by Marie Cooper
I have been in senior executive management in both managed care and a major hospital system. I find the hysteria over “reform” bitterly amusing because it is so misdirected.
The real problem with health care in America? Greed, indifference and incompetence, pure and simple. But not in the places everyone is pointing.
Insurer side
Insurance companies have to maximize their revenue because they answer to their boards. They are in no rush to fix claims systems that make copious errors and delay payments to providers. There are hundreds of claims processing software programs out there. Some are acceptable, some are useless. None are really good or efficient. And there is the human error factor. A careless mistake by an apathetic claims processor can create payment problems that could literally last for years.
These generate hundreds of provider appeals, totally clog the appeals and grievances systems and breed enduring ill will on the part of providers who are trying to make a living. There are just too many potential variables in every claim. The person who can develop a foolproof universal claims processing system, that is the person who will be America’s health care unsung hero. It hasn’t happened yet.
Managed care companies control costs primarily by paying for care obtained with a contracted provider. This makes sense and it is not bad business. But for the people who pay extra to have out of network coverage, their providers get short changed by a bizarre and secretive system based on usual and customary payments for the same service in different geographic area.
I defy a mere mortal to find out how those figures are determined. I couldn’t even get a straight answer when I worked in managed care. Using an obscure and dubious collection of data, figures are produced, are further subdivided into percentiles and then grouped according to something called a relative value system.
Bottom line? The payment for out of network services is a total crap shoot. You might get a little. You might get a little more than a little. You will never get a lot.
Provider side
Then we have the provider side. Where you have doctors admitting elderly patients because “the family needs a break.” Compassionate, but a big fat goose egg for the hospital. Medicare does not pay for patients who are not sick.
You have registration staff that, despite training, retraining, constant reminders and disciplinary action, does not verify a procedure has received pre-certification when they register an insured patient. Say it was just three MRIs a week – a conservative estimate. At an average of $2,000 each, you are looking at a deficit of over a quarter of a million dollars in a year.
Or they will register a patient under the wrong name. Or with the wrong insurance. Registration is the front line in getting paid. But the errors are rife, partly because of indifference. But also because there are simply too many plans and rules for one individual to keep track of. Especially when they are not particularly engaged in the first place.
There are doctors doing cardiac catheterizations on patients who blatantly do not meet Medicare criteria for payment. The Medicare criteria are there for a good reason. Anyone who doesn’t meet them should not have a catheter snaked into their heart. There are other, safer interventions to try first. If the patient didn’t meet the criteria, the procedure wasn’t paid for. More millions in lost revenue.
Then there is charity care. The standards are relatively straightforward for the patient. For patients who are seriously ill and truly in dire financial straits, this is a good thing. Oh, and I guess the ones scamming the system think it is a good thing too, because it is almost impossible to prove if they are lying and facilities do not have the resources to investigate. But charity care is never positive fiscally for most hospitals, which are reimbursed a pittance of what they actually put out.
ERs are bleeding money due to patients who come in, are treated and leave before they are even registered completely. That is a total loss for the facility. So is the person who gives false information. The foreign visitor who will never be back. The family of five who come in together for five different things: a cough, a rash, a sore finger, a stomachache and a headache. All things that are better treated in physician’s office.
But these people don’t have insurance, so no doctor will see them. They will never pay the hospital bill, which will average $500 a piece. And EMTALA laws demand that they be seen and treated.
Until insurers and providers start working together instead of as adversaries, there will be no solution to any these issues – the real but invisible problems that are driving health care costs.
Marie Cooper is a freelance writer and management consultant at Achievement Strategies.
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{ 10 comments }
So this was a compelling argument for universal insurance (so the family can get seen and the ER can get paid) , single payer (so there will be a single set of rules without the socially-destructive profit motive of insurance companies), and nation-wide standards of care. I could not agree more with the author’s implicit recommendations.
very interesting insights.
So, the questions are
“What are some possibilities to get them to work together?”
“Is it possible to get them to work together without onerous regulation and stiff penalties (ie, not by forcing them via government)?”
I have to admit, I am not even sure myself that I believe a universal system (NOT socialized medicine before the hysterics start) is the answer. It might be. I am not sure I know exactly what the answers are.
I do know that the problems boil down to a tolerance of mediocrity, the same pervasive issue that affects so much of any service industry.
I also know that name calling, partisan attacks and an unwillingness to think in new ways are never going to get us anywhere.
So accurate registration is a key issue in hospitals getting paid, yet it’s done in a slipshod way?
Why would hospitals leave that money on the table. Makes sense only if 1) Ms. Cooper is incorrect about it, or 2) hospitals are rolling in so much dough that they don’t care about this innefficiency.
-Steve
Dr. Parker, it doesn’t make sense to leave that revenue on the table, that is my point. It makes no sense, yet it is happening just the same. And you put it very succinctly. Accurate registration is THE key for getting paid. However it is frequently done incorrectly.
But hospitals are not rolling in dough. They are impoverished here in New Jersey, where my professional experience has been. Between the reduction in Medicare reimbursement and state aid and financial carelessness, 21 hospitals have closed in New Jersey since 1997.
I wish I was incorrect, but what I describe has been my experience.
Perhaps employing individuals with professional training, demeanor and the commensurate salaries would turn out to be the more economical approach. My dealings with billing personnel has revealed a poorly educated, poorly trained (and no doubt low-paid) set of individuals. The insurance companies have hired clever, professionally educated people (and paid them for it), it seems only appropriate for the opposing side to do the same. Ever hear of the phrase “penny-wise and pound-foolish?” I think that applies here.
Leave it up to an insurance person to blame “providers” for the problems health care has… like saying, “yeah, we admit we are greedy, indifferent and incompetent, but hey, so are providers ’cause they don’t know how to register people at the hospital and they like to order procedures for giggles…
To suggest that providers fall under that same umbrella (because they can’t register people properly) is simply absurd.
I wish it would be as simple as training admin staff to register people properly.
I’ll be happy to sit down with the insurance company and sort out our differences. But the only ones that have absolutely no interest to sit down with providers is the insurance company. The article was clear that there is absolutely no motivation to fix anything on the insurance side. The provider side, on the other hand, is eager to sit down and try to find a common ground.
So don’t imply that health care providers don’t want to sit down at the table and sort out issues like, why has reimbursement for doctors have consistently gone down in the last decade.
I’d be happy to hear the answer and try to find a solution for it. But why would an insurance carrier want to discuss that issue.
rew, you are correct, you do get what you pay for. Front line staff in every service industry are notoriously underpaid. I have also found that by and large the insurance industry trains their staff more thoroughly, but they don’t necessarily compensate them better.
Brandon, you make some good points.
But first I have to make clear, I am not an insurance person. And I am not a provider person. At this point in my career, I am simply my own person.
You are right that this is a very simplified view and how great would it be if solving all our problems was as easy as having a good, well-trained staff? I am not ‘blaming’ providers for anything. The reason I brought up the provider side is because registration errors and unnecessary procedures drive up health care costs. The prohibitively expensive cost of care is a major issue in the current debate.
You also make an excellent point in observing insurance companies have little to no incentive to sit down with providers. I would say on the surface that is true. But insurance companies without providers are soon also going to have no members, so it does behoove them to cultivate positive and mutually profitable relationships.
I’m not implying health care providers don’t want to sort things out. It would not be fair to make a blanket statement like that. Unfortunately, there is so much animosity, on both sides, that I do not know how a détente is going to be achieved. Insurance carriers should want to discuss these issues because good business is about good relationships. If they were more responsive to providers, a lot of their Provider Relations headaches would go away.
My experience supports most of Marie’s observations. I disagree with her statement “but for the people who pay extra to have out of network coverage, their providers get short changed by a bizarre and secretive system based on usual and customary payments for the same service in different geographic area.”
That is not how it works in my neighborhood at all. When a patient goes out of network, the patient pays the doctor’s fee. It is the patient who is short changed by their own insurer with their fake usual and customary designations. They are cheating their own customers.
I too have seen hospitals leave money on the table by hiring ill trained people to deal with the payor critical functions. It is not rational but hospitals are run by human beings. A large part of what keeps the dysfunction going is the reaction noted above in which the “providers” lash out with blame that is accurate as far as it goes but never get around to looking at their own dysfunction and cleaning up their business procedures.
But when we do clean them up, we are still left with an insurance industry that makes money by collecting premiums, not paying out claims, and which is paradoxically happy to cheat and frustrate it’s real customers as soon as they get sick and shift from being only premium payers to being also claim makers. It is a case of customer service being bad business since if they go away at that point, they insurer is more profitable.
Which is exactly why these bills that require everyone be their customer is horrible. People should be free to walk away from the abuse and take their own chances if they want. Insurance is gambling and most players lose.
A friend of mine who was an ER doc at a small hospital had to fight hard with the hospital administration to send their coding person to (gasp) a coding workshop!! Oh my gosh, what on earth might a coding clerk actually learn at an expensive coding workshop? She learned enough to pay back the cost of the workshop in just one week of better coding.
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