up being substantially higher than those same services done by outside providers.
She gave me an example of a lab test that cost $1,500 to $2,000 at the hospital lab but $35 to $80 at an independent lab. Patients do have the option to direct the hospital to use an independent lab. But, how many people know that and will have the presence of mind to make the request? While it makes financial sense to price-shop if you have a high deductible HSA plan, there isn’t much incentive if your plan has low deductibles.
Another challenge is collecting from patients. She says a surprising percentage of Americans maintain checking accounts with no money or keep checks from accounts which have long been closed. While writing bad checks is a crime, those who game the system know they can probably get by with writing a low-dollar check because the cost of pursuing justice is much more than the check is worth.
Most companies would never do business with such a person again. Healthcare professionals tend to have a bias toward giving everyone services, so these same people do return requesting care. She said she and her physician employer have had huge internal arguments about this. Her position is that these people take advantage of the physician in a premeditated fashion and don’t deserve to be extended services. The physician argues that everyone, even deadbeats, deserves healthcare. Since the practice doesn’t provide life-and-death services, she was able to get the physician to agree that if someone has an outstanding bill they need to settle it upfront, in cash, before any new services are provided.
Then there are those who use credit cards and then fraudulently dispute the charges. Some providers let this go because of the difficulty of proving that the charge is legitimate. It requires photographs of customers during the transaction, copies of driver’s licenses, customers’ signatures on the paperwork, and notarized statements from the provider verifying that this was the person who received services and presented the credit card.
A final interesting point concerned patients’ Social Security numbers. She said the only time these are ever needed is when an outstanding bill is sent for collection. Otherwise, they are never accessed or used.
Finally, she was quick to add that only a small fraction of their patients premeditate stealing from them. She also stressed that not all insurance companies or hospitals behave unethically, and some do wonderful, humane acts of kindness. Nevertheless, the lack of integrity that does occur on both sides is infuriating and adds to the cost of health services.
18 months ago
Providers need to better collaborate with purchasers of care on the commercial insurance side of business. In doing so there is an opportunity to provide efficient care delivery, eliminate third party administrative burdens, and allow the ability to focus on total cost of care along with outcomes of care.
Technology enables the connections to patients and purchasers versus through a third party.
Transitioning from fee-for-service to value based care
Junking the Merit-Based Incentive Payment System (MIPS) would undoubtedly let the proverbial air out of the MACRA balloon, dealing a significant blow to the value-based reimbursement shift; right?
18 months ago
National Healthcare Spending Slows for Second Straight Year
A recent analysis conducted by the Office of the Actuary at the Centers for Medicare & Medicaid Services (CMS) has found that, although healthcare spending rose to $3.5 trillion in 2017, the U.S. national health expenditure (NHE) growth rate slowed, declining from 4.8% in 2016 to 3.9% in 2017. Of note, this is the second consecutive year that healthcare spending has slowed, reaching its lowest increase in growth since 2013. This growth has been somewhat slower than the growth rate of the overall economy, which was 4.2% in 2017; however, healthcare spending was still a large percentage of the U.S. gross domestic product (GDP), at 17.9%.This Health Capital Topics article will review this CMS analysis, as well as the various healthcare spending components examined by the agency. (Read more...)
7 months ago
Crowdsourced Physicians: 10 Ways to Decrease Healthcare Costs
- Reduce spending on direct-to-consumer advertising: 52% of respondents
- Shorten or curtail efforts to extend patient life: 21%
- Stay informed on drug prices: 39%
- Limit the use of non-generic drugs: 38%
- Limit the use of expensive tests: 14%
- Improve insurance coverage: 12%
- Improve price transparency; 9%
- Improve generic availability: 7%
- 9.Change regulations: 5%
- 10.Reduce copays: 1%
Notes: From an article entitled, "Are We Solving the Healthcare Affordability and Access Crisis? Physician Predictions Survey from InCrowd Suggests the Answer is, Not Yet
Source: Businesswire, February 7, 2019
Any other thoughts?
6 months ago
A friend once attended an election rally in Canada put on by the liberal party.
When asked about organ transplant, the candidate said : "since we (the government) pay for your healthcare, we technically own your organs already and we plan to make organ donation mandatory."
6 months ago
21% of Gen Z Consumers Are Dissatisfied With Healthcare Cost Transparency
Accenture recently released their 2019 Digital Health Consumer Survey. Here are some key findings regarding Gen Z consumers:
•55% of Gen Z individuals (born after 1997) have a primary care physician (PCP).•1 in 3 Gen Z are dissatisfied or very dissatisfied with treatment effectiveness.•21% of Gen Z are dissatisfied or very dissatisfied with cost transparency.•1 in 5 Gen Z would like a PCP but have not found one that meets their needs.
Source: Accenture, February 2019
6 months ago