How Doctors Are Trapped, Part II

Of all the people in the health care system, none is more central than the physician. Fundamental reform that lowers costs, raises quality and improves access to care is almost inconceivable without physicians leading and directing the changes. Yet of all the actors in modern health care, none are more trapped than our nation’s doctors. Let’s consider just a few of the ways your doctor is constrained, unlike any other professional you deal with.

No Telephone. Sometime in the early part of the last century, all the other professionals in our society — lawyers, accountants, architects, engineers, etc. — discovered the telephone. It’s a handy device. Ideal for communicating with clients. Yet even today I find that I can rarely talk to a doctor by phone. Why is that?

The short answer is: Medicare doesn’t pay for telephone consultations. Medicare has a list of about 7,500 tasks it pays physicians to perform. And talking by phone isn’t on the list — at least in a way that makes it practical. Private insurance tends to pay the way Medicare pays. So do most employers.

At a time when doctors feel like they are being squeezed on their fees from every direction by third-party payers, most become very focused on which activities are billable and which are not. And most are going to try to minimize their non-billable time.

No E-Mail. Sometime toward the end of the last century, all the other professionals discovered e-mail. In some ways it’s even better than the phone. Everybody e-mails everybody these days. Even the corner liquor store e-mails me when they have a bottle of wine they know I will like. Everybody e-mails everybody — except doctors.

Why is that? Again, the short answer is: this is another task that’s not on Medicare’s price list — at least not in any way that makes e-mailing practical. Since Medicare doesn’t pay, all the private insurers who piggyback on Medicare’s payment system follow suit.

The fact that patients cannot conveniently consult with physicians leads to two bad consequences. First, the unnecessary office visitors (say, patients who have a cold) expect at least a prescription in return for their investment of waiting time, and all too often the drug will be an antibiotic that won’t help their cold. Were e-mail or telephone consultations possible, the physician might recommend an over-the-counter remedy, thus avoiding the cost of waiting for the patient and the cost of degrading the effectiveness of antibiotics for society as a whole.

At the same time, rationing by waiting at the doctor’s office imposes disproportionate costs on chronic patients who need more contact with physicians. This might be one reason why so many are not getting what they most need from primary care physicians and what is most likely to prevent more costly problems later on: prescription drugs.

The ability to consult with doctors by phone or e-mail could be a boon to chronic care. Face-to-face meetings with physicians would be less frequent, especially if patients learned how to monitor their own conditions and manage their own care.

Lack of Electronic Medical Records. The computer is ubiquitous in our society and many believe that electronic medical record (EMR) systems have the capacity to improve quality and greatly reduce medical errors. Yet, only about half of physicians have such systems and most of those are not connected to other physicians’ offices and hospitals, do not allow electronic prescribing, etc. The same is true for hospitals. One study concluded that “information systems in more than 90 percent of U.S. hospitals do not even meet the requirement for a basic electronic-records system.” Why are most medical records still stored on paper? Again, the short answer is this: There is no financial incentive to do otherwise.

EMRs may improve quality, but in the third-party-payer system, doctors do not compete for patients based on quality. EMRs may be a boon for patient convenience — especially in transferring information from doctor to doctor, but physicians don’t get paid for increasing patient convenience.

The Kaiser Exception. There is one health plan that does make extensive use of the telephone, e-mail and electronic medical records (EMRs). The insurer is California-based Kaiser Permanente. Unlike most private insurers, Kaiser doesn’t pay for care the way Medicare pays. Instead, it employs most of its doctors in a health maintenance organization (HMO) model. Because the plan is responsible for all the health care costs of its enrollees, it has an incentive to make use of technology that reduces overall cost. Telephone, e-mail and EMRs are among these. HMOs have their own perverse incentives, however, and some of Kaiser’s less attractive outcomes have been chronicled by Harvard Business School Professor Regina Herzlinger.

Ironically, the tax law favors the HMO form of delivery (because all premiums an employer pays to Kaiser are paid with pre-tax dollars) and has traditionally discriminated against individual self-insurance. However, the HMO doctor is no more free than the fee-for-service doctor. Both are trapped — although in different systems.

Inadequate Advice About Drugs and Other Therapies. Why do doctors so oftenprescribe brand-name drugs and fail to tell patients about generic, therapeutic, and over-the-counter substitutes? Why do they typically not know the price of the drugs they prescribe or the costs of alternatives? Even when they are vaguely aware of cost differences, why does your doctor not know where you can get the best price in your area for the drug she prescribes? Once again, the short answer is: They do not get paid to know these things. Knowing the current best price, knowing where the patient can obtain that price, and knowing the prices and availabilities of all of the alternatives is demanding and time consuming. For the doctor, it is time that is not compensated.

Inadequate Patient Education. Numerous studies have shown that chronic patients can often manage their own care, with lower costs and as good or better health outcomes than with traditional care. Diabetics, for example, can monitor their own glucose levels, alter their medications when needed, and reduce the number of trips to the emergency room (ER). Similarly, asthmatics can monitor their peak airflows, adjust their medications and also reduce ER visits.

To take full advantage of these opportunities, however, patients need training that they rarely receive. ER doctors could save themselves and future doctors the necessity of a lot of future ER work if they took the time to educate the mother of a diabetic or asthmatic child about how to monitor and manage the child’s health care. But time spent on such education is not billable.

Escaping the Trap. What is the common denominator for all of these problems? Unlike other professionals, doctors are not free to repackage and reprice their services in customer pleasing ways. The way their services are packaged is dictated by third-party-payer bureaucracies. The prices they are paid are similarly dictated. Doctors are the least free of any professional we deal with. Yet these un-free actors are directing one-fifth of all consumer spending!

John C. Goodman, PhD, is president and CEO of the National Center for Policy Analysis. He is also the Kellye Wright Fellow in health care. His Health Policy Blog is considered among the top conservative health care blogs where health care problems are discussed by top health policy experts from all sides of the political spectrum.

13 replies »

  1. More good points from Peter1.
    So lets map it out in graph form
    Overhead costs are high
    Blame revenue method
    Profess that you care for customers but revenue method stops
    Customers don’t seem to care for this service when selecting physician
    Now it seems they are not even needed. Nurses can educate

  2. Dispensing medical advice involves diagnosing the patient, diagnosing the patient depends on seeing them. Dispensing legal advice does not depend on seeing the client.

    It’s money foolish to pay a doc to educate patients – that’s what nurses are for.

    If I want a script refilled I just have the pharmacist call/fax/email the doc’s office, works every time for simple refills.

    “Why are most medical records still stored on paper? Again, the short answer is this: There is no financial incentive to do otherwise.”

    Ever tried going to court with an EMR? Want more use of EMRs (at lower cost) then take the proprietary competition out of software and legislate open source Interoperability of systems. But John’s not into “legislation” he’s into letting the private sector solve our problems.

  3. Peter,
    You are edging closer to where I am coming from and that customers are missing in all this communication and my ire is some fake tears are being shed in their name. When end customer is unable to defend his/her best interest for whatever reason, no one else will defend theirs. I see limited customer movements based on sevice quality that matters. If the customers did show mobility and moved based on service quality, doctors would provide these additional freebies considering them cost of business. After all, carpet or receiptionist or decor etc do not have CPT code, yet they are provided for in doctor office.

  4. Fortunately, or unfortunately, providers found a formula that worked. To scale in a FFS world, your metrics are exam rooms, providers, added hours, more access, better contracts, and generally “more” rather than “better” (all add expenses and income).

    Everyone encourages it – heck, Medicare is now paying well over $100 for a 99214 now in most markets – a 40% increase in the last ten years. Most docs within 10 years of retirement will not change – most PCPs are making more now than they ever have (Receivable are clean, third party billing is a piece of cake, and now the PCPs are at the center of the universe).

    Payors have to supply the employers a valid network so many PCPs (good, medium, and some bad) have to contracted.

    Maybe the answer is added patient incentives to pick PCMHs or the like – you would think the patients would vote with their Medical Record Releases away from a sub-par or congested situations, but really I don’t see it here in Tampa.

    Peter McIntire, MHSA

  5. So now we narrowed down to office overhead as root cause of problem. Revenue method is irrelevant because phone advice will bring it’s own issues.

    Also Peter’s post seem to indicate, key issue for phone advice is FFS versus Managed care.

    Now we can latch onto important question of why physician office overhead costs are high and what are they doing to reduce it. Also there is important question of how not providing adequate time to patients is impacting physician revenue.

    If revenue is really not being impacted and office are able to build up large number of active charts regardless of service provided, then it only implies that customers don’t care for it or they are trapped and don’t have choice. As a service provider there ain’t a better scenario. So why bother shed crocodile tears in the name of customers?

  6. If the costs is covered, then what is possible reason for doctor to not to call patients or train a diabetic child’s mother?

    That’s exactly the point…. The costs AREN’T covered. The only thing I do that I actually get paid for is see patients in the office. Everything else–phone calls, reviewing results, filling out forms, processing refills, emails, etc. etc is free unpaid work. If I turn 25% of my office visits into unpaid telephone calls or emails, then how am I supposed to pay the office overhead or make a living? Keep in mind the overhead is already 60-80% in most offices.

    It’s not unreasonable to suggest these communication services ought to be bundled into the payment. Problem is, they are NOT bundled in and they take many hours per day. Doctors just can’t afford to spend that much time not generating any income or they can’t pay the bills. It’s that simple.

  7. Good analogy with other professionals although the client load for these other folks are probably 1/20 that of an established PCP.

    FFS “rewards” the building of a very large patient base, always adding new patients, lots of payor participation, plans, in-house ancillary distractions, more providers, etc. I don’t think 1,500+ active charts for an established PCP is uncommon. Besides the lack of reimbursement for non face-to-face encounters, most time not in the exam room is typically spent on messaging, incoming note / result review, and “fire” extinguishing.

    Of my PCP friends that are dedicated to Medicare Managed Care payors – 300 or so assigned patients provides them a great lifestyle and income. Phone, not really email, is their most important tool here. CPT is more of a distraction and data point here – keep the patient healthy is their prime concern.

    No “silver bullet” to escape this trap.

    Peter McIntire, MHSA

  8. Good points but straw man arguments. Let’s approach this in different way.

    Doctors are there to treat and help improve help health.

    Their billing offices are there to ensure that costs are covered and some profit is made through judicious billing practices.

    I don’t see any docto worrying about diagnosis or CPT code when they see patient.

    If the costs is covered, then what is possible reason for doctor to not to call patients or train a diabetic child’s mother?

    The main reason as I see is that their lifestyle will be impacted and there is nothing to be lost by not helping.

    It’s not that word of mouth about their reputation will get them more patients. Patient volume is either locked by geographical location or influenced more by office decord.

    There is rarely any money to be made by most good deeds but it does get a lot of satisfaction. If doctors start losing money in this proposed service based model, we will again have the call to revert back to good old system.

  9. I am always surprised when some of JG’s writings actually make sense (call it the – very rare – Charles Krauthammer phenomenon). But:

    ER doctors could save themselves and future doctors the necessity of a lot of future ER work if they took the time to educate the mother of a diabetic or asthmatic child about how to monitor and manage the child’s health care. But time spent on such education is not billable.

    That’s only in part right. Docs can bill for time spent in counseling, to some extent. The problem is that ER physicians are, IMHO, rarely the appropriate individuals to provide detailed health education (for a variety of reasons). But involving either a good PCP or disease management (for instance, an ER session from or referral to a midlevel provider or schooled RN) would work and certainly could be done for common conditions.

  10. You make it sound as if all physicians are victims when in fact this is not the case. Having practiced in California during the rise of managed care it has always been apparent to most of us that the Healthcare system never rewarded physicians for” thinking.” Our entire system of reimbursement is predicated on doing procedures. People have never been rewarded for ongoing care. In the “good old days” an internist or family physician made money doing EKG’s, Lab tests, or x-rys in his office. Those days are gone.
    If we are to get serious about health reform we need to get serious about managing chronic disease and put the right team in place to accomplish that.
    Primary care physicians in solo or small offices will never be able to compete or provide the comprehensive support needed unless they are closely aligned with larger organizations. In addition most residents coming out of training value quality of life and appear to be joining large organizations like KP

  11. It seems easy for some to ignore the fact that most of the other professionals mentioned in the article don’t get paid directly for their use of communication devices and technology either. The incentive comes in a form that is increasingly off limits to physicians – their customers are able to reward or punish them according to the effectiveness of the overall service or experience provided. There are attempts to do this in an artificial and ultimately ineffective way (press ganey) but the most effective way, the way the rest of the professional world works, is off limits. I routinely get shouted down here for suggesting that the patients are actually bright enough to manage much of their own care and the finances that pay for it. It’s not physicians who are in denial here.

  12. Oops. Forgot to change my satirical screen name (which nonetheless linked to me, but to one of my joke images).

  13. “To take full advantage of these opportunities, however, patients need training that they rarely receive. ER doctors could save themselves and future doctors the necessity of a lot of future ER work if they took the time to educate the mother of a diabetic or asthmatic child about how to monitor and manage the child’s health care. But time spent on such education is not billable.”

    Agree. See “Medicine in Denial”

    “The course of a chronic disease depends on numerous variables, none of which the practitioner personally experiences, most of which the practitioner does not control and some of which the practitioner is not aware. In diabetes, for example, blood glucose levels depend on not only insulin levels but also diet, exercise, emotion, medications, infections and co-existing medical problems, among other variables. The patient has more knowledge and control of some of these variables than the provider ever will. Managing chronic conditions demands keeping track of these variables over time and examining them for medically significant patterns and relationships. The provider’s expertise is limited to textbook generalizations and limited personal experience with other patients, neither of which is sufficient to cope with detailed data and arrive at individualized decisions for the patient at hand. Those decisions require expertise that resides only in that patient, feedback that only the patient can recognize and act on, and external tools that the patient has more time and personal incentive to carefully use than most providers. The patient feels the effects of the disease and its treatments, and quickly sees correlations between those subjective symptoms and detailed data on physiological parameters. Without any formal education, the patient is in the best position to observe these correlations. To that extent, information asymmetry exists in favor of the patient, not the expert provider. What the patient needs is not the broad, sophisticated scientific understanding of a physician but rather a basic understanding of principles and data that bear specifically on choosing among individually relevant options. And it is not unusual to see patients who develop more than this basic understanding. For example, diabetics of long-standing whose disease is well-controlled are frequently more knowledgeable about the disease and their personal version of it than their physicians.

    Most of all, the patient is the one who must summon the resolve to make the behavior changes that so often are involved in coping with chronic disease. If the patient does not feel responsible for deciding what has to be done and is not heavily involved in developing the informational basis of that decision, then very often the result is “noncompliance” with doctors’ decisions. Noncompliance may or may not be appropriate, depending on the situation. The point is that if patients are equipped to become decision makers, the problem of noncompliance with their doctors’ decisions is transformed into a problem of personal commitment to their own decisions. Patients will be more committed to their own, informed decisions than to decisions made for them by experts… [pp 244-245]

    Nonetheless, your inference that health care is just like any other “consumer spending” is dubious.

    Not that I disagree that physicians are trapped in an bad economic system.