California doctors are going to lose a lot of money.
Emergency physician Shadowfax analyzes the recent California decision that bans balance billing. Calling it “a disaster in the making,” he writes that removing the option to directly bills patients removes the leverage physicians have when negotiating with insurance companies. Namely, the option to stop accepting insurance.
Without this option, doctors “have to accept whatever pittance the insurer pays as full payment. But the doctors can no longer negotiate with insurers either, since they no longer have any credible leverage to demand reasonable payment for their services, so they wind up having to accept whatever pittance the insurer offers.”
He starkly points out, “You might as well just go to single payer,” which will surely delight many policy makers in California.
I have written previously that the most powerful card doctors have is the ability to opt out of insurance. No doubt, there are those who would like to remove that option and effectively force physicians to acquiesce to the whims of the government and health insurers.
That’s the reason why physicians need to do all they can to protect that choice.
{ 16 comments… read them below or add one }
If this comes to my area, I’m outta here.
If this is enacted everywhere, a significant number of docs will switch to the non-medical careers we’ve already been contemplating. The older docs will simply retire that much sooner.
what will the docs with 250k in loans do?
It’s always about money. Perhaps if a doctor has not contracted with my insurance company, they should let me die when come to the ER. That way, all the doctors won’t feel that patients are ripping them off. My health is a commodity to be bought and sold.
This + EMTALA = complete loss on pricing for ER docs.
At the end of the day, the only way to protect autonomy is to build an alternate system based on free-market pricing. Take a look at what we’ve created at http://www.HealthShoppr.com, which gets rid of fee schedules and allows people to set their own prices for whatever services they offer (pilot is in massage therapy).
Going back to a model where doctors and other health professionals offer differentiated services that people want to pay for (vs. 8 minute visits with the doc not looking up) is an alternative to commodity care.
will the hospitals support the er docs ala the hospitalists?
Dr Goel:
The problem with “free market” pricing is that it just does not work with many types of medical conditions.
What happens if a patient without insurance walks into an er with appendicitis? Does the surgeon negotiate a price with that patient before he has surgery?
How about the patient without insurance who comes in for rectal bleeding, going on for 6 months, and needs to be evaluated for colon cancer (which he/she probably has, recently happened in my office and she wound up on medicaid)?
How about the uninsured hypertensive diabetic with at least 300 per month in medication costs? Where is the free market there to bring prescription costs down?
With examples like this, any free market comparisons fall apart. The fact is that health care is not something people choose to have but something they need. That is why patients are unwilling to pay for it, ironically, as opposed to vet bills, for example, because they feel it is essential, like a town providing water and sewage.
A family practitioner
FP:
I agree with the utility service analogy. But it goes a step further. Unlike the electric bill, which if unpaid will result in the power being turned off, there is outrage if a patient behaves the same way and gets cut off from the hospital and their doctors. So the electric company is accorded considerably more respect, and is never expected to operate at a loss, either.
I find it interesting that doctors are basically supposed to work with free-market pricing although of course we don’t have free-market pricing since the insurance companies control the pricing, however I noticed in the paper the other day that Texas has mandated that everybody has uninsured motorist coverage so that the general population is not required to cover other people in the case of an accident.
Why is driving a car any different?
FP doc,
If hospitals/surgeons were forced to post their prices, patients could make an educated decision about what hospital to go to and what surgeon to request before they were in the throes of an emergency. Don’t put docs on the hook because people don’t plan ahead.
I’ll bet that I could manage 90% of your hypertensive diabetics with drugs on the $4/month list at WalMart. Stop prescribing expensive drugs.
The current system is on a one-way course to bankruptcy. The free market example is only “falling apart” because you want it to. Think outside the box a little.
Whitecoat:
You did not answer my hypothetical question.
What is the surgeon to do with the acute appendicitis in the ER? Negotiate a price before the surgery? Your suggestion that patients research the cheapest hospital, etc, in case they need it, is quite impractical. When a patient thinks they have an emergency they go to the nearest hospital, not the cheapest.
Your point about generics is fine, and I always prescribe generics when appropriate, so you are preaching to the choir.
As far as our current system being a one way course to bankruptcy, I agree completely. I just do not think free market principles apply to almost all medical care (only significant exception: cosmetic procedures).
A family practitioner
I don’t think this would be such a problem if we didn’t already have this entrenched third-party payor system. Covering hospital and ER visits is what health insurance companies are SUPPOSED to do, and probably would do a better job of, it they were not so involved with paying for your medications, determining what outpatient tests you get, negotiating with your doctor about prices, and requiring pre-authorization for your MRI.
It is all of this other crap, which they shouldn’t be involved with (health insurance should be for emergencies, not routine care just like car insurance should be for vehicular accidents, not a new paint job or an oil change) that has screwed up the very thing they should be focusing on.
Medicare and Medicaid should lead the way in slowing phasing out of outpatient care so that the free market, in all its glory, can re-enter the market. Prices would soon come down in this environment. Lack of pricing transparency and lack of attention to the user (the patient) comes from third-party intercession - a position massively entrenched by the government’s approach.
FP,
Researching the cheapest hospital is impractical only because people choose not to do it. We research car prices and the cost of our next flat screen TV for days. Why not hospitals? Simple. There’s no incentive to do so right now.
The “closest hospital” in an emergency is more often than not the hospital closest to your residence, so researching several hospitals nearby (if you are lucky enough to have more than one) would be an effective start.
You seem to imply that the only time people use the emergency department is when they believe they have an “emergency.” Most of the time the patient complaints are not emergencies. Even if they were emergencies, perhaps we need to change the mindset of our culture so that people set aside funds for possible medical emergencies in the future. If not, people will learn that they get what they pay for.
The more you try to enslave physicians into performing flawless medical care gratis to everyone, the less care you’re going to have available … unless you want to keep *your* office open and do hospital rounds on patients 24/7 for all comers - payment or not.
And if the surgeon doesn’t want to operate on the patient with appendicitis, the surgeon makes up some excuse why he can’t operate and the patient has to be transferred to a county hospital where care is subsidized — that’s what it will come to, if we haven’t gotten there already.
Health care may be something everyone “needs” but, unlike the need for “food” or “shelter” no one believes in an entitlement to the best chefs in the world or a room in the Ritz Carlton for free, just to foster egalitarianism.
It is wrong for the State of California to make emergency service providers the captive workers for insurance companies–in effect their slaves. This is an abrogation of liberty that the docs are rightfully enraged about.
But let us look at what brought it about. There is a hospital chain in California that is notorious for taking out of network emergency patients and charging absolutely outrageous prices. Owned/run by a doctor. If you practice in California you know who I am talking about.
It was well noted by our nations founding fathers as well as the philosophers of liberty upon which they based their statecraft, that the foundation of liberty is morality, and that only a moral, virtuous people with generosity of spirit and a sense of fairness and justice can remain free. That if they allow greed or other vices abuse the liberty, then they will lose it.
This is part of what is happening in medicine. Once upon a time, when we were a free self governing proffession, we arbitrated fee disputes among ourselves. Contrary to popular mythology, most medical society intervention in fee issues were to prohibit abusive or excessive fees. The government stopped all such activity, so now greed where greed is found rides unbridled, ultimately resulting in the loss of liberty for all.
Emergency services by their very nature cannot be negotiated at the time of need. Abuse of that fact begs regulation.
What I would personally rather see is a sort of self-regulation: Not allow anyone to charge more than a certain percentage–say 125%–of the fee that they voluntarily accept from the private third party payor that is their largest payor. So if I sign a contract with BCBS and I accept 1000 from them, I can’t charge the “cash” patient more than 1250. It is a limit that I in effect accepted and set. For those who want to charge just whatever the hell number rolls into their head, they need to stay out of emergency services and still to treating patients who can effectively consent.
The solution is for the state legislature to require the HMOs to pay ER docs a reasonable fee for the services they are providing.
Reasonable fee…
- to the doctor?
- to the patient?
- to the HMO?
- to the gov’t?
There’s the fable of the doctor who saves the life of a millionaire who is choking at a restaurant. The millionaire insists on paying the doctor for his service and asks him for a fee. The doctor replies, “I’ll take half of what you would have paid before I got here.”
Anon 7:47,
In real life the millionaire would gladly pay the hundred bucks for the dinner, but would be upset at the doctor’s five buck co-pay.