Losing Patients With Insurers

We are losing patients.  Certain insurance companies are trying to “play hardball” with doctors, unwilling to negotiate with us over their outlandishly low rates.  We have lost patience.

So the signs went up in the exam rooms today:

As of the start of the year, we will only accept X, Y, and Z Medicare advantage plans, and we are presently negotiating with A and B insurance companies.  Please consider this when enrolling in plans.

It is highly likely we will drop one of the insurance plans altogether, and we are one of the last practices in our town to accept them.

Patients are distraught.  Some of them who have seen us for years are now going to have to go elsewhere, while others that just joined our practice because their previous doctors dropped out of the plan will once again have to find a new doctor.  Patients aren’t mad about this, just sad.  The conversations go like this:

“So you are dropping X insurance?”

“We will if they don’t change.  They are paying us significantly less than other plans.”

“That’s crazy.  We just left a doctor because of the same thing.  Now we have to move on.”

“Yeah, I am very sorry about that.  I just want to see patients; I don’t want to do this kind of thing.”

“Well, I don’t blame you.  They pay $1000 for an ER visit for an ear infection, and they won’t pay you what you charge?”

“Apparently not.  They have been playing hardball with primary care docs recently.  That’s why nobody is accepting it any more.”

“I don’t know what we are going to do.  I hate changing doctors again.”

“Call your employer and tell them about this situation with the insurance they’ve chosen.  The only way things will happen is if employers get mad at the insurance companies.”

There is no anger, just disappointment and frustration.  Patients are victims of the strategy insurance companies are using to cut cost.  But why cut primary care?  Why low-ball the one group of doctors who don’t cost that much and who can actually save money?  It makes no sense to me.  It certainly doesn’t make sense to my patients.

Come December, we may be putting a similar sign up:

Due to the 23% cut in our reimbursement by Medicare, we are no longer accepting new patients and may soon be forced to drop Medicare altogether.

It’s happening in a lot of offices already.  The problem is that these patients won’t have an employer to tell.  These patients won’t have a choice.  Medicare won’t come back to the table if there are no PCP’s.  They don’t negotiate their rates.

See those clouds on the horizon?  They look harmless, but they’re not.  It’s a storm that will kill a lot of people if we don’t do something soon.

Rob Lamberts, MD, is a primary care physician practicing somewhere in the southeastern United States. He blogs regularly at Musings of a Distractible Mind, where this post first appeared. For some strange reason, he is often stopped by strangers on the street who mistake him for former Atlanta Braves star John Smoltz and ask “Hey, are you John Smoltz?” He is not John Smoltz. He is not a former major league baseball player.  He is a primary care physician.

70 replies »

  1. For what it’s worth, the company that was the main focus of this is actually responding to our action and is offering us a better contract. They realize we are one of the few providers they have left.

  2. “I can’t make Medicare patients pay cash if I am still accepting Medicare payments”
    Rob, look closely at going non-participating. You’re allowed to charge a little more, the patient pays the allowed amount in full at the time of service and then is reimbursed, and your cash flow improves.

  3. What are you missing here, Dr Lamberts? This health care deform legislation gives insurers and pharma big breaks, continues to collude with these defenders commenting here as alleged experts that physicians are a prime cause to the health care debacle as is, and people just want to pontificate over numbers and business principles to just murky the waters of patient-physician relationships. And you all want to be civil and respectful when the profession of medicine is beyond being trashed, but being stabbed in the back by fellow colleagues and professionals who do not have equivalent training to what we commit to?
    Hey, unbiased and objective readers, physicians are going to be screwed first when this legislation takes hold of their gonads, then patients will find out they are next in line, and then insurers and pharma will start to see that they will be thrown to the lions by both parties in Washington. Forget about the impacts on businesses, this has already come to light and being savaged by the defenders! Scapegoating, the American way these past several decades, now exemplified by the wretched incumbents these past 10 years.
    And you all want to be nice, keep the talk civil and respectable. Go to Paul Levy’s last post here and read my last comment at that thread re what Lundberg wrote in his introduction to “Severed Trust”. It may have been written 10 years ago, but it reads like he was living the issues now.
    I look forward to a Republican Legislative Branch come January, not because I like the party, but right now I despise what absolute power has done to the Democraps.
    And Obama’s campaigning these last two weeks are defining for me: Hope I can change your lives for the better of me and my party, or if you are not with us, you are against us and must be eliminated.
    Bush the third!

  4. 1. The vast majority of insurers put in their contracts that doctors may not reveal the fees that have been negociated. This leads to situations like we see in Massachusetts, where some docs (those affiliated with large institutions) are paid twice as much as others for the same service, due to market share and reputation.
    2. The assumed prohibition on doctors revealing their “non-negociated” charges seems to be a remnant of the days when insurance companies paid the doc her full fee without any discount. Of course, at that time the insurers didn’t want docs comparing fees. Whether this still has any legal significance is unclear to me.

  5. Rob, I have been to a Minute Clinic once when I was in a hurry to get a vaccine. They accepted my insurance and I only had to pay the insurance co-pay of $15 (I think the list price was $30-40). Insurance-wise, it was just like any normal visit to an in-network physician’s office (it was just cheaper for my insurance).
    The reason these clinics post their prices is because they are very competitive, specially for those without insurance. I’m not sure a conventional medical practice with higher prices would be as motivated to post prices.
    As to dropping insurance, I can say that from a patient’s perspective, I usually don’t want to go to a practice that is out-of-network unless I have no other choice. To me that would mean losing the protection that the insurance company offers to its customers. The majority of providers I have dealt with in the past have been fair and ethical, but I’ve met a few physicians and hospitals that have charged for things that shouldn’t have been charged, or charged too much, or billed for things of which I had no prior knowledge. A few of these have tried to balance bill me for charges that went beyond what was in the EoB. Eventually they desist when the insurer intervenes.
    Unless I have very good confidence in the amount of future charges (and perhaps this is possible for primary care), I would be very hesitant to start a medical procedure without insurance protection. I know both doctors and patients hate insurance companies, but they do fulfill a necessary role.

  6. You are right on this one, Rob. Posting your fee schedule (i.e. the fixed amount that you bill all payers, but never get actually paid by any of them), is useless to customers and may even hurt your business.
    A prospective patient with a high deductible would want to know how much he has to pay out of pocket, and that is not your published fee. It is your contractual fee, which is of course lower, but you cannot disclose that amount and the patient may very well misunderstand.
    Here is where insurers are shooting themselves in the foot. On one hand they would prefer members to seek lower cost care, and on the other they prohibit accurate cost information from reaching the member.
    If I were a payer, I wouldn’t worry so much about the collusive power of a few PCPs and post on MY website true pricing (my contractuals) for every single doctor on my network and share the savings with the member in the form of rebates. Of course some quality measure would be nice too, or at least an assurance that network providers were screened by the payer.
    Seeing that most everybody has high deductible plans nowadays, I bet this would put enough pressure on providers to counteract all collusion concerns.

  7. I agree with Paolo, that this is a nice heated discussion without rancor. I appreciate that from all.
    For me, the contractual obligations are there – I can’t tell others what I am being paid by a managed care contract. I can’t share my contracts. That would simply make me in breech of contract. That is not a big concern for me. Medicare payment schedules are published openly, so sharing what I am paid by the public plans is also not a big issue.
    I think that the possible difference between me and the minute clinics is the fact that I am in organizations that negotiate contracts for me. When I am in an IPA, PHO, or other organization where I am teamed up with other doctors on a “panel,” if I share my charges in a way that those physicians can see, I risk antitrust. If I was playing on my own like the Minute Clinics can, I wouldn’t have to worry about that. The hospitals don’t negotiate as groups, so sharing their prices would not take on risk (I think someone pointed out that they are required to do so).
    The bigger question is: why? Why would/should a doctor like me put up my fees and would it help or hurt? In the current environment, with multiple contracts with payments ranging wildly on a single procedure from payor to payor, putting up my fees up front would not help me at all. There would be no benefit to me at all. If, however, I was accepting cash payment up front and then filing insurance as a courtesy so the patient could be paid back (ala Minute Clinic), it may be smart. Minute clinics post charges because they compete on price. The amount of work I have to put in to tear money I have earned out of the payors’ hands forces me to charge as much as I can to recoup what I can. If, however, I receive my payment at the time of the visit and the patient is the one who has to deal with the insurers, then I can compete on price. I honestly wouldn’t mind that, because I think my quality is high enough that I wouldn’t have to price like the “Dollar General” store to get business.
    re. the sabbatical from payment, I am fairly sure that I can see insured patients if they choose to pay me above and beyond (not involving the insurance at all). I think even Medicare patients can do that, but only if I drop Medicare altogether. The rubs are: 1. I can’t make Medicare patients pay cash if I am still accepting Medicare payments, and 2. Once off Medicare, I can’t get back on the rolls for 2 years. I can’t just drop Medicare, regret it, and then rejoin. We had a physician in our practice in this very situation.

  8. Nate- Your weak arguments have fallen the deaf ears of the people who try to work under the crushing collusive power of the insurance carriers.
    Let me ask you this. Why did Sen Nelson wait until the very last minute to give Reid the 60th vote for PPACA in Senate and he did so with just one ultimatum…that all health insurance carrier anti-trust exemptions must be protected in the bill. Coincidentally he was an HMO exec before becoming a Senator. The 60th Dem, who used to be an HMO exec, put his entire party on the plank over shark infested waters for one thing and only one thing…no repeal of the anti-trust exemption. Once Reid caved on that point, and that point alone, he got his 60th Dem vote. This is not their Holy Grail? What planet are you on?

  9. The only price fixing I see is by the government. It is said price fixing that causes inflation. It is a bipartisan failure to learn from the history of the price fix on all Americans in the 1970s.

  10. “Peter your confusing Medicare and Private Insurance. Private Insurance can’t prohibit a doctor from treating anyone or accepting any payment arrangement if they don’t have a PPO contract or some contractual relationship.”
    But Rob does have a contractual agreement with the insurance carriers. Ask him, and ask him to read it. My information was gotten from the local doc here that only accepts cash. He had to take a 2 year sabbatical before setting up his cash business in order to satisfy his existing insurance contracts.

  11. First of all, congratulations to Rob and others for the many good comments on this thread that are informative and that reflect different point of views in a fair manner. Nice to see most posts stay away from politics and personal attacks.
    On the subject of price disclosure, the reason that most medical providers hide their prices is simply because they can. If Jiffy Lube could sell services without posting prices they would do it. But if they did it, they would lose all their customers. This is not the case with physicians and hospitals.
    Every action involves risk, from crossing the street to opening a business. Posting prices creates risk for physicians (at the very least they lose a very good defensive weapon to fight collusion charges). At the same time, there seems to be very little benefit for the physician to post prices. Would Dr. Lamberts attract more patients if his prices were posted? I imagine the answer is probably no or not much. The economic cost/benefit analysis leads to most providers hiding their prices.
    The solution to the problem is not to repeal anti-trust laws, but for the federal or state legislatures/regulators to mandate price disclosure, while providing safe-harbor for doing so. I completely agree with Barry on this point.
    After 2011, restaurant chains will be forced by law to post the calories for the items they sell. They would have never done this on their own. Publicly-traded corporations would never disclose 10Ks to the public if it weren’t required by the SEC. A similar law will be required to bring forward price transparency in medicine. Transparency and disclosure of information always helps the market work better.

  12. DrWonderful, you have a number of factual misconceptions in your comment. First HMO market pentration at its best was around 25%, that means 75% of the market doesn’t even have the evil HMO contract your blaming everything on.
    “There is a reason why premiums, co-pays, deductibles, and denial rates climb each year but doctors fee do not.”
    Premiums are a product of loss ratio, if what you insinuate was even partially true then profit margins would be increasing as well, and they have not. Co-pays, deductibles, and patient cost sharing are a product of the employers insurance contract not the providers participation contract. Employers or individuals pick what their co-pays and deductibles are.
    “Their anti-trust exemption is their Holy Grail.”
    Ever time a liberal throws this out there I give them a simple challenge and not one has ever answered it. Leaving your theory of explotation behind cite even one example of how HMOs benefit from this presumed anti-trust exemption. While the law allows it pratically it is illrelavent. Insurers don’t sit in a room and set prices, it just doesn’t happen.

  13. “One wrinkle as to how insurance restricts the market is if Rob did opt for a cash business he would not be allowed to see his former insurance clients as cash customers.”
    Peter your confusing Medicare and Private Insurance. Private Insurance can’t prohibit a doctor from treating anyone or accepting any payment arrangement if they don’t have a PPO contract or some contractual relationship. If a doctor goes cash only they are basically tearing up their insurance agreements and thus free to do whatever they want. The patient might suffer some financial penalty but that is a different story.
    Hospital price collusion is treated differently then physician. I have this problem at work all the time, someone will ask if something is eligible under the flex plan and when we say no they want to see the specific code that says that. Or they want to set up a plan or procedure and we tell them they can’t and they expect it to be clearly written out. There is written law and defacto law, sure that is not the proper name, my legal education consist of one semester business law in high school.
    Here are some good starting points to understand how convoluted this all is and why the problem is what it is;
    This is why the Rob’s don’t take chances, look at the penalities;
    “Overview: On the books since 1972, the federal anti-kickback law’s main purpose is to protect patients and the federal health care programs from fraud and abuse by curtailing the corrupting influence of money on health care decisions. Straightforward but broad, the law states that anyone who knowingly and willfully receives or pays anything of value to influence the referral of federal health care program business, including Medicare and Medicaid, can be held accountable for a felony. Violations of the law are punishable by up to five years in prison, criminal fines up to $25,000, administrative civil money penalties up to $50,000, and exclusion from participation in federal health care programs.”
    “Under the federal antitrust laws, agreements between competing providers regarding pricing of services or collaborative efforts regarding negotiation of fees constitute per se illegal price fixing.”
    How do you prove beyond doubt when you both published your fees that you didn’t do it in collaboration? Remember if you can’t prove it you go to jail and pay millions in fines and can’t treat 50% of the population again.
    “The Frankford surgeons have stated that each physician or physician group decided on its own not to renew its surgery malpractice insurance. The question is whether such actions may be taken collectively—by a group of unaffiliated doctors acting together under a common plan. The short answer is no, they can’t. But this is a complex legal issue with many gray areas that provide some opportunity for physicians to act.
    The reason that pure collective action would be improper is that it could violate the federal antitrust laws. Although the antitrust laws seem more suited to breaking up Microsoft than preventing two doctors from discussing their insurance costs, at least from the government’s viewpoint, there is a relationship between health care professionals and the antitrust regulatory system.
    The antitrust laws have existed since 1890 and are designed to protect competition. These laws rely on the fundamental principle that genuine competition in the marketplace will yield better products or services and lower prices. The theory is that, if free competition is preserved, competitors will improve their products or services and lower their prices to attract customers from competing businesses.
    There are two basic antitrust provisions: First, a prohibition on monopolies or monopolization—the “anti-trust” aspect that gives this body of law its name (this is the provision used to go against Microsoft); and second, a prohibition on contracts, conspiracies or agreements that unreasonably restrain trade or limit competition. Physicians jointly discussing their insurance costs would arguably fall within this second aspect of the antitrust laws. This provision, Section 1 of the Sherman Act, only is concerned with collective conduct. Thus, conduct that when done by an individual is perfectly lawful may not be when done with others.”
    I don’t know how to bold or underline so let me repeat the last part;
    “Thus, conduct that when done by an individual is perfectly lawful may not be when done with others.”
    “Sermo (http://www.sermo.com), the world’s largest online community for physicians, today announced its weekly hot topic. More than 500 physicians participated in a Sermo post “FTC – Refusal to accept Medicare pricing = Price Fixing.” The discussion focuses on a complaint from the FTC that the Roaring Fork Valley Physicians IPA, by refusing to accept Medicare price controls, violated anti-trust laws. The announcement prompted strong reaction among many physicians who argue they should be able to accept or decline payment terms, like any other profession.”
    “In addition to government enforcement, the antitrust laws provide for private suits by parties injured in their business or property by wrongful conduct. Successful plaintiffs automatically recover treble damages — three dollars for every dollar of damages proven, plus reasonable attorneys’ fees. The cost of violating the antitrust laws can be very, very high.”

  14. Doctors are typically restricted from posting fee schedules per the HMO contracts that they sign. Those fees are considered the property of the carrier and docs accept all these terms when they sign the contract. Any doctors who posts them in public view, either in the office or on their web site, is not only in violation of most HMO contracts but borders on an anti-trust violation whereas they may be accused of “signaling” to their colleagues what an acceptable fee or market might be.
    Most HMO contracts prohibit docs from even discussing the fees, co-pays, or even terms of the contracts with the patient. Anti-trust laws prohibit doctors from discussing fees amongst themselves.
    Meanwhile the HMO’s are exempt from anti-trust which allows them to collude and price fix on premiums and fee schedules. There is a reason why premiums, co-pays, deductibles, and denial rates climb each year but doctors fee do not. It’s because the HMO’s can band together to make it so. Their anti-trust exemption is their Holy Grail.
    You experts better learn what it’s like from the doctors perspective because based on this thread you’re just not getting it.

  15. So does everyone thinking posting prices (market forces) will lower PCP charges? Does Rob really need another mechanism to lower his revenue? Would posting prices lower his costs? Do his patients really want to drive around town looking for a doc based on price, or do they want to be treated by Rob? This is the lunacy of this system. Rob wants to spend his time treating patients, not participate in auto dealer like marketing gimmicks. In single-pay Rob would negotiate through his PCP association to get fair compensation for his services, and the single payer could reduce specialist and hospital charges to provide more money for PCPs, keeping total system costs in check. Rob’s patients wouldn’t need prices posted, Rob wouldn’t need to drop one insurance carrier for another just to keep his head above water and harm his patients in the process. Rob could plan his future a lot better.

  16. Neither insurance carriers nor these walk in clinics give a hoot about the patient. It is about making money, ONLY.
    It is about siphoning greenbacks from the Piggy Bank of America.
    Furthermore, when someone is feeling rotten sick, they are not about to check prices…but Nate is correct.

  17. One wrinkle as to how insurance restricts the market is if Rob did opt for a cash business he would not be allowed to see his former insurance clients as cash customers. The insurance industry considers those people as their clients, not the doc’s. Rob would have to wait 2 years before being able to draw income from former insurance pay clients.

  18. That’s very interesting Nate, but I’m still not sure I understand. In addition to Margalit’s point about Minute Clinics, many states now REQUIRE hospitals to post at least their chargemaster rates (CA being one) while several others require disclosure of the contract reimbursement rates with at least their largest insurer plus Medicare for their top 30-50 inpatient and outpatient procedures based on revenues.
    Moreover, Charlie Baker, the former CEO of Harvard-Pilgrim Healthcare, and current Republican candidate for Massachusetts governor, believes that every price should be disclosed. Suppose he wins his race and pushes that belief through the MA legislature. Is the FTC suddenly going to come in and sue all the doctors but not the hospitals because hospitals have money to defend themselves?
    I appreciate your point about uncertainty and the notion of “defensive business.” Since health insurance in particular, though, is largely regulated at the state level, the FTC should presumably respect state legislative action in this area if a state or two or three decide to outlaw confidentiality agreements as they relate to medical price disclosure by hospitals, doctors, device manufacturers and other providers.

  19. Rob, I am not saying any such thing.
    All this shows is that some privately owned health care providers are publicly posting their charges. Others, as you say, are not. I understand that you are bound by anti-trust laws. I am also very puzzled by this particular interpretation of anti-trust. Please understand that I do not doubt your reality. I just don’t understand it.
    Anti-trust is there to prevent collusion for the purpose of extracting higher payments. I can see how non disclosure of contract amounts may be needed for this purpose. But I have no shred of understanding how publishing one’s charges can contribute to such collusion. So if someone is making you keep your charges “secret”, that someone is horrifically dumb.
    I have a funny feeling that Nate is going to spell out for me exactly who that “someone” is…

  20. Margalit: What is your point? Are you saying my reality is trumped by your research?? Really, you have to have guts to say that I don’t know what my own experience is?? There are obviously other reasons that urgent care centers can do it and we cannot, but come on! Antitrust laws are plain and all of my meetings, all of those lawyers, the whole “messenger model” of negotiation – they are all real things. You are saying we are doing it on bad information?? Because you did some research on it??
    Sigh. That is the problem with academics. If you make a mistake, you say “oops.” If I make a mistake, I get a big fine or a subpoena on my desk. This a constant subject of discussion in the real world. We’ve been talking about it for 10 years. Now you are saying by your searches on the web, we are wrong?

  21. 1) Minute Clinic can drop a million or two on attorney’s and not even notice it.
    2) The only Urgent Care I have seen post their fees are chain owned, if you look at the independent provider owned I have never seen them do it
    3) Who would the FTC accuse them of colluding with? If Minute and Take Care are undercutting each other and the rest of the market that is a pretty strong defence against collusion to raise prices. I don’t see PCPs reducing their cost if they published their rates.
    The reason this is a problem is not becuase there is a law that says you can do X but not Y. Like most problems created by the government it is the uncertainity that makes it so dangerous. Providers have no safe harbor within to operate. Minute clinic is in much better position to take those risk. A pratice like Rob’s can’t afford to defend themselves even if they did no wrong. Call it defensive business.
    I think self funded plans can and should be allowed to captitate doctors without an HMO license. As right as I may be I don’t have the millions to prove it in court. It cost the sate nothing to issue a cease and disist and me a fortune to just produce records they request.

  22. If it is illegal to post fee schedules (charges), how come every Urgent Care and Minute Clinic posts their fee schedule, even those that accept insurance? Out there on the web for everyone to see….

  23. “I resent having high-paid specialists, drug companies, and insurance companies making way more than me and cutting me back to “save the system money.”
    I do too.
    But it is not the specialists who cut you back as much as it is the well connected lobbyists for pharma, device makers, PBMs, and now, for the new player in the game, ie the $ multi billion HIT vendor who claims to improve your efficiency and provides boiler plate to bill at the max, but is really sucking more money out of your pockets.

  24. Sorry, Nate. People with money tend to want to keep it and will try to get the government to allow them to keep it. Even doctors. My frustration is not simply that my salary is going down, it is that the system is going to hurt patients and is dying because of out of control spending. My bills are not the reason for that. My job is to keep people out of the hospital and keep them healthy. I resent having high-paid specialists, drug companies, and insurance companies making way more than me and cutting me back to “save the system money.”

  25. “Just check and see who has the most money, and I suspect you will find the most villainy.”
    I’m prospectivly insulted by this Rob. Someday I am going to be filthy rich and not at all villainy. At least I hadn’t planned to, now I just might buy legislation to make your life miserable for saying that. See its the doctors that make us evil.
    Who was truly evil..Frankenstein or the doctor that made him??????

  26. “I suspect that the largest carriers would not be interested in any of these approaches”
    They would not be interested but even at our size we can force their hand on some things. For example, Anthem hates what I do under their High Deductible plans and every month says they are going to put an end to it. In Ohio there are enough other carriers selling them that if Anthem did follow through I could move enough business it would hurt them. They tolerate me because they have to.
    I was at a large brokers office pitching a website we are starting to work with that allows members to compare providers based on net PPO allowable. The brokers in the office that do smaller groups with me loved it and called in the big shots that do large group. They also loved the concept, to my dismay all they cared about was rather the site was going to work with Anthem and United. If Anthem ignores it, and the brokers wake up and see I’m a better option to start with, they might actually move some large cases to me, again forcing Anthem’s hand.
    One of the reasons price took off like it did was politicians killed the self funded market for 5-7 years. This gave fully insured carriers free reign. Now that self funding has returned the carriers are under tremendous price and innovation pressure. I can come up with or steal a good idea and have it on the street in two months. That’s nearly impossible for BUCA to respond to. Most of our problems are easily fixed we just need 3-4 years of Washington sitting out to do it.
    “cost of operating their administrative infrastructure is probably considerably higher than yours and other TPA firms.”
    My admin fees are usually half theirs.
    “Their strengths relate to their ability to leverage their size to negotiate better discounts from providers,”
    Not any more, hospital CEOs are finally realizing they F’d up bad letting BUCA get 70-90 market share. In a number of Metro areas they are giving higher discounts to regional or other PPOs specifically to prop them up and take business from BUCA. I have other tricks that can negate any discount advantage they have.
    “they can more easily afford investments in information technology as technology and scale become ever more important in the healthcare and health insurance markets,”
    I would disagree with this. The software I use is also used by 200 other TPAs and payors. Not only is that 200 firms sharing the tab but more importantly innovating. At our annual conference every year I always learn of new things some other TPA is doing in some other part of the country. Every year someone new is entering the game as well. Investors are always willing to risk their money if there is a potential huge payoff at the end. For example I know of 2-3 software companies pushing a system that pays the provider at time of service. They call it a real time payment system. I don’t like the concept but we’ll know in a year or two if it works. This was thought up, coded, and on the street quicker then BUCA could schedule a meeting.
    The politicians are pushing scale, my opinion like they said in early 1970s they want a small handful of federally regulated insurers they can regulate to take all the blame for rationing and price controls. Every year they pass more and more laws making it hard for small players to survive. It is without question in the best interest of everyone but the politicians that we have a competitive and innovative market of thousands of players but we’ll see, time will tell who wins.
    “Now, docs don’t do a 5X Medicare charge”
    Hospitals do 5 times Medicare all day long, doctors hardly ever. Think about what you’re saying and think it through. If a doctor charges 5 times Medicare and most evil insurance companies pay Medicare or only slightly more than you’re saying PPO discounts are equal to 80%! No PPO is claiming 80% discounts. An average PPO is in the 20s strong PPOs are in the 40s and top out in the 50s but that is very rare. And that is average over all services including the overpriced hospital.
    “To go to businesses and negotiate risks the insurers pulling away from the table.”
    And if they do? Are you saying you would miss BUCA(Blues, United, Cigna, Aetna) telling you how to do your job and underpaying you for it? Careful how I say this, but you’re exhibiting battered spouse syndrome. They whoop your ass, have no intention of stopping whooping your ass, and you still don’t want to leave them.
    What does BUCA do that we need them for? TPAs can process the paper. There are 100s of reinsurers to take the risk. I assume you doctors could step up and manage the care. Step back and imagine a world without BUCA, what are we missing?
    If you do this in conjunction with the employers what is the carrier going to do? Cancel the employer? Ok so what, they go to the Alt Risk market and pay less for better service.
    “It sounds easy in a comment on a blog post, but in reality, it is very risky and very difficult.”
    We have been doing it for 20 years. Nothing being suggested hasn’t been done before and done successfully. I’ll agree it is outside the box and time consuming but I wouldn’t say risky or difficult. If anyone is assuming risk it’s the employers and they are begging you to give them the chance to do it.
    I expect this out of Margalit or Maggie, I internet studied for three hours before naming myself an expert, Maher but come on Barry. First page of Yahoo search;
    “The Feds are cracking down against “price-fixing” by doctors. The Federal Trade Commission is stepping up its scrutiny of possible antitrust abuses, and it’s setting its sights not only on hospitals and pharmaceutical companies, but on physician practices.”
    It would be very near impossible to publish your rates openly and not get anti-trust attention. Otherwise doctors could easily circumvent the rules by claiming they are publishing it for the public and it was pure coincidence all the cheap doctors raised their prices.
    “For your statement to be correct defies common sense.”
    Is this an argument for or against Rob being right? The fact the law doesn’t make sense should be all the more indication it is real.
    “As I said previously, if the law or the regulations need to be changed, then let’s work to change them.”
    You will have your chance Tuesday to start. Throw out every Democrat you can and elect as many tea party approved candidates as you can. Then when we toss Obama out we can start repealing 45 years of terrible insurance/health care laws.
    “It seems crazy to me because it is. How is it that airlines and hotels have no problem posting their prices and competing like crazy without anyone accusing them of collusion? The same is true for every other part of the economy except for healthcare.”
    The government hasn’t sold trillions of dollars of airline tickets for travel 100 times more expensive then what it charged. Washington spends a trillion a year on healthcare and has 34 trillion in unfunded healthcare promises. They have a vested interest in healthcare matched only in their vested interest in pensions.
    “You just put it out there without speaking with any other doctors or reaching any agreements with them. What would be the practical effect?”
    Hi Barry this is Agent X and Y from the FTC, we’ll be closing your practice, fining you millions more then you ever made, and dragging you through federal court hell for the next ten years of your life.
    “My reading of the article that you linked to suggests that there is a considerable difference between “discussing” fees with a competitor with the intent of reaching an agreement on fee levels and just posting fees to inform patients.”
    There is considerable difference between buying a quarter pound of weed to sell and buying it in bulk for personal use for a cheaper price. Either way your charged with trafficking. You never want to go to court with your freedom dependent on proving intent. I can give you 100 examples of poorly written healthcare law that makes no sense. I.e. under COBRA why if the HR department misfiles a change of address and sends a COBRA letter to the wrong address are they liable for $50 a day in fines forever and the person’s COBRA rights extend forever till they do mail a letter to the right address? Does it make sense small business are put out of business for an honest human clerical error? I.e. 2.0, if a doctor sends me the wrong name with their TIN does it make sense the government fines me $50?

  27. I am willing to share the wealth. I think we PCP’s have more victim than villain in them. We don’t have any power here. Just check and see who has the most money, and I suspect you will find the most villainy.

  28. Rob – This is a fascinating (at least to me) discussion. I wonder how the lawyers feel about the price disclosure issue. It seems to me that since insurers are so uniformly hated by Democrats, the recent reform legislation could have done a lot more to bring about price transparency, including disclosure of both contract rates and list prices, instead of spending so much energy on minimum medical loss ratio rules where natural competition would have dealt with that issue quite well. I can’t help but think that doctors overall support the current system as it relates to rate disclosure while the Obama Administration didn’t feel that it could take them on or the hospitals for that matter so they cut deals with both groups to gain their support for PPACA. So, who is the villain here? Is it the insurers, the lawyers, the doctors and hospitals, the regulators or some combination of all five?

  29. Yes, it is crazy. Most of the articles you read will say that small practices should be allowed to disclose rates. Most are not even opposed to collective bargaining, as doctors are severely disadvantaged with the current system. I repeat: if I post my rates where a “competitor” can see them (on the web or even put it on a sheet that is handed out to patients), it breaks antitrust laws. When I am in my IPA meetings, this is discussed all the time. We often have a lawyer on the phone when the guy we hired to negotiate for us is speaking. He cannot disclose rates or discuss anything close to that. We must send him our acceptable rates which he MAY NOT SHARE with other practices and then come up with a fee schedule offer by the insurance company. Then he is not allowed to approve or deny it, nor is he allowed to influence us one way or the other. He must send the rate to us and have each group decide separately (without discussion) on whether they accept or reject. This is what is known as the “messenger model” and is the only way non-integrated groups can negotiate. We may not EVER disclose our rates to our competitors. We will know what they are being paid by an insurance company who we both accept, but our discussion must be highly guarded on those lines. I have been in a number of groups like this and antitrust is always one of the main things that guides our discussion. We are threatened by hospitals and insurance companies if they think we are discussing things we should not discuss. Do you really think insurers are going to sit back and let the law be loosely enforced? No, they are at a huge advantage in this circumstance (a fact that the lobbyists no doubt are aware of) and would never want to have laws changed in this area. It is insane and bad for America.
    Welcome to my world.

  30. Rob – It seems crazy to me because it is. How is it that airlines and hotels have no problem posting their prices and competing like crazy without anyone accusing them of collusion? The same is true for every other part of the economy except for healthcare.
    As a practical matter, suppose you or any other doctor posted all of your list prices on a website. You just put it out there without speaking with any other doctors or reaching any agreements with them. What would be the practical effect? Suppose a PCP who serves a wealthy clientele in the Buckhead section of Atlanta posts his high fees. Do you really think a doctor with a practice in a poor section of Atlanta is going to suddenly raise his fees to that level? He won’t because he can’t because his market won’t bear it. My reading of the article that you linked to suggests that there is a considerable difference between “discussing” fees with a competitor with the intent of reaching an agreement on fee levels and just posting fees to inform patients. If other doctors can also view the information, what they do with it, if anything, is up to them. Even if they wanted to achieve some convergence in their collective fee structure, they probably couldn’t make it happen. Even if they could make it happen for awhile, they probably couldn’t sustain it without an enforcement mechanism. The whole system just doesn’t make any sense.
    With respect to disclosure of contract rates, insurers at least have something of an argument when they claim that providers who are paid less will want to be paid more while those who are paid more won’t be willing to lower their charges. Some providers, especially in the hospital sector, have a lot more bargaining power than others. To mitigate this and create some countervailing power on the payer side, we need tiered in network insurance products so patients who insist on using high cost providers whose quality is no better than their competitors’ will have to pay more out of pocket for the privilege.

  31. In our case, when my wife went to the hospital (under a PPO) a doctor tried to bill her – he popped his head in the room and said “hi” (never looked at her chart or asked her why she was in) and then billed us over $500 for his visit. The system is broken, but so are many unethical doctors.

  32. I cannot post my charges. If a patient asks what X costs, we can tell them. I cannot, however, post a list of my charges on our webpage or share them in ways that other doctors could find out our fee-schedule.
    Guys, I do this for a living. I live in this world. We cannot share fee schedules. It may seem crazy to you, but that is the crazy world in which I live. If I share my fee schedule with another physician who is not part of my group, it breaks antitrust laws. It amounts to collective bargaining, which is illegal for physicians.
    Google “Physicians antitrust” or “Physicians collective-bargaining” and you will see what I am talking about. If I show my charges in a way that gives access to another physician in my town, I am breaking antitrust laws.
    Really, really. Honest injun.

  33. Rob says: We cannot publish our fee schedule. That means we can’t say “we charge X for Y procedure.”
    Margalit says: “By law, you have to charge the same fee for the same procedure to all patients. This charge is arbitrary. I don’t see who is stopping you from publishing it, particularly since you have to publish it upfront to cash patients.”…. “You are also allowed to publish what Medicare is paying you because Medicare publishes it anyway.”
    Rob – I’m virtually certain that Margalit is right on this. For your statement to be correct defies common sense. It is well established that insurers impose confidentiality agreements that preclude you from disclosing your contract reimbursement rate but how can you not disclose your list price? As Margalit says, you presumably disclose it to new and current patients, don’t you?
    As for the difference between what doctors bill and what commercial insurers and Medicare actually pay, I have a spreadsheet of every service, test and procedure that my wife and I had done going back to 1999 which, for me, includes a half dozen surgeries including CABG and a DES. I could cite lots of specific CPT-4 codes for which the billed amount was more than 3X what my insurer, Highmark BCBS, actually paid and quite a few where it disallowed the charge completely. The difference between hospital billed amounts and what was accepted as full payment from my insurer is often huge. Even for primary care, there could easily be a two or three to one difference between the lowest list price and the highest in a given area or region based on the factors I cited earlier – experience, communication skills, convenient location, practice operating efficiency, etc. If we expect patients to be more cost and price sensitive when they use healthcare, price discovery before services are rendered is critical. It’s routine everywhere else in our economy so why not here too? As I said previously, if the law or the regulations need to be changed, then let’s work to change them.

  34. Rob, I am still not convinced. By law, you have to charge the same fee for the same procedure to all patients. This charge is arbitrary. I don’t see who is stopping you from publishing it, particularly since you have to publish it upfront to cash patients.
    Perhaps you are not engaged in this practice, but I have never come across a hospital or specialist claim that did not require massive adjustment down to the allowable amount.
    On the other hand, your contractuals are probably something the payers don’t want you to share with other docs. Negotiating together is not allowed unless you are an IPA or otherwise clinically integrated.
    You are also allowed to publish what Medicare is paying you because Medicare publishes it anyway.

  35. CT IPA Doc: I know you hear me because of the IPA in your name. I assume that does not refer to beer, although I won’t respect you less if it does. You are very right about the noncompetitive environment that is forced on us and forces us to eat bad charges simply to stay in business. The problem that others don’t realize is that, at least for PCP’s, we have to stay in business. We can’t afford more than a few months in the red. Heck, it’s hard to afford any months in the red. To go to businesses and negotiate risks the insurers pulling away from the table. It sounds easy in a comment on a blog post, but in reality, it is very risky and very difficult. That doesn’t mean it’s not a good idea, but people shouldn’t assume we docs are dumb about this stuff. If it is not being done, it might not be because we haven’t thought of it or don’t have the guts.

  36. Margalit: We cannot publish our fee schedule. That means we can’t say “we charge X for Y procedure.” What we are actually paid for the procedures is not the same as a fee schedule. We charge exactly the same for every patient, but only collect a portion based on our negotiated rate. If you are not convinced that this is accurate, get convinced because it is. We can say what we get paid by a plan and share that with other providers (we will all know it when we negotiate the price if we do so together), but our charges are not to be shared.
    Really. That IS the way things are. Now, docs don’t do a 5X medicare charge (none that I know of). We look to who pays us the most for X procedure (almost never more than 2x medicare, and often fractionally above it) and charge that. Most of us don’t want to put our self-pay patients in the hole, and our patients will see on their bill what we charged them and what was written off. I personally don’t want patients thinking I am trying to gouge them.

  37. Regarding publishing fee schedules: I am not at all convinced that you are not allowed to publish the one fee that you charge for a given procedure, and you can only have one fee for all patients regardless of plan. You may not be allowed to publish the contractual amount that a commercial plan agreed to pay you, but you can certainly publish what Medicare pays you and you can certainly publish the amount you bill out.
    The problem with that is that many docs bill out some crazy exorbitant 5xMedicare and write off the difference between that and what the various plans pay (allowable). The only people expected to pay that fictitious charge are those with no insurance.
    So what is it you want to publish and cannot? And what balance exactly do you want to bill to the patient?

  38. Ms Mahar, you did not disappoint!
    I loved your “someone earning $500,000 finding that his income drops to $450,000” to be the bellweather curve for your example.
    And for “part of what I look for in a doctor is empathy and kindness”; what are the other parts, being underpaid, overworked, and expecting extra attention from patients like you? Yeah, you just reek of much empathy and kindness for physicians in your writings! Wow, you really do not get it, and it relates to what Ms G-A tries to take me to task as well.
    You people are offended by my “vow of poverty” line, because it rings true, and you do not want readers to understand that perspective, eh?
    Hey folks, no one answers to my points re:
    1. the politicians are not covered by their health care legislation, at least the ringleaders behind it.
    2. They never touted it in their reelection campaigns.
    3. why are people defending this sickening attitude that we should accept making less money in multiple professions, not just as doctors but in other fields as well, as the standard of living is declining, and that is fine!?
    Well, I never thought the Democraps could stoop lower than the dregs of the Repugnacants! But, power corrupts all, doesn’t it? Watch this line of thinking spewing out the orifices of our leadership these days: hear these lies enough and you should be happy you have a low paying, overworked, and underappreciated job in America come 2012.
    Hey, there’s an Obama’s campaign slogan for his reelection: Vote for me; Hope you’re still employed for a change!

  39. Nate – Your comment of last night offered a very interesting and innovative group of suggestions for both attacking costs and providing price transparency. I suspect that the largest carriers would not be interested in any of these approaches mainly because the perceived short term market opportunity is too small to be worth their effort. Moreover, the cost of operating their administrative infrastructure is probably considerably higher than yours and other TPA firms. Their strengths relate to their ability to leverage their size to negotiate better discounts from providers, they can more easily afford investments in information technology as technology and scale become ever more important in the healthcare and health insurance markets, and they have better access to the capital markets than small firms.
    Separately, hospitals have consolidated into fewer but much larger entities. In many markets this allows them to negotiate higher reimbursement rates from insurers. If anything this trend has already gone too far.
    For PCP’s, if insurance reimbursement rates are so low, I still don’t understand why don’t more of you just stop taking insurance altogether? If you post your prices and balance bill, you can still offer to waive the portion of the fee that the patient can’t recover from his or her insurer or otherwise afford if uninsured. You can do this on a case by case basis depending on each patient’s financial circumstances just as doctors routinely did in the old days. If patients want you to waive part of your fee, let them provide their most recent tax return, recent pay stubs, or some other appropriate evidence of need for financial aid. Or, is the issue the fear that without the (low) insurance reimbursement, you might not collect anything from the patient unless you did so when services are rendered?

  40. In most states a few commercial insurers account for the vast majority of market share. In my state, Connecticut, only 5 plans have a combined 99% market share, with two (Anthem and United) approaching 75% market share between them. These health plans, plus Medicare and Medicaid, are an OLIGOPSONY, which is a form of an imperfect market where a few purchasers dictate the price to many, disaggregated suppliers. The commercial health insurers are exempt from federal antitrust laws (per the McCarran Furgeson Act of 1947)so they can engage in all sorts of behavior that other industries can’t. Anthem just got their rate request for up to 47% increases rubber-stamped by the CT Dept. of Insurance, when they have kept their state-wide physician fee schedule flat for 3 years. United and its Oxford subsidiary regularly pay below even Medicaid for many services, while their CEO received $102 million in total comp last year. All the while underpaid primary care physicians are expected to invest tens of thousands of dollars in EHRs so the health plans can save even more money while they continue to cut physician fees. With Medicare fees to be cut by ~30% by Jan. 1, 2011, expect thousands of docs no longer to accept new Medicare patients.
    The folks at the DOJ and FTC just don’t seem to get it. They hamstring providers from aggregating to share IT costs while permitting monopolistic/oligopsonistic behavior by many health plans.
    Expect many more physicians to say “NO” to cheap healthplans who refuse to pay reasonable rates. The time has come for employers and physicians to partner to improve care for patients whiule sharing the savings from lower hospital utilization and outrageous healthplan margins and policies.

  41. ” I do think it may take docs and business bypassing insurance companies altogether to fix some of the problems.”
    I could kiss you might right now…if not for the beard.
    I struggle with the same thing with employers and brokers all the time. We don’t have enough employees, my brother’s, mother’s, cat told me it is risky. They complain about the outcome but won’t take any action to resolve it. All you can do is move on to the next one.
    I have one client with about 100 employees. When he first hired us 4-5 years ago we droppe dhis cost 20% roughly and he has been flat since. He tried to share what he does with other employers and they call him a liar and don’t believe him.
    Sorry Rob conservatives don’t wear hat’s like that, just doesn’t happen.
    This is the beauty of talking, something that doesn’t get done nearly enough.
    I see your argument on why it is illegal or legally probmatic to post your prices. Its not an issue for someone like me to post your prices though. If I want to publish a list of doctors in the area and what they charge no one can stop me. This is another area where working direct with TPAs and self funded employers can get you were you want to go.
    For basic services I love scheduled benefits. i.e. we pay $50 for a 99213 and you go anywhere you want, here is what the doctor bills and your responsible for the difference. Probably be a good idea to throw a PPO agreement behind it with a discount to get you down to the net you wish to collect without effecting your charge master for other purposes.
    PPOs as we know them are going to be going through some drastic changes, thinking outside the PPO or figuring out how they are going to work 5 years from now is urgent. Small networks, ACOs, Medical Homes, and Physician only networks are going to be the new norm.

  42. I was going to make some of the same comments that Peter just made. Every other part of our economy allows for price discovery before products are purchased or services are rendered. To suggest that posting prices would allow doctors to collude strikes me as just one more example of the physician guild’s decades long history of trying (usually successfully) to stifle competition at every turn whether it’s price disclosure or allowing NP’s to practice at the top of their license without direct physician supervision.
    There are all sorts of reasons why doctors in a given area and even sometimes within the same group practice could justify different rates for the same service. One doctor might be just out of training, inexperienced, anxious to begin building a practice, and willing to work for less in the beginning. Another might be a popular, highly regarded and well established veteran. Some practices might have lower administrative costs because they operate more efficiently and can afford to pass some of that savings along to patients. Others might be more or less conveniently located. Some doctors may be more affable and have better communications skills than others making them more popular with patients than some of their competitors.
    I’m not sure whether doctors and hospitals or insurers are the primary drivers behind the confidentiality agreements that currently stand in the way of price transparency – disclosure of actual contract reimbursement rates as opposed to list prices. It doesn’t matter. These agreements need to be outlawed and if it can’t be done by regulators, it needs to be done by legislators and governors at the state level or by Congress and the President at the federal level.

  43. “But while the specialists can afford a cut in pay,”
    Ever talked to a specialist about this? Think you’ll get agreement?
    “I can’t share my fee-schedules because doing so would disclose to other doctors what I charge. That is considered anti-competitive. If I know what other doc’s fee schedules are, I can collude with them.”
    Only in medicine would this statement make sense. Every retailer in the country knows what other retailers are charging and even the wide spread use of MSRP to control price margins is not considered “collusion”, although it is. There is a local doc here doing exactly what I suggested (although I don’t think it’s the solution either), with only one employee, and he posts his fees (less than he got from insurance) in the waiting room. No one has charged him with collusion.
    Rob, I’m not totally unsympathetic to PCPs and I think the system stinks. But until there is government controlled pricing for the entire industry you will not be able to take money from “rich” specialists and transfer it “poor” PCPs to control total dollars spent to get some control over system costs.
    “Why not drop insurance and just accept cash? Well, I am actually tempted to do so. The problem is, I like my patients. I would lose most of them (nearly all my Medicare and Medicaid patients) if I did so. Besides, what you suggest is not something that would work if all docs did it. If we all did, the system would implode.”
    Welcome to healthcare in America where the system is imploding no matter what.

  44. OK, Nate. I will talk to my office administrator. I will say that the objection I would likely have is that my office administrator would have NO idea how to handle this. How much is reasonable to charge? What services would we offer? Being the visionary in the practice, I can see what you are driving at and have thought about this many times in the past. But being the visionary, I get labelled as a visionary at times as well. I do think it may take docs and business bypassing insurance companies altogether to fix some of the problems.
    Do you think I am a liberal? No, I am more conservative overall, but my frustration is very high with people who say things are not terribly broken in healthcare right now. I describe myself as a “flaming moderate” – I feel like I am surrounded by lunatics on both the left and the right. The thing I’d probably most favor is not socialized medicine (the thought makes me nauseated) but to allow at least PCP’s to post prices and then balance bill. I would like to accept whatever Medicare pays and then bill the remainder. I would only want to do that if I posted my prices so people would know ahead of time what their cost would be. The lack of transparency in payment for healthcare (the covert way things are billed and payed for) has to go before there is any hope of reform.

  45. “Nate: one practice going to a business would get a laugh from them.”
    Rob, as the TPA that manages these employers plans I can assure you we have done far more obscure things then contracting with a single PCP office. We have numerous clients that contract with a sole local pharmacy. We do one off DME contracting. I have had clients cut deals with a single dentist.
    For all the time you spend writing about how bad things are what do you have to lose talking to a couple employers? I would be shocked if any of them were a fraction as mean as some of us on THCB. If you can take posting here what are you afraid an employer is going to do to you?
    Consider this, while I haven’t done one yet, I have worked with a number of companies that set up in house clinics for larger groups. If employers are willing to spend high 6 figures to build and staff a clinic of 1 doctor why is contracting with your pratice of x? doctors so crazy? By Larger I mean 500-1000 employees at a location.
    If I didn’t dislike your posting so much and you approached me I would jump at the chance to try something. One of the great things about self funding is I am free to try things. If I want to take 10 employees and sign them up for Rob’s Medical home to see what happens I can do that.
    I know as a liberal your type like’s to complain but you really should consider how close solutions are. You don’t need to cut off entire blocks of business and hope it works, you could set up 2-3 ancillary lines of business and hope one grows into something while you continue to do what you do know.
    Another line to consider is targeted wellness program. Employers aren’t all that impressed with ROI on carrier wellness programs and there is still a lack of good options. Take something PCP intensive, like diabetes, and create a wellness program and sell it to employers. I have clients willing to spend some real money for a program that generates real results. Has to be an aggresive program, we measure and test plenty, what is lacking is actionable plans.
    Telemedicine is starting to pick up some steam. An interesting model would be a local one that could follow up with in person care. not sure how many docs you have, could you have someone on call 24/7?, why couldn’t a pratice have a local service instead of national one? You could target employters much smaller then the national firms could but still compete for bigger cases as well.
    I look at all the things employers and insurers/insurees are looking for and it reminds me how bad of business men doctors generally are. When was the last time you looked at the market to see what people wanted instead of just offering what you always have? isn’t it normal for income to drop in a stagnant market? If your selling the same thing you were 30 years ago you usually get paid less for it.
    I would like to see some pharmacist selling independent audit and review of groups Rx usage. Formulary consulting and another set of eyes independent of the PBM. I have come across 1-2 but they were doing very large group. Small to mid size group market is begging for help controlling cost.

  46. Maggie: Sounds like a straw-man argument. You are arguing against the point of this post (which is entirely from the perspective of a PCP) and pointing out that specialists are overpaid. Well…yes. So are hospitals, insurance executives, drug companies, and a lot of other people who don’t sit face-to-face with my patients. But while the specialists can afford a cut in pay, I can’t. A 23% cut amounts to a 50% cut of what I see. My overhead doesn’t reduce by 23% when my reimbursement is cut. My malpractice carriers don’t reduce my rates and my staff doesn’t take a cut in salary. The reduction in reimbursement comes entirely out of my check. I can’t afford that, and until this situation is resolved, medical students will be scared out of primary care, and PCP’s will be scared out of Medicare. I don’t disagree that specialists can stand a reduce in pay, but nobody ever said anything about specialists. My patients would far rather change cardiologists than PCP’s.
    I can’t share my fee-schedules because doing so would disclose to other doctors what I charge. That is considered anti-competitive. If I know what other doc’s fee schedules are, I can collude with them. That is why we can’t negotiate alongside other practices except by the “messenger model.” I am 100% sure of this because I am on the board of a primary care IPA and we get accusations of collusion from the specialists and hospitals on a regular basis (but don’t know each other’s fee schedules, so they are wrong).
    Nate: one practice going to a business would get a laugh from them. FFS is killing our healthcare, but it is what we have at the present. I have kids in school and have a mortgage to pay. I can stand on principle, but I have to do so in a way that doesn’t put my family into major debt or bankruptcy.
    Why not drop insurance and just accept cash? Well, I am actually tempted to do so. The problem is, I like my patients. I would lose most of them (nearly all my Medicare and Medicaid patients) if I did so. Besides, what you suggest is not something that would work if all docs did it. If we all did, the system would implode. There are too many people depending on insurance. I choose to continue in the system, continue raising my voice on my blog and the others I write for, hoping that SOMEONE will see that primary care is being killed. I am being loyal to my patients, despite the fact that I could probably make better money with less hassle if I didn’t take insurance. Are people really criticizing me for loyalty?? Do docs get called greedy when they bolt, and get called stupid when they are loyal? I am called both, so perhaps I am on to something.

  47. @Jane:
    “Pay no attention to Maggie. She is not a friend to doctors. Wanting to be paid fairly and empathy are not mutually exclusive.”
    If you had paid attention while reading…
    “I’m not on Medicare, but if I went to a well-paid specialist and saw signs in his office warning/threatening seniors that he soon might be dropping them…”
    Maggie Mahar was not referring to primary care providers at all.

  48. “On the RUV– The RUV values services in terms of what it costs a doctor to provide them (in terms of time, physical energy, mental energy, amount of education need to learn how to perfrom the service etc. etc.)”
    You really believe that?
    “In addition, as more doctors join large organizations (like Geisinger) that enjoy great economies of scale, the prices that solo practioners and doctors in small practices charge are going to seem high to many patients.”
    No, large organizations, due to reputation and market share, generally negotiate for and charge at higher rates. Arizona Mayo Clinic ring a bell?

  49. Rob, I would imagine that when you were starting out insured patients actually helped your business. I can’t say how you started but I’d be willing to bet you didn’t have a long list of clients and you were happy to get just about any income – even insurance payments. Now that your business is established (partly due to insurance) you can start getting picky on who your patients are depending on the insurance they carry. I have never spoken to anyone happy with the income they’re making, everyone thinks they’re worth more than they’re being reimbursed. So here’s a suggestion, why don’t you go cold turkey and not accept any insurance patients, at least the ones who want you to file and follow-up on their claims. Just charge cash and let your patients file their own claims. Post your rates in the waiting room and trim down your office staff that do nothing but insurance billing and claims. You’d have more time to do healthcare and less time dealing with insurance.

  50. “he problem is the way that we have to charge to get reimbursed – which is to charge the max and write off significantly. It sticks it to the self-pay patients and we cannot discount them without lowering our fee schedule for all.”
    Dogma dies slow, so many complaints could be solved with a little thought and five minutes. Lets make a deal Rob, I feel like starting another PPO, besides the credentialing its so much fun. Tell me what you want the allowable to be and I’ll shoot you a contract. Along with that contract will be a jar and a stack of business cards with my new logo on it. Any time you have a cash customer come in you don’t want to stick it to have them drop a dollar in the jar and take one of my cards, problem solved.
    “So if you want people to have a voice in insurance plan selection, you would have to remove the solely profit driven employer from the equation.”
    Margalit care to step off the fantasy soap box and explain all the $0 deductible and cadilliac plans employers pay for? If you can lay off the hyperole long enough maybe also explain why employers offer insurance at all if it was solely profit driven. Especially in the economy employers could drop coverage all together and still retain their employees, facts seem to dismantle your claim.
    Rob is your office doing anything to get out of the FFS system? If you don’t like reimbursements in the current system changing systems would seem to be a logical first step. Approach some local large employers and tell them you want to start a medical home.

  51. I often work for free. I am not in any plans. Patients pay what they can. I pitch the insurance demands in the trash. I tell any would be “checker of the records” that they can come in and check at $150 per for my disruption. Then there are the PBMs asking me to justify a medication of 15 years treatment that is disease critical. The shredder is helpful in these situations. I do not drive a Mercedes, but I can raise Hell at will.

  52. Rob,
    Pay no attention to Maggie. She is not a friend to doctors. Wanting to be paid fairly and empathy are not mutually exclusive. I have been reading what you have written for quite some time and from what i can see you are very kind. I would pay your fee–no questions asked. Put the signs up. Patient’s need to start paying for office visits out of pocket. We don’t file ins. claims for oil changes. Jesus this is ridiculous.
    Maggie is …………………forget it–not worth the time.
    Good luck and again, put those signs up!!!!

  53. First, let me say that I agree with Margalit (we’re not talking about poverty) and Barry (if a physician wants readers to sympathize with how poorly he is paid, he should disclose what insurers are paying for parituclar services, how long it takes to perform these services, and average annual pre-tax income in his specialty (numbers from a disinterested source.)
    Rob– you are of course right that primary care physicians and others at the bottom of the physician’s income ladder shouldn’t be confused with those at the top. You’re wlso right that relatively few PCPs drive Mercedes.
    But one question: you say you are not allowed to disclose how much Medicare or insurers pays for particular services. I’m not aware of any law which says you cannot disclose this . . Who says that you can’t talk about what you are paid? Quite a few doctors have given me examples in the past. . . .I’m puzzled.
    On the RUV– The RUV values services in terms of what it costs a doctor to provide them (in terms of time, physical energy, mental energy, amount of education need to learn how to perfrom the service etc. etc.)
    But no where does the RUV consider how much benefit the patient derives from the service. As I have argued on HealthBEat, it seems to me that the Value of the service to a patient should be, at the very least, a factor in deciding how much to pay for it.
    Finally, let me quote from a recent column by Brian Klepper and DAvid Kibbe, frequent contributors to THCB:
    They write: “American specialists, who make triple the salaries of their primary care colleagues, are bound to see smaller Medicare checks in coming years
    “While they are incredibly important to us, American physicians over the last half century have been handsomely, even often excessively, rewarded. But now, the system that has been hugely wasteful must find ways to reduce costs while improving quality, and make sure that care is accessible to everyone. These imperatives are emerging just as data and information tools are becoming more available. Health care will become more like a market than before.”
    “Medical practice is changing profoundly, mostly for the better. In the process, doctors will still be highly valued, but many may earn less.”
    Let me emphasize that they are not talking about PCPs, they are talking about specialists.
    Some of these specialists may well threaten that they will no longer take Medicare. But the fact is that a relativelly small percentage of well-known physicians practicing in wealthy parts of the country will be able to keep a practice afloat without seniors. And relatively few seniors can (or will be willing to) pay the difference between what Medicare (or an Advantage insurer pays) and what the doctor wants to charge out of pocket. (Median income, from all sources (including Social Security, invesetment income etc.), for Americans over 65 is just $20,000. Half earn less. The vast majority just can’t afford to help support a doctor earning $500,000, or even $450,000.)
    In addition, as more doctors join large organizations (like Geisinger) that enjoy great economies of scale, the prices that solo practioners and doctors in small practices charge are going to seem high to many patients. Increasingly, a small practice trying to pay for labor, real estate, health IT, etc in most American cities is going to find that this is a very, very tough business model. It will be hard to compete with the best large Accountable CAre Organizations.
    And as patients become more and more cost-consicious, even those who like and are accustomed to small practices, are likely to switch. They’ll also find younger doctors working on salary in the large organizations (most younger doctors want regular hours and don’t want the aggravation of running a small business.)
    Will some docs refuse Medicare? No doubt.
    In Manhattan, where I live, some specialists refuse all insurance. But they are a tiny minority. The vast majority–including the Big Names–at the Major Academic Medical Centers– take Medicare and Medicare Advantage.
    On my blog, a radiologist recently wrote in to say that because hospitals are doing less imaging, his annual income has been reduced from $500,000 to $450,000 “and I can live with that.”
    I think Kibbe and Klepper are right. In the future, some physicians will earn less.
    Adjusting to that fact –rather than railing agains tit—could spare many doctors a great deal of stress and rage. (I personally earn less now, working for a non-profit than I earned when writing about finance for a corporation that paid very well. I wish I earned more, but this is not the end of the world.)
    We’re not talking about a 20% cut that changes your life. We’re talking about someone earning $500,000 finding that his income falls to $450,000–and with any luck, the trade-off will be that he no longer works such long hours.
    A final thought: I’m not on Medicare, but if I went to a well-paid specialist and saw signs in his office warning/threatening seniors that he soon might be dropping them (upsetting, many of whom are suffering from two or three chronic conditoins and fear change of any kind) I would seriously consider dropping that doctor.
    Part of what I look for in a doctor is empathy and kindness.

  54. pcp: I don’t know. I think it is possibly the fact that the docs who work for these types of organizations are not the norm for their rank and file. It’s generally retired and/or academics who have the time to sit on committees or lobby congress. We who are the ones really affected by these things are completely absent from the process. I tried to get involved, but even the ACP would not cover some of the expense I would have from missing a day of work. If they want really effective voices, they need to get some docs who really know what it’s like to live and die by this kind of stuff (and see patients live and die by it as well). That’s sadly cynical, but I think we all are that way to some extent.
    At least blogging gives me an avenue to be heard by some who matter.

  55. Rob: What do you think about the AAFP and the ACP being completely unwilling to confront the AMA on the RUV issue? Thanks.

  56. Peter: It’s hard to imagine anyone more completely missing the point of the posts by Mr. Levy and Dr. Lamberts.

  57. Peter: Are you suggesting that the RUC does well for primary care? It screws us every time. I’ve blogged about the RUC in the past, and like most PCP’s, I would love to see it done away with. The AMA is not my representative organization, it is responsible for much of the mess we are now in because of their bent toward specialty physicians and a fee-for-service payment system.
    I consider myself one of the “medical serfs.” We get the scraps that the specialists leave for us. Please don’t think we physicians act as one group with one interest. The docs with the money and power are screwing those without (like what happens in most societies). It is a cartel, and it is horrible that they have this much power. It’s nothing new to me, though. We’ve been complaining about it for years. My hope is that the public knowledge of it will spread the outrage that I have felt for a long time.

  58. Rob, didn’t you read Paul Levy’s piece here on THCB;
    “Three times a year, 29 doctors gather around a table in a hotel meeting room. Their job is an unusual one: divvying up billions of Medicare dollars.”
    “The group, convened by the American Medical Association, has no official government standing. Members are mostly selected by medical-specialty trade groups. Anyone who attends its meetings must sign a confidentiality agreement.”
    Are we to feel sorry for you? While you docs and the insurance industry bargain for dividing the spoils, the rest of us medical serfs have to figure out how to pay for this without benefit of a cartel.

  59. Oh Wondrous Hatted Doctor: We checked and are compliant. We are not writing things negative about the companies on the signs, just saying that we are currently negotiating with them and MAY not be on them at the start of the year. When asked, we do say that it is because of what we are paid. Notice that I didn’t use names here – it is for that reason I did so.

  60. > It is employers who pick this “cheap” plans
    Patients do it too. Big employers around here would offer two or more choices in insurance plans with varying out-of-pocket versus style-of-coverage points. It used to be HMO or PPO or traditional indemnity, take your pick. People would leave docs for as little as $60/year — that’s at least the lower bound on the value of the “doctor-patient relationship”.
    DeterminedMD is correct that medicine is a service, rather a personal service, and not a right. On the other hand, doctors used to take certain vows in exchange for being taught medicine, and later for state protection of their Guild. This arrangement is breaking down and we’re suffering for it…

  61. Rob,
    I’ve said many times that I think insurance company contract rates for doctors, hospitals and all other providers need to be disclosed. It’s outrageous that uninsured, self-pay patients should have to pay significantly more than you routinely accept as full payment from insurers. If the law needs to be changed to allow you to offer an appropriate discount from list price to self-payers, we should try to change it.
    I wonder if you and other primary care doctors could offer an alternative payment scheme aimed specifically at the uninsured. It would work something like this: You post a sign in your waiting room that says our hourly rate is say, $300 with a minimum charge of $50. Whether you need a consult, an x-ray, sonogram or anything else that can be done in the office, our hourly rate is the same. Any drugs, labs, specialist referrals, etc. are not included.

  62. Dr. D. (Formerly Known as Exhausted), to your third and “most important comment”, you seem to be unaware that people have no say in the choice of insurance plans provided by employers. It is employers who pick this “cheap” plans, because just like everything else in business, having “happy, healthy and productive employees” has a calculable monetary value which is balanced against the cost of health insurance. The bottom line dictates the choice of plans. So if you want people to have a voice in insurance plan selection, you would have to remove the solely profit driven employer from the equation.
    On a different note, I wish doctors would refrain from using the term “vow of poverty”. While I completely understand and wholeheartedly support the plight of primary care physicians, the word “poverty” is not applicable here.

  63. I think I’m putting my San Francisco Giants hat on now.
    Anyway, are you sure your sign and conversations with patients are fully compliant with your HMO contracts? I’m not. Most contracts have restrictions against this type of negative interference with their clients. Yup, that patient of yours is actually their contracted client and your contract with their carrier might prohibit you from interfering with that relationship. Also, since many of your readers likely are colleagues and competitors some might even argue your post here borders on an anti-trust violation and would be considered akin to “signaling” (if they knew specifically what plans you were looking to boycott). Just so you know.
    I would hate to see you get in trouble and I always like to take the opportunity to underscore the severe disadvantage doctors have when HMO’s are exempt from anti-trust laws and providers are not.

  64. Mike: there are more of the patients who come to our practice who can/do drive a Mercedes than doctors in our patients who can. I drive a used Honda Accord with 120K on it. We have 1 in college and 2 to start within the next few years. You must not understand that I am a PCP. PCP’s don’t own $100K cars.
    Barry: I am not allowed to share that information with you, but let me say that over the past 16 years, this is the 1st time we have done this. Up to now, we took rates being dropped on the chin. Now we are quitting an insurance that very few other docs in town accept at the present. The patients do, however, have the right to come and pay for their care. I’ve had some say that to me. The problem is the way that we have to charge to get reimbursed – which is to charge the max and write off significantly. It sticks it to the self-pay patients and we cannot discount them without lowering our fee schedule for all.
    Determined: Agree. The problem is that patients are not the ones who make many of the choices; the employers do. This is the only way we can have ANY leverage with insurance companies: to get employers upset with them. Unfortuately, patients are the ones really wounded in the battle. I am sad that I will lose patients and their families that I have taken care of for more than a decade. If we back out of Medicare, it will be an even sadder day.

  65. First, I hope Maggie Mahar will comment to reassure you and the rest of us physicians that Obamacare will save the day, and enforcing more restrictions and cost cutting on physician reimbursements will make us more invested and caring doctors. After all, we took a vow of poverty, so the bashers here want readers to believe.
    Second, contrary to unpopular belief, all doctors do NOT own $100K vehicles, multiple homes, send our children to private schools and Ivy League institutions, and live on lobster and prime rib.
    Third, and this is the most important comment, patients need to take some accountability in what plans you sign up for. If the premiums are dirt cheap, so are the services they will pay for until proven otherwise. Um, the adage “you get what you pay for” doesn’t apply to health care coverage?
    Lastly, any service or business has the right to not accept customers. After all, the author of this post does in fact believe that term applies to the practice he is involved in, true? From my perspective, as a physician I have the right to not take on every PATIENT who contacts me to access health care services, whether it is about money, conflict of interest, or not the best provider to treat the medical issues at hand.
    Again, please show me and my colleagues who echo my sentiments, where is this contract I signed that said I have to treat every person who crosses my path? You’ll be spending the rest of your life looking for it!
    And, you think things are bad now, patients? Wait until 2014 comes. This country bears a strong possibility of seeing physicians go on strike.
    What, the government will jail us all!? Oh no, I forgot, like Reagan, Obama will just replace us with equally qualified replacements. I’d laugh if that was tried, but, it really is not funny, is it!?!?

  66. Rob,
    I think it would be helpful if you could post a few examples of CPT-4 codes and what the lowball insurers want to pay you vs. what you accept as full payment from those insurers with whom you continue to do business and how much you expect to charge patients without insurance or those with an insurance plan that you no longer accept. Most people with reasonable income and/or savings and other assets should be able to cover the cost of primary care office visits out of pocket if necessary as long as there aren’t too many of them per year. At the same time, if a patient is paying in cash or via credit card and you receive your money immediately with no hassle, he/she should get at least the same discount from your list price that you give to insurers with whom you contract.
    I find it discouraging that people are so conditioned to expect a third party to pay for most of the cost of their healthcare. Yet, somehow they self-pay for oil changes and other routine car maintenance, and it would never occur to them to expect third party insurance to pay for that.