Physicians

PHYSICIANS: The sky is falling

Capitol2Mark McClellan says that Medicare payments to physicians are going down 5%. This of course is leading to political pressure, with the President of the AMA writing op-eds showing that the sky is indeed falling on the heads of seniors. And don’t let any of those pesky researchers at HSC tell you that cuts in Medicare reimbursement actually don’t lead to doctors dropping out of Medicare.

Oh well, perhaps the doctors will make their money back by investing in more specialty hospitals–after all, that moratorium is over. Let the self-referrals begin.

CODA: The AMA Pres uses this sentence "In 2006, Medicare is reimbursing physicians about the same as it was in 2001 — that’s in real terms, not adjusted for inflation." Someone needs to take him to a very basic economics class. "Real" means that it is adjusted for inflation. He means "nominal". And of course someone else needs to explain the P x V = I phenomenon.

 

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Phil Navarrajsdaymark schoenbergRoger HughesJohn Fitzpatrick Recent comment authors
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Phil Navarra
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Phil Navarra

What do you think of the practice of Physicians using two or more tax id’s to increase the compensation for their services. They file claims with the 2nd Tax Id which in not under contract with certain insurances to intentionally get the “out of netork” price which can result in a higher compensation. This is becoming very popular in my area(Nashville TN)

jsday
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jsday

Barry, I have read your comments on two blogs and I have come to the conclusion that your opinions are similar to mine. I am assisting with the writing of a bill in my state that will require “price transparency”. I would like your opinion on the topic. All of the debate above is well and good, but it is only speculation until we get true price transparency. I feel for the doctors who are trapped within the constraints of hospital systems and insurance billing contracts, but as Peter has pointed out, there are plenty of doctors abusing the system,… Read more »

mark schoenberg
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mark schoenberg

hi
where do i go to find quantitative data on the subject of US physician reimbursement and compensation both in aggregate and by speciality?
thanks

Roger Hughes
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Interesting discussion. In my opinion, much of the underlying tension in the thread is due to the inexorable industrialization of health care, in which professionals are treated as labor. In the industrial model, replicable, evidence-based algothrims replace “professional judgment” based on “experience.” The net result, eventually, is that many docs will move up the industrial food change to “manage” the data or else to focus on extremely profitable and highly technical interventions; direct relationships with patients will be taken over by those lower on the food chain. One might envision a future in which a majority of docs won’t see… Read more »

John Fitzpatrick
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John Fitzpatrick

The beauty of the internet is that if you look hard enough, you can find out quite a bit about a person. For example, did you know that Peter also thought that the people of New Orleans got what was coming to them in the form of Katrina:
http://www.indyweek.com/gyrobase/Content?oid=oid%3A27147
But his wife, a nurse, seems really nice:
http://www.indyweek.com/gyrobase/Content?oid=oid%3A15451

pgbMD
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pgbMD

Good luck trying to get Peter’s profession out of him. Until he fesses up I will assume the worst. Probably a lawyer or maybe a retired Canadian tax collecter.

John Fitzpatrick
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John Fitzpatrick

Peter, you mentioned you proudly earn a higher-than-average income. Maybe we should compare. What do you do, and what do you make for doing it? As a family physician, I have earned an average of $145,000 the last four years. Interestingly, I averaged $160,000 5-8 years ago. For this money, I work around 75 hours a week, including going in to the hospital an average of 2 nights per week (after 10pm). For this money I studied through 4 years of college, 4 years of medical school, and 3 years of residency training. I was lucky to come away with… Read more »

Barry Carol
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Barry Carol

Peter, I suspect that the pricing issue could be largely resolved, or at least mitigated, if (1) we had complete transparency with respect to what Medicare and private insurers actually pay for services, tests, and procedures and (2) we removed the prohibition against price discrimination in billing. Then, Medicare and other third party payers could be billed at their agreed upon contract rates while self-payers could be billed at anything from a reasonable list price for those clearly able to pay to discounted or even free care for those who can demonstrate financial need or hardship. Over time, the gap… Read more »

Peter
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Peter

Well Barry I guess “if” the list price is the one that the provider establishes to cover costs + reasonable profit. But I suspect that, as with all list prices, the number is set artficially high to accommodate the marketing side of the business. The furniture business is notorious for setting unrealistic high list prices that it knows it won’t sell at, but for which 70% discounts look great to the buyer. I wonder when this health system progressed from direct pay by consumer to insurer pay what those initial numbers looked like? Was the consumer then paying an inflated… Read more »

Barry Carol
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Barry Carol

Peter, I can’t answer your question definitively, but maybe one of the providers can. My guess is, particularly with respect to hospitals, the insurer is telling the provider that you will get access to x thousands of lives that have their insurance with us. In exchange, we want a reasonable discount off your list price for that access which should provide you with a good base of business. We will not, however, guarantee you any specific amount of volume. The provider also gets the assurance that he/she/it will, in fact, be paid at the agreed rate whereas the self-pay patient… Read more »

Peter
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Peter

Posted by: Barry Carol | Aug 13, 2006 5:52:27 AM “Peter, I can see this one both ways. As you say, not having to deal with billing the insurer and waiting for payment suggests that the cash customer is less costly to serve and should justify a lower rate, assuming he or she pays at the time of service. On the other hand, someone who has purchased insurance and paid a hefty premium is quite likely to use less in healthcare services than the premium paid. Though the insured person also bought the peace of mind that comes from knowing… Read more »

Barry Carol
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Barry Carol

Scott, Thanks for the follow-up information, especially about Tenet (a company I hold in especially low regard) and its charges vs CMS. These arbitrary and ludicrously high list prices combined with their expectation that the uninsured should actually be prepared to pay them is an extreme example of arrogance. I wonder how their CEO, CFO and other executives would feel if they were uninsured and on the receiving end of such bills. This is another reason why I think CMS rates for all DRG codes should be easily accessible on its website to use as a benchmark for patients to… Read more »

Scott Robertson
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Barry, At our office the average collection from an insured patient (this includes all types of visits and payers) is about $92. The vast majority (about 85%) of visits are for established patients and we only charge $75 for this type of visit. Clearly, my office policies are very “arrogant” and offensive to some readers of this blog. A cash urgent care visit across the street from us is about $150. Comparably, Tenet charges about 700% of CMS for their hospital services, so while 150% of CMS may seem steep, it is about a 75% discount from what the uninsured… Read more »

Barry Carol
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Barry Carol

Just to follow up on my prior post, the negotiation between the large retail drug chains like Walgreen and CVS as well as big box retailers like Wal-Mart and Costco vs insurers and state Medicaid systems is a battle between parties with comparable economic power. Walgreen, for example, can and does sometimes walk away from a large block of business if it feels it cannot earn an adequate return under the proposed contract terms. Usually, the parties eventually get together and work out a mutually satisfactory arrangement. This balance in economic power accounts for why I think a 15% spread… Read more »

Barry Carol
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Barry Carol

“It seems that a person paying cash should get a better price, as the doc does not have the wait and hassle of insurance billing.” Peter, I can see this one both ways. As you say, not having to deal with billing the insurer and waiting for payment suggests that the cash customer is less costly to serve and should justify a lower rate, assuming he or she pays at the time of service. On the other hand, someone who has purchased insurance and paid a hefty premium is quite likely to use less in healthcare services than the premium… Read more »