by Susan Giurleo, PhD
If you are a physician, therapist or any other helping professional whose business model relies on third party manged care reimbursement you are engaged in the world’s worst business model.
Let me start with a story to set the stage.
Imagine you are a bright, idealistic college student. You’re good at academics, want to make a difference in the world and have hundreds of career options in front of you.
After lots of thought and planning you invest $100,000 in a graduate education. After all is said and done, you are in school anywhere between 2-12 years past your college graduation. You train to change people’s lives, heal what pains them. You make a difference and you sacrifice your life goals to prioritize your career. You may delay getting married, having children, taking vacations.
You do good work, finish school and training proving yourself and set out to make a living practicing in your area of expertise.
The first order of business is to figure out how you will get paid for all of your good work. The standard business model is accepting payment from a third party.
This third party decides how much your work is worth.
The third party sets limits on how much work you can do with each customer.
The third party can reject your invoices at any time for any reason.
The third party prohibits you from discussing your fees with other providers of the same service.
There are many of these third party payers and they all pay different, seemingly arbitrary rates.
The third party can change what they pay you at any time.
If you don’t follow all of the rules of the third party they don’t have to pay you at all.
The business model requires you to rely on an outside source to determine what you work is worth, set your rates and reimburse you on their terms. They can change the rules at any time. Outside forces constantly and consistently determine your bottom line. You have no choice, no chance to test price points. If you want to add a new service that isn’t recognized by the third party, they don’t pay you. The third party tells your customers that you are responsible for accessing their funding on their behalf, so no one knows what they really pay you or what your services are worth.
If you have any entrepreneurial spirit at all, please re-read the above paragraphs and tell me if you would sign up for this business model. Honestly, it’s ridiculous, don’t you think? Who in their right mind would invest $100,000 and years of their life in education, training and business and then turn over all hope of a profit to an outside entity?
Why don’t health care providers do anything about the model?
Doctors, therapists and other health care providers are not business people. We are not trained to pay any attention to how we get paid or who pays us. Many of us work in organizations that take care of all the administrative silliness so are have no idea how broken the system is. We are trained to do work that “insurance will pay for,” or to “find something that the insurance will reimburse.”
Nice, huh? Your doctors are trying to find things wrong with you so they can get paid. It’s not their fault. It’s the business model and no one questions it.
Those who understand that business model, CEOs of insurance companies think it is a great business model. They call the shots, they are in charge, they have the power and they make lots of money managing your business and our health care. Those in power never want to give it up.
As providers we are also brainwashed that if we don’t accept this crazy business model our patients will be harmed. “How will they afford care? Who will take care of them?” But, in the USA, we don’t want to provide a public health plan to help out those who are less able to afford care, so providers are put in a bind: take the lousy capitalist model that puts you in a subservient position to third party payers, or be a guilt ridden, selfish person for not buying into the model and getting the respect and pay you deserve.
What can we do about it?
Create different business models. Take ownership of our careers. Declare, “We’re not going to take it anymore!”
Imagine what would happen if doctors, therapists, dentists, and all other helping professionals declared this at once? What if we only worked with third party payers who treated us with respect? What if we only accepted insurance that had a real person answer our calls and handle our questions? What if we dropped insurers who pay us insulting rates and make us fill out 5 pages of busy work to access that cash?
And what if we informed patients that it is their insurance company that restricts their care, pays low rates, makes us wait on hold for hours? Or how about we put the onus on the patient to submit all insurance claims, understand how complex and time consuming it all is? It’s their care after all. [And don't tell me the public 'can't figure it out.' They figure out auto insurance, life insurance, home insurance. They can figure it out. Now we just enable ignorance].
Do you think the public would speak up? Complain to their insurance company, employers, government officials, congresspeople and senators? Well, yeah, they would. Would health care policy need to change if the providers of care stood up and demanded respect, a fair system and lower overhead costs?
Let’s not agree to business models imposed upon us. Let’s educate ourselves about business and empower both the medical profession and consumers to be proactive in how health care is accessed and paid for. If we are told that health care is a business, and entrepreneurs run the system, let’s even the playing field so that the competition is fair.
We have a choice.
Susan Giurleo is a psychologist who blogs at the BizSaavy Therapist.
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The idea of an “access fee” is worth considering. As is the idea that people can have different price points depending on the type of practitioner they see. Many businesses use registration fees –when I register my son for camp, I have to pay a $30 registration fee, in addition to the tuition.
Whether we like it or not, reform or not, patients are going to have to pay more for their health care. The days of $15 co-pay for all the care you need are over. It’s not sustainable. And, in retrospect, it’s a ridiculous expectation. In NO other industry does anyone expect to pay $15 for access to a valuable service. You car insurance doesn’t offer you $15 oil changes and tire rotations.
My thinking is that all health care professionals will need to take the cards we are dealt in terms of reimbursement and develop sustainable business plans. This might mean developing our own concierge-type groups that have a hybrid of reasonable yearly fee, accepting some insurance reimbursement and self-pay options. This will require transparent fees and payment options. Also important will be additional services such as nutrition classes, weight loss programs, diabetes management, parenting courses, mental health support, and support networks, etc. Maybe access to these classes is dependent on the yearly registration fee. The model will be very different–combination of preventative care and treatment for current conditions.
Patients will need to become informed consumers. There will be more options. But people do this type of leg work for all other services they access in the US, so I’m assuming they can adapt.
Change doesn’t mean “worse.” We need to be open minded to the possibilities and develop creative ways to benefit patients and make a decent living.
Cynthia, If you think everyone in the US has access to “equal” care that may be where your frustration comes from. Those who can afford great insurance get better care than those that don’t. And this isn’t going to chagne with the new “reforms.” These reforms give people access, but no guarantees they won’t have huge deductibles or limits on certain types of care. *That has nothing to do with your doctors’ desire to provide excellent care*.
The public needs to divorce their thinking that doctors limit access. They don’t. Your insurance makes those decisions on your AND your doctors’ behalf.
New business models might even the odds of people being healthier overall.
Cynthia,
I, of course, cannot agree with you at all. Is there something more moral about continuing to practice in a situation where you are likely to bankrupt your practice? Where you cannot provide good service because you must see 30-50 patients per days just to break even? Physicians have no obligation to loose their lives or their lively hood in order to ’serve’ their patients. I neither demand sacrifices nor expect them from others. I trade with people – service for money – which is the most moral system around.
Your sister can accept the money with a clear conscience. She is going above and beyond the commonplace, and people appreciate it and try to help her financially in their appreciation. Should we stop tipping the hairdresser, the waiter, or the bartender? Aren’t they ‘just doing their jobs’ too?
We could discuss this more, but suffice it to say that we have differing views of morality. I advocate the trader principle (value for value, a la Ayn Rand) as the normal method of dealing with people. There are emergencies and unusual circumstances in which this may not hold up – but as the routine, daily method – I prefer voluntary associations and trade with others. This is capitalism and leads to tremendous prosperity. The altruistic ethics states that someone else’s need is a moral claim on your work or productivity. When that ethics is enshrined in law, the result is communism and socialism – essentially that your purpose is to serve the state and others and you have no right to your own life. Choose wisely!
David Allen-value for value, a la Ayn Rand
It’s interesting how individualist we have all become. I certainly hope you were not educated in a public school. The David Allen I found on the internet went to a public medical school.
I should really quit being an socialist altruistic educator and go for the big bucks. Those freeloading students that take taxpayer money for my services. Certainly everyone would have more prosperity if students were responsible for the cost of their entire education.
I also find it ironic how many MD’s are offended because I can’t possibly get quality care from a nurse practitioner but then think it’s ok I forgo care because of cost. You all should be applauding me for making a market decision a la Ayn Rand.
I don’t understand, if you truly believe that capitalism leads to prosperity, how you can continue to take Medicare. Why have you fail to live your values and criticize everyone else? Clearly your goal is to make money at all costs and it is more lucrative to you to stay in your group practice then go the capitalistic route.
H. (I like the name). Nope, didn’t go to public school. But I would have had no moral qualms about doing so.
I don’t support tax-payer funded education – but that doesn’t mean it is wrong to work in a public school or to be a student in one.
I’m not offended in the least that you like getting care from an NP. More power to you! Every physician is not in lock-step with every other physician.
Interesting that you think I should drop Medicare to be consistent with my ethics. I think it is the same mistaken view that says I should in no way take from or be involved with any public institute. I will say that the decision to be involved with Medicare is complicated, but involves remuneration amounts, hassle-factor in dealing with that particular ‘insurance’ company, as well as risk (since jail time is a possibility in dealing with this particular entity). If it doesn’t make sense for my practice, I may in fact have to drop it. I am currently making changes to my practice (getting out of the group) so don’t assume too much in your analysis!
“but that doesn’t mean it is wrong to work in a public school or to be a student in one.”
But ultimately, by choosing to work in public education, I will never have enough money to pay for medical care out of my own pocket. I must rely on insurance and the call made be the author of this article is for providers to accept cash only. So where does that leave me? I surely can’t afford medical fees for anything more than a hang nail. Please just stop the rhetoric on how cash only makes my health care cheaper and better. Cash only will price me out the market.
“Interesting that you think I should drop Medicare to be consistent with my ethics.”
Yeah, I do. To say that you don’t believe in these things, advocate for their demise and then profit from them is hypocritical.
Mr. or Mrs. H, you are certainly entitled to your choice of choosing a physician who takes cash only, one who accepts insurance, or one who would accept a bushel of tomatoes for payment. You get to judge which of them is offering better care for a better price. The burden is on the concierge doctor to wow you so much with the amazing service and to get his prices down to a very competitive level so that the patient voluntarily pays a little extra for that 5 star service. Alternatively, some doctors can choose to have a clock-in-clock-out Collect-my-government-check-vacation-and-pension package mentality and cut a deal to be part of some public option and be guaranteed a steady stream of patients without having to be so much of a customer-service fanatic. To each his own.
Would it also be fair that you give parents a choice as to whether they want to support your school system, a different school or to not participate at all?
There’s nothing wrong with having public options as long as they are true OPTIONS and not coercive. One criticism of the public education system is that it gives people no choice to go with another system that might give them what they want (ie higher literacy rates, better vocational training, more convenient hours for parents, a curriculum more in sync with the beliefs of the family, nicer drinking fountains, whatever it is that the students and parents value) as opposed to being FORCED to pay into this one-size-fits-all system.
Social goals can best be achieved by voluntary cooperation rather than by force and coercion. I respect your right to choose to go into government-run education as you have. Can you perhaps respect our rights to choose the education that we want for our kids?
I would pledge to render the best medical care I can for you, but if you don’t like it, you have the choice to go with other private or public options.
“Would it also be fair that you give parents a choice as to whether they want to support your school system, a different school or to not participate at all?”
I am not involved in K-12. I work with nursing students who have a choice be there or not. It’s a public institution and tuition is subsidized by the state and federal government. Without public funding, many of our students would be unable to continue their education.
Fair enough. Would it also be fair to suggest that with the booming economy resulting from tax relief to the economy that a lot of people who rely on being government-dependent would be able to be happily self-sufficient AND that a lot more voluntary charity would be given? (Especially when you strip away the horribly inefficient burdensome layer of bureaucracy that no doubt exists)
Dealing with 5 chronic conditions isn’t a catastrophe? Do you have any idea how much money it cost to diagnose them? If I had catastrophic insurance those years instead of the more comprehensive plan, I would have not sought medical care.
I don’t berudge you your opportunity to make a profit from your talents. Just don’t pretend that I can afford what you want me to pay. At least be honest and say that some people will have to do without health care.
H,
I think five chronic conditions (assuming you had the insurance before you got most of them) would qualify. Catastrophe might better be viewed as a number than an admission to the hospital. Let’s suppose you have a 10,000 deductible for that catastrophic insurance. Then that would come out of your pocket, and anything beyond would be covered by the insurance company.
I do think that if everyone were out there, shopping around, using their own money – that the cost of medical care would come down substantially. In addition, doctors would have to tell you that, in most cases, Plavix isn’t really all that much better than aspirin (unless you have cardiac stents placed) or that having a second MRI this year to make sure the MS hasn’t progressed may not be worth the $800 that will be charged for it. As it is, with the malpractice climate – and the lack of attention to cost on the part of the doctor and patient – people spend money very easily and do their part to increase the price of things.
I’m not saying any of this would occur overnight. Perhaps that is what you are focusing on – what will happen to you tomorrow or this year. I’m speaking about changes which, if slowly implemented, would gradually transform a marketplace for the better.
” Let’s suppose you have a 10,000 deductible for that catastrophic insurance. Then that would come out of your pocket, and anything beyond would be covered by the insurance company.”
So I make $21,000 a year and I have a $10,000 deductible. Five of the last seven years I easily surpassed $10,000 in medical fees. So during those 5 years, I am supposed to live off $11,000? Since I pay 20% of the cost of my medical care, I am very aware of how much things costs and whether they are necessary.
“Perhaps that is what you are focusing on – what will happen to you tomorrow or this year. ”
Thinking back to the situation I was in, where one of my chronic conditions took 3 years to diagnose, when the 20% was hard to deal with financially…
Of course, having a $10,000 deductible and being hospitalized for a week around New Years makes that a $20,000 episode.
Anyway, since it is in your best interest to perform a lot of procedures and you clearly are motivated by profit, how do I know the medical advice get from you is in my best interest. Clearly, one who feels we should all pursue our selfish goals would have no problem recommending unnecessary treatment. Maybe that $150 mammogram is unnecessary but my guess is if you made a profit from it, you would have no qualms using fear to get me to agree.
H-
You don’t know that the medical advice you get from me is in your best interests, except that, on the whole, giving good advice is what makes or breaks the reputation of physicians. Physicians usually only make money from tests that are performed in their own offices. So you might be leery of physicians who seem to utilize testing in their own offices to a degree beyond the norm.
You also write: “Clearly, one who feels we should all pursue our selfish goals would have no problem recommending unnecessary treatment”
That would be a non sequitur. I believe in rational selfishness. I do not believe that dishonestly is in my long term best interests. People who are rationally selfish (which is actually the majority of Americans, although they don’t realize it) believe that character and long-term goals are important. You might wish to look more into Ayn Rand’s novels and ideas to see that there are some very logical, insightful, and practical ideas regarding what it means to be moral.
H,
I don’t know what other physicians have in mind, but real reform would involve disentanglement from the entire third party payer system for non-catastrophic care. It is because so many people have insurance and Medicare that they use for routine care that you get priced out of the market. I don’t want you to be priced out of the market. I wish you were allowed (by states, for the most part) to buy catastrophic care only and save all that money you give to the insurance company so you can instead shop around and pay for what you want. That is part of the idea behind Health Savings Accounts – although they don’t really allow for catastrophic only plans (which would may them much cheaper).
If you are interested, I can direct you to multiple physicians who have up-front, low-cost pricing. There is even an insurance-free ER which posts its (rather cheap) prices right on their wall!
Regarding my supposedly hypocritical stanze, I’ll go you one better. If I were 65 years or older, I would probably sign up for Medicare! The government has effectively destroyed the private market in this segment of the population. Since I paid into the system (much more than the average person of my age, by the way) I certainly would not forgo the benefits! There actually wouldn’t be many options for me – and they are getting worse as the days go by.
I declare my right to make a profit, to keep what I’ve earned, to be proud of my labor. There can be good people in bad systems – so I don’t begrudge you your salary nor do I feel badly that my talents can provide me with a reasonable living.
“The burden is on the concierge doctor to wow you so much with the amazing service and to get his prices down to a very competitive level so that the patient voluntarily pays a little extra for that 5 star service.”
I would rather continue to see my nurse practitioner and take that little extra cash and donate it to our local food bank.
In some cases, so would I! Wouldn’t life be grand and the world a better place if you and I had the freedom of choice to do that in all scenarios and not just with concierge doctors!
“Wouldn’t life be grand and the world a better place if you and I had the freedom of choice to do that in all scenarios and not just with concierge doctors!”
I have the choice of a large corporate medical center clinic, a small corporate medical clinic, a group of three independently practicing physicians taking insurance, two solo physicians taking insurance, a cash only fee for service physician, physician that has a membership fee, a nurse practitioner, and various alternate health providers ie naturpathic physicians, chiropractors, chinese medicine. We have plenty of people who can’t afford care. Wouldn’t it be great if those cash only doctors really reduced their prices instead of charging more than insurance companies.
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