19 replies »

  1. “If there is no hope, we must face the possibility that the demand for – and cost of – health care may be spiralling uncontrollably upward. Clinging to the hope that this is not true, people prefer to believe almost any alternative idea.
    So . . . what if there is in fact no way to constrain the rising demand for health care services?”
    The way to constrain the rising demand is in one of two ways- either we as health care consumers need to be demanding of care that actually has value (and stop demanding that which does not), or the payer system needs to do it and say that anyone wanting to demand “valueless” care needs to spend their own money on it, not the government’s or the insurance company’s. I walk the halls of the ICU, and room after room is occupied by patients who have terminal illness and everyone, provider, patient and family included, know it. Each year, 30% of Medicare dollars are spent by individuals in the last year of life. Fischer et. al have shown that the spending of more Medicare dollars in higher intensity regions has no effect on survival in the end. If a person’s goal is to live as long as possible, ramping up intensity of intervention and access of the health care system in the face of known progressive illness is not getting the job done. It turns out that regardless of how much we would like to believe we entitled to something otherwise, even we Americans are mortal. Breaking the bank of the health care system is not going to change that, and without this fact in the equation, it doesn’t matter what any of the candidates say about access. In fact I get nauseated to think that my taxes could go up so that that money could be wasted by my patient dying on a ventilator from a stage 4 cancer because it was too scary to think about the contingency plan if the 4th line salvage chemo failed. The candidate who starts talking about that part of the problem is the one who is actually interested in trying to fix the system rather than allowing us all to keep ignoring the elephant in the room, wasting millions of dollars with no change in patient outcome.

  2. Great John, I think that’s an approach I’m happy to hear about. There is a local doc here doing much the same thing although you seem to have a better handle on helping some not able to pay full cost for care. In his practice he also does a lot of the labs. The problem is he’s not accepting any more patients. From your comments on the AMA and your practice habits I would welcome you to the table of any discussion on trying to halt this Titanic system.

  3. I charge the same for everyone, except there are some that I charge less to if they cannot afford the usual rates. Payment is expected at the time of service. My charges are close to what I received from insurers, in some cases lower (well child checks), i.e., I pass along the discounted rates to the patients, since my overhead is significantly, significantly lower then when I participated in all of the plans.

  4. John, do you charge more for the uninsured, or are they billed the same? Do your charges reflect what you/other docs would receive from insurers, or are you charging a premium?

  5. Peter–I am all for price transparency. In my cash-only office, there is a menu of services, all clearly, and fairly priced. When my own family members need a service from the local hospital or lab, I call first and get detailed information about how much it will cost, because I can only afford a high deductible health insurance plan. But, if I go to a lab, or call a plumber, and I am angry that they will not provide the service at a cut-rate that does not even give them any profit, I am not going to stiff them on the bill just to teach them a lesson once they pay the collection agency!

  6. Posted by: Lynn | Aug 29, 2006 2:01:25 PM
    “Smart shopping tip #37 for the uninsured.” :>D :>D
    What a great free market solution that works within the system. I noted it for future use.
    Posted by: John Fitzgerald | Aug 29, 2006 6:46:02 PM
    “Lynn, What a wonderful attitude to have. I hope you treat your other service professionals the same way. Do you insist that your plumber give you Home Depot prices or hold your payment until the point of damaging your own credit and cutting the rate they get to the point of paying them below their costs?”
    No John, in that system I go out and get 3 quotes and then see what the Home Depot prices are (which by the way are posted on the shelves) so that I can determine what a fair price would be. If the plumbers look to high from my perception/bank account, I do it myself with Home Depot/Lowes products. Do you want a quote system for docs/hospitals? I would think yes, because a monopoly is still the best way to make money.

  7. “Why focus on administrative costs? I read it here not long ago. More is spent to administer BCBS-Massachusetts than to administer the entire health plan of Canada. That’s why.”
    I think that’s highly unlikely, and here’s why.
    Blue Cross of Massachussetts total administration costs for 2004 were about $480 million. (Blue Cross audited financial reports). Population of Canada in 2004 was approximately 32 million. (Canadian census). If the Canadian health care system operates on less than it costs to run Massachussetts Blue Cross, then it must be operating on less than (USD)$1.30 monthly per Canadian. That’s a bagel with cream cheese. It’s doubtful that even Canada can run a sophisticated national health insurance plan for anywhere that amount.
    Do you have any other source for your statement?

  8. Why focus on administrative costs? I read it here not long ago. More is spent to administer BCBS-Massachusetts than to administer the entire health plan of Canada. That’s why. It’s a downward spiral. Increased utilization and expectations (incl. litigation) is a big part of it too. But it would be easier to find a single payer solution then it would be to tell the Smiths that grandma cannot have her third cardiac cath of the year.

  9. Matt, I would agree that the infernal paper chase you were caught up in is a significant part of current provider costs and therefore “health care” costs – and, if eliminated, would reduce those costs by – pick a number. But still . . .
    Adminstrative costs are not the reason that health care costs increase by 10% a year. And they are not the main reason that the cost of health care in the U.S. is so much higher than in every other country on the face of the planet. The main reason for both of these lies in the cost of the health care itself, fueled by rising demand from an increasingly educated (and aging) population.
    So why the focus on administration? Of course it makes sense to be efficient. But more than that, I think, is that people want to believe – we cling to the hope – that the problem of high/rising health care costs has some simple solution. If the reason for high health care costs is to be found in “administrative waste” or “cost shifting from the uninsured” the problem seems understandable, the solution seems do-able, and there can be hope. If there is no hope, we must face the possibility that the demand for – and cost of – health care may be spiralling uncontrollably upward. Clinging to the hope that this is not true, people prefer to believe almost any alternative idea.
    So . . . what if there is in fact no way to constrain the rising demand for health care services?

  10. Lynn,
    What a wonderful attitude to have. I hope you treat your other service professionals the same way. Do you insist that your plumber give you Home Depot prices or hold your payment until the point of damaging your own credit and cutting the rate they get to the point of paying them below their costs?
    Everyone should know, especially physicians in Columbia, SC, that Lynn Bailey is a Consulting Healthcare Economist, teaches a course at Webster University in “Issues in Business: Entrepreneurship.” If you’re a bill collector, you can search her email address in Google, you’ll find all of the contact info you might need.
    Do you teach your business students such a modern way to deal with escalating healthcare costs?

  11. Rick,
    I can well appreciate your comments. I always find it extremely frustrating when companies or individual people overpromise and underdeliver. It is United that I understand plans to introduce this early next year. Along with Wellpoint’s recent announcement of its intention to roll out HSA’s to their entire customer base (including individuals) starting next January, it sounds like the market opportunity is reaching the point where they perceive it is worth their while to try to respond to it in a meaningful and robust way. Hopefully, this will include giving docs and other providers real time information as to what their contract rates are.
    Their is potential here to provide value and convenience for both consumers and providers. How well the companies can execute remains to be seen. If a lot of people had experiences similar to yours, they’re all going to be from Missouri (Show Me) until they see it work properly.

  12. Barry, don’t even get me started on medical debit cards. I’ve had one with my FSA for two years, and it has yet to perform as advertised. Imagine a scenario like Matthew has described, with paper flying back and forth, miscommunications, and punitive actions against the healthcare consumer, not just on occasion, but with nearly every healthcare transaction! Our HR director (my company has about 330 employees) says she’s beginning to think they are not worth the trouble since most folks report trouble using them.
    I can understand not actually being able to use one at certain provider offices, because there will always be early adopters and late adopters, and these things take time.
    But when you can’t even use it to make a copay at Walgreens without having to reply to a request from the card issuer to confirm the expense as medical — and said request sometimes arrives before, and sometimes after, they have already disabled the card (and sometimes the request doesn’t arrive at all) — then we are a long way from a reliable system.
    Besides, for debit cards to work in the provider environment (like a doctor’s office or hospital), and not just a retail environment (the pharmacy counter or MinuteClinic), we’ll need real-time claims adjudication. Despite all the happy talk you may hear about that, only United and Humana are getting close to it. And they still haven’t got it.
    IMHO, of course.

  13. Being uninsured, I always wait for the collection agency to call. I can usually negotiate a 50% discount for immediate payment. The provider gets 20% and the collection agency gets 30%. If the provider had accepted my original offer of Medicare + 25% they’d have been better off but they didn’t so they get 20%.
    When the ding shows on the credit report. You note it as a medical bill you could get the insurance company to pay so you just gave up and paid the collection agency to end the hassle. Smart shopping tip #37 for the uninsured.

  14. Absolutely PERFECT argument for why physicians ought to deal with billing patients at the time of service, and leave it to patients to bill the insurance companies! Yours is such a common story. Happens all the time! This is why the system is so broken.

  15. Matt,
    I can’t get my contracted rates with Blue Cross (CA)even with repeated requests. It sometimes takes 2-3 hours to get a live person on the line to make such a request and then they simply “forget” to send the info.
    Unfortunately, I don’t have much bargaining power since BC insures about 30% of the patients in my area.
    As far as collections go, we do nearly everything we can (including calling all telephone numbers) prior to taking the costly collections route. If a patient is completely unreachable or still doesn’t pay (after about 90 days), they are then sent collections and discharged from the practice – the vast majority of people that electively don’t pay are habitual offenders.
    If, however, someone has a hardship, then we will work with the patient to provide (an interest free) payment plan.
    Take care and I hope your knee is well.

  16. Not if they don’t bother asking me for the card at the desk, it wont.
    And why dont they know their contracted rates with their biggest plans in advance?

  17. I understand that some of the insurers will be coming out with debit cards (if they haven’t already) for HSA account holders that would allow the doctor’s office to confirm your insurance eligibility and determine what you owe (at contract rates) in real time. If the technology works as advertised, it should probably solve the problem you described.

Leave a Reply

Your email address will not be published. Required fields are marked *