Show Me the Money?

As I am in the midst of a major job change, I can’t get enough of books about business, setting up a practice, or a variety of podcasts.  My most recent podcast has been a fascinating podcast called The Cost of Care by David Smith, a healthcare economist. 

In the podcast, Mr. Smith provides a variety of examples of how healthcare costs in the United States are substantially out of step with the rest of the world.  Unfortunately, it feels too often the doctor is seen as a villain in the discussions about pricing, but I wonder if people would feel differently if they heard the thoughts of a doctor in the business over twenty years.

Doctors – Far From Innocent

Admittedly, just like any other business, there are doctors who push ethical boundaries in pursuit of profit.  It’d be naïve to say otherwise.  For instance, I have a personal experience with a fellow doctor showed me the Medicare rules and indicated you could use those rules to guide how stress tests were ordered.  That way, he detailed how you could order extra tests and make the practice more money.  Fortunately, I had been taught to practice based on listening to the patient’s symptoms and ordering stress tests based on the symptoms and how they related to guidelines.  It was disheartening to hear firsthand how some doctors are truly being unethical, though thankfully this has been an outlier in my experience.

You Charged Too Much!

Early in my career, I was startled by a patient coming to my clinic with a copy of his bill, which detailed the costs of his recent care.  He was shocked by how much he thought I was paid for him to go through a recent procedure, as his bill implied the amount billed as being income directly paid to me.  As a younger doctor, I knew little about how billing was performed, much less how it was presented to the patient.

Patients are often given a bill associated with a physician, but the patients may not get a clear description of how much goes to the doctor and how much goes to the practice.  For example, with an employer from years ago, I would perform variety of procedures and I was generally paid in the realm 5-10% of what was billed to the patient.  Yes, you read that correctly.  You may have gotten a bill of $2,000 for something I did and it’s a reasonable estimate that I got in the realm of $125 of that $2,000 bill.  Yes, I understand there are a variety of costs involved in providing care including facility expenses, staff expenses, durable and disposable good expenses, to say nothing of staff benefits including health and dental insurance.  So, I’m not implying it is wrong to say that a health system may charge more than what the physician is paid for the procedure.  The important part is to realize that most of what you are billed isn’t going to the doctor and bills should more clearly indicate how much goes to the doctor and how much goes to the practice or system.

So, what can you do when your doctor says you need a test, but you don’t want to pay too much?  Price transparency improved with the Affordable Care Act, though unfortunately the data provided by hospitals can be challenging to read as it may be provided in data formats the average consumer cannot navigate with regular home computer software.  One option is to ask the hospital what their cash cost is for a procedure if your deductibles are high.  Another option is to go to MDSave to investigate local prices in your region, as there may be a far cheaper option.

Secret Shopper

I experienced a different variation of the pricing game where I acted as a secret shopper.  I called my insurance company and asked what the fee was for me to go through a specific test.  My insurance company told me the doctor’s professional fee for that service was nearly $500, even though I knew I only got paid about $100 to perform that exact service.  I was surprised that for this particular test, my compensation was about 3% of what was billed to the patient and even the professional fee that I was supposed to receive wasn’t paid to me.

Doctors Can’t Submit Fraudulent Bills…But Others May Be “Creative”

When most doctors see patients in a clinic or hospital, the doctor triggers the billing process by assigning a complexity value on a scale of 1 to 5 for that visit, with 1 being for the lowest complexity, while a 5 is used for the highest complexity.  The media would have you believe doctors are fraudulently picking a higher number to get themselves more money.  The truth is closer to the idea that we tend to pick low (“under bill”) both because we both don’t want to have to face any potential charges for committing fraud, but also because health systems hire monitors to ensure the system isn’t charged with fraudulent billing and they consume a substantial amount of our time monitoring our work.  The end result is we are more likely to pick a lower number as a means of saving time and not having to talk to the monitors.  Yes, there are ways to game the system, as with any system involving money, but my point is we are pushed often to avoid committing fraud, including required annual training about how to avoid practicing fraudulently, and many people monitor what we do to help guide us.

So, imagine my surprise when a family member told us a simple emergency department visit cost them around $2,500.  The family member is not in medicine, but knew my wife and I are both in medicine, so they asked for help in reviewing the visit.  The person had no fever, no blood pressure or heart rate abnormality, required no blood work, required no intravenous fluid, and no other significant symptoms.  They were given one dose of a generic medicine, a prescription for the remainder of that medicine needed for the condition, and were sent home with no follow-up with their PCP being needed.  So, our family member was shocked to get such a high bill.  When we reviewed the billing, the doctor had considered the visit a level 4 and the emergency department considered the visit a level 5.  Mind you, as a cardiologist, I am very rarely using level 5 in the hospital, as I reserve that for the severely ill patients which require hospitalization.  When we encouraged the family member to challenge the bill and we provided the grounds with which to challenge the bill, they were rebuffed and told the large health system had a scoring method to determine the complexity of care and their score for the visit met the highest tier.  Despite what we would have considered fraudulent billing if we were to have billed that high, the health system felt they were able to act with impunity.

In the End…

While I know there are unethical doctors who strive to make as much money as possible, possibly putting patient’s finances at risk, I believe it is more accurate to presume that the doctor is on the side of the patient.  Your doctor is most likely trying to be your advocate in interactions with the medical industrial complex or corporate medicine complex.  In fact, it is very challenging for a doctor to know the price of the options in front of them, so they can’t pick the most cost-effective option for you (e.g., medicine prices are exceedingly convoluted).

The desire to focus on the direct and personalized interactions with patients is driving my desire to focus on direct care and move away from participating in the medical industrial complex.  We should learn from the works of ProPublica author Marshall Allen, who has worked extensively on investigating harm by corporate medicine as detailed in his book Never Pay the First Bill.