How American physicians should be paid

How do you think American physicians should be paid?

I think many of the current methods are insane. Case in point:

In the 1980s, during a meeting of the board of trustees of the American Medical Association, I experienced sudden unexpected unilateral loss of hearing. You might say that was lucky. But I was scared and went right to my ENT’s office.

He looked in my ear and extracted a large wad of wax, instantly restoring my hearing. I was happy.

But that began an odyssey of visits to ERs and otolaryngologist offices in many states to periodically get my auditory canals cleaned out, a situation that exacerbated when I began to wear hearing aids.

Most Otos told me not to put anything into my ears; some said to come back monthly for an ear canal cleaning. After some years, my nonphysician audiologist told me that her grandmother found that by running shower water forcefully into both ears she was able to keep her ears clean.

So, I tried that and it helped. Later one Oto said that was okay, and that I could dry them out afterwards with rubbing alcohol, followed by a canal lubricant.

Later another Oto told me to drip mineral oil into both ears at bedtime once a week, use a cotton plug and that would lyse the wax.

By using all these methods, I have cut my visits to an ENT office to about once every six months.

Good thing. After my last visit, I received a statement from Blue Cross Blue Shield that handles my primary Medicare.

Amount billed for a medical visit and diagnostic medical exam $537.00; what?; not covered $423.71; covered $113.29; deductions $22.65; total approved $90.64; total approved after Medicare payment $00.00; amount I may owe $22.65.

What a bunch of gobbledygook.

The competent and caring otolaryngologist spent about seven minutes with me, cleaning my ears. $537.00?

Can we blame the mess on the AMA’s increasingly infamous RUC? What if I were a poor bloke with neither Medicare nor other insurance? Oooooo.

So, two questions.

Tell me and our readers in the comments section below (or by e-mail to me at how you keep your and your patients’ ear wax under control; and tell me how do you think physicians should be paid? Have at it.

George Lundberg is a MedPage Today Editor-at-Large and former editor of the Journal of the American Medical Association.

Originally published in MedPage Today. Visit for more health policy news.

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  • Brian Broker, MD

    Non-physicians can be excused for not understanding the physician payment system. Dr. Lundberg cannot.

    How irresponsible of you, sir, to misrepresent the complex physician payment system. Yes it is overly complicated. No it is not the doing of the Americam Medicial Association, it is the fault of insurance companies and paid-for politicians. And worse, to insinuate that if patients do not have insurace they are charged astinomical rates at the choice of doctors is absolutely false, cruel, and a lie.

    Here’s how it REALLY works; Insurance companies want not only a cheap deal, but have lobbied congress to pass laws that prevent doctors from giving the same cheap deal to patients without insurance. They call it “insurance fraud” and have actually prosecuted doctors for doing so. Then, insurance companies and medicare have created a coding system where the doctor has to represent every service he performs for a patient with a code. Medicare and the insurance companies then decide what they will pay for each code (which has been going down every year for a decade, forget keeping up with inflation). The AMA gets to have some input into the formula the government uses to pay for each code, but not the final say. The government gets the final say for medicare and the private insurance companies, well, their game is to get a monopoly in a given area so the doctors can’t negotiate, and then force them to take pay cuts every year.

    So, if you think you’re paying too much for health care, I would suggest; 1) look at the insurance company profits every year (especially the CEO’s salary!), 2) ask why its illegal for your doctor to give you a break on your bill and 3) call your congressmen and senators and complain, alot!!

    Brian Broker, MD
    Phoenixville, PA

    • IVF-MD

      Dr. Broker,

      You are not afraid to tell the truth. Many people who didn’t know before the information you just shared should be grateful to you. I already knew, but thank you anyway.

      • ninguem

        I’m not surprised at all. An experienced physician is scared by a cerumen impaction? The first time I had one, my first thought was….the sudden hearing loss feels just like an earplug, it’s an earwax plug, so go to the pharmacy and get one of those irrigation kits. Then again, that was before I entered medical school.

        Now I know, I should have run, not even to a primary care physician, but straight to a surgical subspecialist.

        Now in medical school and primary care, I sent my first patient to an otolaryngologist for a cerumen impaction. It was the first one I couldn’t disimpact in 25 years.

        Cerumen removal is, seventy bucks payment from the better insurance. Must be an academic practice that can find ways to pad bills for the same service done in the community for 25-cents on the dollar. Add whatever the E+M service is applicable. My patients often give me a “by the way” over blood pressure etc.

        For the nonphysicians out there, and for Dr. Lundberg, who should know better, let me suggest this exercise.

        Google “CPT 69210″.

        CPT = “Current Procedural Terminology”

        69210 = “Removal of impacted cerumen”

        See the hits. Look at the different and conflicting advice over when it is allowed to bill that code for cerumen removal. Read the different and conflicting advice over what constitutes “impacted cerumen” for the purpose of billing. The patient comes in with hearing loss or ear complaints, the doctor examines the patient determines it’s impacted cerumen, and removes it. Patient feels better, hears better. Read the advice saying you remove it one way, you can bill for the service. Remove the cerumen another way, you can’t. For this insurance, but not for that insurance. Read about the documentation that’s felt to be needed in order to justify the billing and not be accused of fraud.

    • Alice

      3) call your congressmen and senators and complain, alot!! [end quote]

      I liked the article, and the comments are interesting……but…again…doctors better watch out what they ask patients to do. Looking at CEO salaries is a bit foolish too? It may take patient’s eyes off your salary for awhile……and let me say again I think many doctors are paid quite fairly…..but some stats say doctors make five times what their average patient makes. A good doctor is certainly worth five times what my husband makes..

      I guess I am confused about the alternatives. Nothing I have read so far is a complete answer that is realistic. I am not searching for a medical utopia…..but I will say in my own mind the patient is foremost….the foundation of the reason it exists.

      I have been reading about doctors hatred of the Great Satan Insurers…….and, yet…..what I read seems to follow logically through to more regulation? The insurance companies were just regulated quite heavily a month ago. Sometimes it seems to me doctors are shooting themselves in the foot.

      Brian says: 2) ask why its illegal for your doctor to give you a break on your bill and

      Then Brian says: And worse, to insinuate that if patients do not have insurace they are charged astinomical rates at the choice of doctors is absolutely false, cruel, and a lie. [end quote]

      Alice asks: Please help me out here. If it’s illegal for the doctor to give me a discount ….I am confused why it is wrong for the author to insinuate that patients will be charged high rates?

      • Paul Dorio

        It’s a matter of perspective. If patients could see that doctors have to charge uniform rates, regardless of a patient’s insured status, and that those rates are set out by insurance and guidelines, then perhaps patients can direct their bill-related anger to the insurance companies, instead of the doctor. At least, that’s where I feel is the crux of the “continually-rising health care cost” issue.

        • Alice

          Thanks Paul…but…(you knew that was coming)….how can doctors, or collectors, or the hospital accept a much lower amount if you offer to pay it fast with cash? Some people negotiate before surgery. If doctors are locked in by insurance companies where is the leverage…the wiggle room for a patient paying cash!

          I thought the rising cost was associated with innovation with tests and drugs?

          • Paul Dorio

            Interestingly, if you call the hospital and ask for a discount on your bill they will often reply with a positive answer. Especially if you either don’t have insurance or have a plan that forces you to pay a fair amount out of pocket. So that implies to me that amounts billed could be lowered, in a perfect world, to actually reflect true costs of services/equipment. Instead, costs are billed at inflated prices to hopefully capture the “allowable” amounts from insurers. Therein lies the quandary, eh?

  • Jeff

    Currently, we pay doctors by paying insurance companies. Insurance companies, as we all know, have a HUGE conflict of interest when it comes to paying-out claims.

    If I read correctly, your competent Oto, didn’t get paid $537, but rather $113.29. Not only did he spend 7 min with you, but remember he/she has a staff behind the scene that worked more than 7min trying to collect $113.29 from all your insurances and then turn around and bill you for the $22.65. I’m guessing your Oto didn’t see that money for at least 45 days after services were provided.

    So, how should doc’s get paid? How about if we pay them just like any other service profession… cash at the time services are rendered and without a third party deciding what will and will not get paid (and how much).

    • Paul Dorio

      YES! Like dentists and veterinarians!

      • Alice

        Great idea that may make you homeless:). Sure some docs brag about a cash only service…but they only tell half the story. There is no way their patients are paying for tests, etc. out of their own pocket unless they are independently wealthy…and few Americans are. They brag they are so good people will pay cash to see them…I realize this does work well at brothels….not many complaints there….yeah….I see some definite correlations! Ha!i

        If a vet’s bill is too high you put the animal to sleep…if the dentist’s bill is too high they yank the tooth and you either live without it or save up…or dentist’s offer loans now. With this method we will have some choices…death….or trailer trash teeth:). Or a nation of toothless terrors!

        • Anonymous

          If people paid the small stuff out of pocket (which would result in less bureaucratic cost of insurance reimbursement) and only used insurance for big stuff that they could not afford (just like how people have car and homeowner / renter insurance with deductibles), wouldn’t that be more efficient?

  • Jack

    I completely agree with Dr. Broker!

    “Amount billed for a medical visit and diagnostic medical exam $537.00; what?; not covered $423.71; covered $113.29; deductions $22.65; total approved $90.64; total approved after Medicare payment $00.00; amount I may owe $22.65.”

    So at the end your ENT got paid a grand total of $113.29. Wow….should we call the police and arrest him?

    Probably 50% of that $113.29 went to his overhead (equipment and staff) so he took home $56.65.

    Yeah, it ended up being ear wax. But what if it wasn’t?? Who was going to take care of that?

    Is the American Insurance system screwed up? Absolutely!! Way too many middlemen with their hands in the cookie jar that drive up cost.

  • Emily Gibson

    In our college health center, the physicians are paid about $60/hour, salaried through a mandatory $70 per quarter fee structure so students can have access to unlimited free clinic visits. If there is a procedure or lab done in the course of the visit, that is charged essentially at cost.

    Cerumen removal (usually a nursing duty) in our clinic carries a procedure charge of $15, no matter how long it takes, whether one ear or both ears. For perspective, wart treatments are $12 (no matter how many warts), a simple laceration repair is $35. These are reasonable charges for the time, materials and expertise.

    I find it hard to believe that in another setting, it costs more than that to provide the same service.

    • Jack

      May I ask where is this?
      Does the school subsidize the clinics?
      Honestly those charges won’t cover the basic overheads of rent, utilities, front desk staff, RN, physicians and equipments.

      • Emily Gibson

        A public four year regional university–our building and equipment was state funded seven years ago so we are not paying rent, but otherwise support all staff salaries/benefits and clinic operational costs through the student fee structure. We do not bill insurance (we supply the coded forms so students/families can seek reimbursement themselves) so save by not having extensive billing and collections staff.

        In addition, because all our patients are online, we provide many of our clinical and patient education services online through our secure patient portal and EMR, reducing the need for face to face clinic visits.

        It is an example of an efficient and cost effective model for primary care services.

        • Steven Reznick MD

          Rent has always been a major chunk of our office overhead. You are fortunate to not have to pay it and downplay its importance in being able to deliver services cost effectively

    • Vox Rusticus

      You center sounds like a lowball payer, although if you don’t schedule many patients, then $60.00/hr might be realistic. Not many doctors who are not otherwise employed (maybe a resident) or in a semi-retired status would be interested in that level of pay.

      And with mandatory enrollment of the student body at $280 per year, (or $210 for three “quarters” of full-time enrollment) that is a decent budget of your school is large.

      Let me guess, you don’t take insurance at your center.
      And if you don’t take insurance, do you collect up front? (And if the center collects subscriptions by a mandatory quarterly fees of $280 per annum, and students are “seen for free,” who pays these low-dollar charges anyway?

      $35 for a laceration closure can’t be more than cost of materials and that is for the simplest closure using the least expensive materials. Of course, if the laceration requires an x-ray before closure, is that covered too?

      Your center is being subsidized by institutional malpractice coverage, institutional support for facilities, staff and utilities. The prices you are quoting don’t accurately represent the costs of your operations. As someone who runs a practice that does office surgery, you can trust me on that.

      • Emily Gibson

        I average 4.3 patients per hour, face to face, and personally provide another 2 online consultation “visits” per hour online. The pace is quite busy during the three main academic quarters, but summers are 20% of the usual student enrollment so runs with very reduced staffing.

        You are correct, it is a lower than average primary care physician salary. The advantage is predictable “down” times when students are away from campus so there is time to refresh and renew.

        • stargirl65

          I calculated things out and it is the standard salary for many primary care physicians. Maryland did a survey a few years ago on its family physicians and their annual income was about $105K. Her salary is higher than that based on my calculations. (40 hour weeks and working 50 weeks per year)

          • Vox Rusticus

            50 weeks is not a standard work year, unless you are a resident. With holidays and vacation and meetings, 47 or 48 is more realistic. Also, “salary” is not a complete reflection of total compensation unless there is no performance bonus, which would not usually be the case. Even Kaiser pays bonuses.

            The $60 per hour as an hourly rate for worked hours on a typical work year comes out to about $115,000. That would be lousy pay for Maryland (a state that loses doctors to better-paying locations anyway.)

  • Jack

    Dr. Lundberg do you practice medicine currently? I find it shocking with your lack of understanding of the current “Insurance” payment system. Charge vs allowable vs collection are very different. I am very surprised that this article even got published.

    • Vox Rusticus

      The style of the article suggests a popular target audience and not a group of professionals who already know about billing and the discounting of insurers. Cornpone stylistics with references to “gobbledegook” without anything incisive to say, and completely avoiding the issue of invidious insurer discounts while slyly suggesting that doctors gouge patients because some nominal charge was higher than what Medicare paid (as if that was sufficient evidence that Medicare paid fairly and that the charge was excessive) tells me the writer has some other agenda. What exactly that agenda is is hard to guess, but as the first poster above wrote, the writer as a doctor himself ought to have known better. So I don’t take Dr. Lundberg’s article very seriously, and I really do not think he is being altogether honest, either.

    • george lundberg

      Thank you all for your comments. I hope the many readers of find the discussion useful and I hope more weigh in. My original weekly At Large column at MedPage Today is intended to stimulate thought and discussion on a host of timely topics. I ask many rhetorical questions, often from experience and current events.
      Having been in American medicine since I began as an orderly in a Catholic-run city hospital and then getting my MD in 1957, I know a little about medicine, including its daily state of unfair “economic malpractice”.
      When and how are we going to “fix” the broken system?

  • Margalit Gur-Arie

    I don’t think that Dr. Lundberg was asking how the payment system works.
    I think he was asking about the meaning and relevance of the initial $537.00 charge, and if he wasn’t, then I would like to ask.

    Obviously Medicare pays $113.29 for this CPT. Private insurers may go up to $150.00 or so, but I don’t see any insurer paying anything close to $537.00.
    The doc, or office manager, or biller, knows these numbers in advance, so why charge $537.00 to start with? Is there an expectation that someone will actually pay $537.00? Who would that be?

    For better or worse, I understand how allowables and collections work, but I never understood how an office (or hospital) decides what the charges are, and there is tremendous variation out there.

    • David Allen, MD

      There are both insurances and patients that will pay the higher value. I once saw a hospital patient whose insurance I did not accept. Charges = $531. Payment from insurance = $531. I have also had patients pay me (because their insurance company had already paid them). So out-of-network folks are often paying the higher amounts. Interestingly, as a hospital-based neurologist – I have considered becoming non-par with most of my private insurances due to this.

      • MedPeds Doc

        I have a colleague who works at a well known specialty hospital in NYC. All of the docs there only accept out of network patients for this reason. Appparently he makes 2-3X as much because of this practice. His group and services are in demand and the out of network patients are willing to pay for the services. Wow, imagine that! Supply and demand economics. Isn’t that a novel thought. Admit it or not, we physicians, and most nonphysicians, will work harder when the incentives are right. Incentives are generally financially related. I love helping people, I really do. But that is not what is the greatest motivator to get out of bed at 3 am or to work in 3-6 patients at the end of my already busy day and in detriment to my personal and family time.

  • Harry

    I agree with Jack completely on this matter. I can see how EOB’s (explanation of benefits) could be difficult to completely comprehend. The devil is definitely in the details. There are major differences between what docs CHARGE and what insurances set as ALLOWABLES (what docs actually get paid) for given office visits, procedures, etc. Insurance companies will pay docs the lesser of the charged amount or the insurances predetermined allowable for services. If docs didn’t set their charges higher than the insurances allowables, they would be paid at the lesser rate. To ensure that this doesn’t happen, docs set their charges often times well above what a given allowable is. So, this explains, in this example, why there were charges of 537.00, but yet payment of 113.29. The difference is then adjusted off. And the docs and their staff are then expected to attempt to collect whatever self-pay amounts that patients owe for the visit (ie. co-pays, co-insurances, deductible, etc), as it is spelled out in the patients’ contracts with their insurance companies. This is often times not an easy task, yet it is money that is owed to the docs for their services, IN ADDITION to the payment from the insurance company. That is where the 22.65 comes from in this example. And just because this amount is what the insurance companies say the docs are owed and responsible for collecting from patients, doesn’t necessarily guarantee that the patients will actually pay it. After all, docs are all millionaires and the patients have other more important bills to pay, before even considering paying the docs.

    Emily, as far as the college health center goes, there would still be an inherent cost of providing student health services. With the services you mention (and their associated charges), along with the mandatory quarterly student health fee, there is much more than meets the eye. $70/quarter per student generates signficant revenue for which the health center can operate and cover it’s expenses (and profit from what i would suggest). Even at a small college of say 3000 students, those health fees would generate $840,000 in revenues! i would also suggest (from my own experience) that many students who pay these fees don’t ever seek medical attention from the center. And the health center then charges an ADDITIONAL fee on top of that for those specific services you mentioned. And don’t forget, most colleges/universities have deep pockets as well, so they are able to absorb costs from other areas if needed. Impressive!

    It’s ultimately the third party payment system (ie. insurance companies) in this country that have both docs and patients heads spinning. Patients are irritated because they can’t understand why they have to pay for certain health-related expenses even though they have health insurance and pay premiums every month for coverage. Docs are running out of steam because they’ve lost control of the business of their own profession. For years, I believe most docs have wanted to provide good quality medical care for patients who have entrusted them with that, but at the expense of losing sight of the business aspects of the profession. As a result, insurances have come to operate as a very profitable middleman, who have dictated to docs themselves, how much and under what circumstances, and by what time frame they will get paid. The costs of running a medical practice continue to increase, yet payments to physicians are primarily set by these insurance companies and are often times not enough to run the business and remain profitable. i have seen a mass exodus of docs from private practice to local health systems (who are more apt to absorb certain costs of doing business) as a result of this. There are very few ways to increase revenues, other than by operating in this volume-driven payment system that the insurance companies have created, working longer hours, seeing more patients, spending less time with each patient, and having less of a relationship with them. Realize and appreciate then that those docs who choose to spend more time with their patients and establish more of a relationship and hopefully provide better care, are doing so at their own expense and are actually losing money doing so.

    So, to say the least, insurance payments to physicians are quite complex and frustrating to a lot of us. And there is a method to the madness of setting prices for medical services. But don’t get too caught up in charges, rather look at how much your doctor is actually being paid! And don’t forget, the amount the docs are being paid isn’t just pure profit either………they’re running a business that is very expensive to operate, so they can keep their doors open to patients who need their expertise and understanding.

    • Emily Gibson

      just to clarify–there is no profit nor deep pockets in public institutions of higher education.

      Our budget is distributed among a number of related services on campus, including enforcement of pre-matriculation vaccination requirements, athletic health care, a large portion to maintenance of mental health services and counseling center on campus, and all prevention and wellness services, some of which are mandated by federal law for campus alcohol and drug prevention.

      • Harry

        Thanks for the clarification Emily. My whole point however, was trying to focus on the mandatory $70/quarter student health fee. Under this setting, if most doctors offices operated this way, they would probably generate more revenue, compared to what we are actually being paid by insurance companies. Being a private practice Family physician myself, that would definitely be the case for my practice. I think some docs are beginning to realize this and that is what has created the whole idea for direct pay or concierge practices. Increased revenues and decreased administrative overhead is beginning to lure more physicians into this type of practice model. Until one actually sees the financial numbers involved as far as insurance payments for services provided and the overhead expenses associated with running a medical practice, most people (employed health care providers included) will never appreciate the struggles that the rest of us deal with on a daily basis, outside of direct patient care.

      • Steven Reznick MD FACP

        You are dealing with basically a young healthy patient population at a college compared to the average medical practice in an urban or suburban setting. I am not saying that you are not dealing with complex and at times difficult problems. I am saying that for the most part you have a younger, healthier more resilient patient population many of whom pay their annual fees and are never seen . A pharyngitis and a low grade fever in a healthy 21 year old is a different disease than in an 81 year old with an ischemic cardiomyopathy , an implantable AICD, COPD, Non insulin dependent Diabetes Mellitus and renal insufficiency.

        • Emily Gibson

          Very true, Steven. But I thought the original question was the appropriate charge for removal of ear wax, which is usually a simple procedure.

          I’m not challenging the fact that compensation for evaluation and consultation of highly complex and complicated patients should be higher than what physicians are paid in a university health setting. That is a different issue. I spent ten years working in an HMO and in private practice so I’m well aware of the differences and made an informed decision to work at a lower compensation with a healthier population, allowing opportunity for teaching and public health management.

  • Dr. J

    The specialist in this case is is doing an evaluation followed by a technical procedure, and that evaluation is part of the cost. The writer discloses that he has seen multiple emerg. depts. and ENT’s and this is part of the high cost. Though it would be reasonable to expect ear wax removal to be an isolated technical service in the context of an ongoing doctor-patient relationship, that had developed from an initial comprehensive exam, it is not reasonable to expect that subsequent new providers will forgo the initial assessment and do only the technical procedure in order to keep costs down. The writer has complex ears, he wears hearing aids. It would be unforgivable if any of the providers didn’t consider the possibility of important alternative diagnoses on first meeting with the patient and to expect them to do so is ludicrous.

    In the case presented the reality is that the ENT got paid about $112 dollars to evaluate a specific problem and perform a specific procedure. I think that is on the cheap side of reasonable. The initial costs and mathematical manipulations presented are meaningless; they represent neither a true cost nor a true discount. The amount of $537 is meaningless to both you and your doctor, it should be ignored.

    In general I agree with the sentiment of cash in hand for services, with honest up-front estimates from physicians, and re-evaluation of the situation if unexpected additional costs are encountered. This is how basically every other professional group from lawyers to general contractors runs their financial affairs. In a real market you would call an ENT and ask how much an ear cleaning would cost, if you were a new patient they would give you a cash estimate for evaluation and cleaning, if you were an established patient and needed only the cleaning the rate would be less. The ENT would set their rate, and if you didn’t like it you would call another ENT.

  • Finn

    “Is there an expectation that someone will actually pay $537.00? Who would that be?”

    That would be the self-payers, who are essentially being gouged by the current system under which government and private insurors slash payments.

    I think the university health system described above is a terrific model–for a defined population of overwhelmingly healthy young adults who for the most part need their bumps, bruises, lacerations, minor enteric and respiratory illnesses, and impacted earwax addressed. It wouldn’t stand a chance of working in the outside world with patients of all ages and the high rates of diabetes, hypertension, hyperlipidemia, heart disease, osteoporosis, cancer, and other chronic diseases that afflict older adults at substantially higher rates.

    I do think that paying doctors an hourly salary would make far more sense, since their compensation would automatically be adjusted for more complicated or involved patient visits that take longer. I’m at a loss, however, as to how we would accomplish that under the current system controlled by third-party payers.

    • Vox Rusticus

      “It wouldn’t stand a chance of working in the outside world with patients of all ages . . . .”

      What are you talking about? Kaiser Permanente does this kind of thing all the time, and it works very well for the patient that wants to belong to an HMO.

      • Jack

        Kaiser charges far more than the University charges described. They also pay better than what Emily described.

        • Vox Rusticus

          The counter charges at the university clinic can’t be taken as a true representation of the costs of services or of any kind of market price. Those appear to be nuisance charges; the university is charging its students a mandatory $70 per quarter for the health center, whether they use it or not. That is where the money is coming from to operate the clinic, not from the tiny fees. If this is a regional state campus with15,000 students, you can do the math at what the revenue for the health center is, likely more than $3M per year. At the quoted hourly rate, you could have three professional staff on duty every day of the year around the clock and still not spend half that amount. And supposedly the facility rent is gratis from the university. The university is probably realizing a profit on this center.

          This isn’t magic, it is a prepaid outpatient clinic HMO with light use fees to dampen overuse. They get the money up front, in cash, and they don’t have to file claims. The fact that their clientele is low-risk of chronic disease and generally very healthy as most university students are, utilization rates are low.

          Kaiser provides far more comprehensive services, more specialty services and yes, sees older patients but generally patients who are well enough to work, an their dependents, who are also mostly younger than the working beneficiary.

          I know Kaiser pays better than the example of the uni cilinic. That wasn’t my point. I was noting that a prepaid comprehensive care option does exist in Kaiser for those who want a closed-panel HMO type plan.

  • IVF-MD

    For those of you who argue that the free market would not result in lower costs of medical care, I challenge you to consider the above discussion and ask yourself what would happen over time if one doctor charged $537 and another doctor charged $15?

    • Jack

      I agree with IVF-MD.

      Give the power back to the patient and the doctor. The patients will now be responsible to shop for the doctor and save money for their care. Hopefully this leads to better life style since they now know they have to pay for the consequence of poor health. The doctors can/should charge less because overhead is much lower without needing staff to collect and argue with insurance/patients.
      It’s a WIN for both but is the public ready to take on this power and responsibility?

  • SarahW

    The solution seems rather straightforward. Medical savings accounts, or insurance that cannot negotiate with physicians or hospitals, only the insured, and doctors who charge what their services are worth, what the market will bear in a given area.

  • pcp

    I made the mistake last year of performing an ear lavage on a patient who was in for a complete history and physical. God, thorough, efficient care, save time for the patient, and all that baloney. I was paid (by one of the largest insurers in the country. not Medicare) a total of $22.50. The entire physical was considered “incidental” to the ear lavage. Fought it for months and never saw another penny.

    • family practitioner

      That will teach you to be efficient.
      Did the patient care?

    • gzuckier

      Mmmm…. that might explain a mystery I’ve been puzzled by for a while; some doctors don’t seem to file claims for routine immunizations (playing hob with healthplans’ quality of care reporting). But if, as in your case, such a claim resulted in reducing their reimbursement for the actual visit, they may have discovered (or even just suspect) that they will do better by just throwing in the vaccination for free and getting the full amount for the well child visit or whatever.

  • tony serrano

    I have an idea. Can we standardize the office fee for each diagnosis.If a patient is diagnosed with strep pharyngitis by any healthcare provider be a GP, ENT, pediatrician, NP or PA the patient would pay the standardized fee for strep pharyngitis, for example $75. Same thing goes with other diseases like DM, HTN, COPD, Asthma, etc. It would be like buying a Big Mac at any McDonald anywhere in the USA, it would be the same price. This method of payment would be easier for patients to understand.

    • Jack

      No so simple. Diseases present in various methods and often maybe masked by other diseases.
      Just Diabetes alone could range from diet controlled to such labile blood sugar that requires an insulin pump implant.
      Healthcare is not like fast food and certainly is not one size fits all. That’s why it takes such long training to become a physician.

      I see one of the problem of our nation is that everyone want a panacea for everything at drive throu pace and at whole sale price or free.

      • tony serrano

        If you notice that my suggestion is a standardize fee for each diagnosis only and it doe not include procedures and management of the diagnosis. As a GP if a patient comes to my office and I diagnose this patient with appendicitis, patient knows before hand that he my service would be paid for the assigned specified fee for appendicitis, even though the patient would be referred to a general surgeon for appendectomy. There would also be a universal standardized fee for any surgical or diagnostic procedures. When you buy a car and it shows the basic sticker price, then it is up to you if you want to pay for modifications, same thing with your hamburger, if you want french fries and soda or not.

        • tony serrano

          This method of payment will justify the payments for GPs and other medical providers who encounter patients with multiple complaints and diagnosis. Patient could come for URI, then would show a rash, and get refill of meds for HTN and DM. then would pay for the office call of $65. and another patient would come for one diagnosis like a stye and would pay $65 too. This happens all the time in most GP’s offices. Compare to a surgical procedure, everything is itemized, Go to your dentist and the more procedures you have the more you pay. But GPs have been abused with this old method of payments.

          • tony

            What about a patient who comes in for a headache and the doctor has no definitive diagnosis and the discharge diagnosis is headache etiology to be determined, should the charges be the same? I believe that when a patient come in for a consultation and the doctor can not come up with a definitive diagnosis, the charges should be less. There ought to be a special fee for generic diagnosis like abdominal pain, etiology undetermined or to be determined. It is like when you take your porsche to a regular mechanic usually the mechanic is honest enough to say he can not fix it. They do not check under the hood and give you a bill and say I do not know what is wrong with your car. I know this is a simplification of a complicated problem.

  • rezmed09

    I would think that for most Americans that get the barrage of bills after an ER visit, Dr. Lundberg asks very reasonable questions. The EOB’s appear insane, quoting “astinomical rates” as one reply said. God help you if you are the working uninsured.

    Get real, the free market will not fix this. So much of our care would not be affordable to so many Americans if they had to pay out of pocket. Do you really believe that the voting public will allow docs to not treat people and let them die from appendicitis because they don’t have the money? Pay as you go for care is really only for the walking well or a high-end practice.

    Our lack of consensus on solutions virtually ensures more government regulation and complex payment schemes.

    • David Allen, MD

      “So much of our care would not be affordable to so many Americans if they had to pay out of pocket.”

      Actually, it is quite the opposite. If everyone were paying for routine care (not catastrophic care, which is what insurance should really be for) out of their own pocket, then prices would naturally come down. Just take yourself through a few examples of buying groceries with government money versus your own, or gambling with someone else’s money or your own – and you should be able to see the truth of this.

      • MedPeds Doc

        Agree 1000%. Look at what in medicine is charged out (not reimbursed) at a lesser rate than 10 years ago. Lasik eye procedure, many plastic surgery procedures. And why? Competition as more physicians provide these services has driven the cash price (paid by the informed patient who has shopped around) down in this time period. Again, supply and demand economics allowed to adjust the market naturally. Brilliant!

  • soloFP

    It does not matter how much a doctor charges for a service. You could charge a million for an office visit, but the insurance companies have one way negotiated prices. Currently Americans want it all for the $20-$30 primary care copay. For 2011, I am looking at collecting an average of $30 for a copay and insurance checks that average less than $30 for a total 99213 visit average of $56. Insurance companies know the price breaking point. If copays would hit $45-$55, it would make more sense to quit taking insurance and get cash at the time of the visit. The deductibles are increasing for 2011, too.

  • Chris Johnson

    The discussion as been over outpatient things. I do intensive care. Some of you favor the (I think mythical) model of the patient shopping around for medical care as they would for a household appliance, finding the best price for acceptable quality.

    But what happens when an ambulance picks you off the street when you collapse with chest pain and hauls you to whatever facility their protocols call for? What if that is the most expensive place?

    And what if, when you wreck your car, the highway patrol officer calls in a very expensive helicopter to the scene, rather than a cheaper ground ambulance, because he thinks the 15 minutes saved by flying is vital? Do you get to gasp out “but the ambulance is cheaper,” before they intubate you?

    Healthcare consumers, who were once called patients, really don’t have the sort of purchasing options with healthcare they have when they buy a dishwasher. I don’t think healthcare is, or should be, a simple commodity. My grandfather, practicing medicine in the 1920s, did sometimes get paid in chickens, sacks of potatoes, and offers to clean out his barn. But much of what he had to offer medically didn’t really work anyway, so if somebody chose not to buy it, little harm resulted. It’s not that way anymore.

    • Dr. J

      I’m of the opinion that medical insurance potentially functions well for catastrophic medical expenses such as an ICU admission. No one can individually bear these expenses and pooling of risk is sensible.
      Pooling of risk for required regular (and cheap) outpatient medicine makes no sense though, the idea of pooling a risk that almost all of us have is a far less powerful idea (and it has really fouled up the out-patient doctor patient relationship). If you really feel that healthcare should not be a commodity than some scheme of general insurance is definitely required, though as an emergency doc in Canada I can tell you that it is no panacea (and the associated taxes are brutal)…

    • David Allen, MD

      That is what insurance is for – catastrophes. The problem is that so many things that are not emergenies/catastrophes are now paid for by insurance. This is why some people call modern day insurance ‘pre-paid health care’. This ‘third-party payer’ system is what has to go – as it is driving much of the problem (as others have pointed out).

      My understanding is that many insurance companies are not allowed by states to offer simple, catastrophic only, plans. Is this true? I know that if I could buy such a plan, I would and would pay cash for everything else.

  • PICUDoc

    Should and ENT charge the same for an earwax cleaning as a nurse in the college clinic? You know, I think BMW should charge 20 bucks for oil changes like Jiffy Lube.

    In all seriousness, personally, I’d work my health insurance like my car insurance. For minor things I’ll just pay out of pocket and let insurance kick in for the big things. I think by giving the customer choices for smaller nonemergent things it will control costs. If you want the latest and greatest antibiotic you can pay through the nose, or you can get cipro for 4 bucks at Target. If you want your earwax cleaning by a nurse $15, by an NP $50, by a generalist $150 and if you want the royal treatment by an ENT $500….

    • Other Sarah

      “You know, I think BMW should charge 20 bucks for oil changes like Jiffy Lube.”

      Pretty much. Unscrew the cap, switch out filters, put cap back on, pour in oil. You could have a PhD in physics and work for NASA; i still ain’t paying you more than 20 bucks for something that could be done by an 11-year-old with good forearm strength.

      This may or may not have any bearing on your actual point. =)

      • gzuckier

        Yeah, but it’s the 5% (random guess; my share seems to be much greater, somehow) of oil changes that involve seized oil filters or stripped drain plugs or such that separate the grease monkey from the service technician. And as every service provider knows, informing the customer after the fact “Uh, we’re charging you an additional 3 hours labor because the last guy who changed your oil seems to have fastened the drain plug with a welding torch” is generally not well accepted.

  • Brian Broker, MD

    Ultimately, it seems this discussion is about health care costs in general and not just physician payments. With that in mind, I’ve created a poll on my blog. Please click here to vote on the poll: (or paste into your browser)

    By the way, I have to ask Dr Lundgren; for someone who claims to be concerned about health care costs, don’t you think it was inappropriate of you to go to emergency rooms to get the wax removed from your ear?

    • Paul Dorio

      Lol! I’d been wondering when that would get brought up! ER AND ENT visits.

      • Alice

        I lack time to reread, but good grief didn’t he say he lost his hearing? Even a doctor cannot look in his own ear or self diagnose hearing loss? Wouldn’t an ENT know that?

        My oldest son had a brain tumor and 20 years after his beam radiation he woke up completely deaf. It was heartbreaking….we ran to an ENT, but if it had been after hours we would have went to the ER. We were desperate for help.

        • Paul Dorio

          Yes, perhaps for the first visit, during a sudden onset of symptoms, an ER visit is appropriate. But once the diagnosis is known and future similar events occur, it is purely arrogance or doctor’s “professional courtesy” that brings one to visit a specialist for such an issue. Appropriate use of resources by all.

    • george lundberg

      Hello Dr Broker,
      The name is Lundberg, not Lundgren.
      The actual number of times I used an ER to get my wax removed was about 2-3, when I was in some city to give a speech, knew no physicians and needed to be able to hear. I have tried IMs and FPs but the irrigation procedure they have used usually fails for me. Most of my care has been repeat visits to established Oto offices (not first visits).and the “big charges” with “small payments” is usual.

    • gzuckier

      I see the results of your poll result in the “roundup of the usual suspects”. Insurance company profits; ok, that’s pretty nearly 5%, in a profitable year; and tort reform, that’s been estimated to max out at 5%, when you include the costs of any awards, the cost of malpractice insurance, and the cost of defensive medicine all together.

      So, the vast majority of your blog visitors firmly believe that they can solve the healthcare finance crisis if only they can lower the cost by 10%.

      That kind of thinking is why we can’t have nice things.

  • IVF-MD

    This is an interesting discussion. We have presented many sides of what the problem is and one theme that I note is the anger that our system is broken by the fact that the third party insurance corporations “control” everything.

    In a voluntary society, this would never happen because in a voluntary society, what sane patient would want to give money to an entity that is not satisfying them?

    So perhaps the solution begins with asking ourselves “If it is indeed true that so many doctors and patients are dissatisfied with the current insurance companies, then why do doctors continue to transact with them and why do patients continue to transact with them. Once you arrive at the answer to that question, you will have taken a big step towards figuring out the solution.

    • Vox Rusticus

      “In a voluntary society, this would never happen because in a voluntary society, what sane patient would want to give money to an entity that is not satisfying them?”

      The exception here is that people don’t even want to give what they perceive as “their” money to the insurer, either. Thus we have the hidden transfer of pretax money from the employer to the insurer that the employee (those with good negotiated contracts, anyway) never really perceives as “his.”

    • Alice

      IVF says: So perhaps the solution begins with asking ourselves “If it is indeed true that so many doctors and patients are dissatisfied with the current insurance companies, then why do doctors continue to transact with them and why do patients continue to transact with them. Once you arrive at the answer to that question, you will have taken a big step towards figuring out the solution.
      [end quote]

      Alice says: Because in the last year they picked up an almost quarter million tab my family ran up from cancer and heart problems. Without insurance how would I cover that?

      I have libertarian leanings and really don’t like regulation. Ditching insurance companies has huge repercussions, and I don’t want the government doing their job. The age of patient’s paying out of pocket could become possible for minor care, but not major care. And if it becomes a reality for minor care we will need less primary care doctors….people will turn to nurse practitioners (who I like very much)……and they won’t go to the doctor which will lead to more problems like infections, etc.

      Let’s say you get your way……ditch insurance companies….suggestions?

      Gosh…….abolish an industry just because they make you jump through hoops. Humpf!:) I thought you liked the free market?

  • IVF-MD

    Let’s say you get your way……ditch insurance companies….suggestions?

    Whoa, stop. Please don’t put words into my posts that I didn’t write, Alice. :)

    There is a difference between allowing people voluntary choice and ABOLISHING something. I have no wish to abolish insurance companies nor to take away the rights of other people to buy insurance.

    I fully respect your right to buy insurance. In your case, I’m assuming you’re happy with your insurance company when you compare what would have happened to your financial status had you not bought insurance.

    But now we’re continuing to make some progress in this discussion. So I had posed the question “If it is indeed true that so many doctors and patients are dissatisfied with the current insurance companies, then why do doctors continue to transact with them and why do patients continue to transact with them. Once you arrive at the answer to that question, you will have taken a big step towards figuring out the solution.”

    I was hoping somebody would reply the way you did, so thank you. You have demonstrated that the initial premise of doctors and patients being dissatisfied with insurance companies is not universally true. Some patients ARE happy with it and some doctors ARE happy with it.

    I take from your statement that you are happy that you (or your employer) paid the insurance company. Fine. The point is some people support the insurance companies with their money because they are satisfied with what they get back. With regards to doctors, it’s the same thing. Some doctors are happy to contract with the insurance companies because they feel it gives them some value, perhaps a continued stream of patients and income.

    So in a voluntary society, some patients are happy with the insurance companies and are willing to give them money. Some doctors are happy with the insurance companies and are willing to perform labor on behalf of the insurance company (and their insured). Everybody happy.

    Then the next question is, can we then assume that all people who buy into insurance are happy with it? And that all doctors who accept insurance are happy with it?

    Rhetorical question, but the answer is NO. So then we have to ask, if a certain subset of people are unhappy and dissatisfied with insurance corporations, then why do they continue to do business with them?

    Again, once you arrive at the answer to THAT question, you will have taken a big step towards figuring out the solution.

    • Alice

      IVF asks: Rhetorical question, but the answer is NO. So then we have to ask, if a certain subset of people are unhappy and dissatisfied with insurance corporations, then why do they continue to do business with them? [end quote]

      Because if you do not your income will go down. It’s compromise for self preservation…..but admitting that you need insurers ….is well……difficult. Some doctors are cash only for their own gain…one posted he makes more money without the staff he needed to deal with insurers. He must practice in a wealthy area….he sounded a bit arrogant…you know that odd Buckley quality? It was a dead give away when he started his response with, “Well….darhling….!” *wink*

      Honestly, if I were a doctor I would tell Alice to go and get some sleep NOW! Ha! I will abide….but send drugs!

  • Alice

    Whoa, stop. Please don’t put words into my posts that I didn’t write, Alice. :)[end quote]

    Moi? That was really a question I was asking because I knew from past posts something wasn’t right. Rushed….more to come……….

    • Alice

      It is almost 1 am, so maybe I am delusional….I guess I am confused about why doctors are not happy….actually, they are perpetually dismayed…. but let’s say we do a comparison?  Now remember I am an outsider from your perspective….but when I look at my auto insurance I do not see the mechanics and auto body shop owners whining at this level.  Yes…they complain about the pain insurance companies are..but they see their profit from insurers.  They see that insurers are greedy, but it helps them make a living.  It is no  secret insurance companies exist to cash checks, not pay out.  We know when we buy life insurance or a lottery ticket, etc. it is a game of risk….you pay and hope you do not need it…and so does your insurer.

      Insurers are greedy, doctors are greedy, and often the patients are too….but sometimes we take bad cases and make more bad law and regulations.  Sometimes they serve us well….and usually they do not.  I see insurers as a free market that generates a lot of income for doctors, mechanics, home remodelers, etc.  Do they play fair?  No…but either do a lot of doctors who recode to make sure they get paid…pad the bill….think of themselves and their career first…then the patient….um….a bit like insurers?  But I need doctors and insurance, and sadly, because both parties acted poorly they got regulated.  

      There is a group of doctors that wants abolishment of the insurance companies.  So, as I stated I completely understand what I am purchasing with insurance.  I realize other people lost on their premiums so I could gain.  A game of odds with life, auto, medical, and home insurance.  

      Why can’t doctors just belly up and play within the rules like other businesses?  You will make a much better living than the vast majority of your patients (who suffer from student debt, job stress, insurance woes,  etc.).  As I have stated ad nauseam ….I love my doctors…if they made a million dollars this year….good on them….but much of their profit came from insurance companies.  But my doctors like their jobs…and admit insurance is a real pain….but the alternative is more painful.  Public option?  More regulation?

  • ninguem

    “…..The discussion as been over outpatient things. I do intensive care. Some of you favor the (I think mythical) model of the patient shopping around for medical care as they would for a household appliance, finding the best price for acceptable quality….”

    …..followed by the same old tired tropes about shopping for helicopters and shopping for intensive care and cancer surgery, on and on and on……….

    Once again. Patients with HSA’s and high-deductible health insurance do shop price. HSA’s have five years of use now, The data has been coming in.

    No, patients don’t shop price for intensive care and cancer surgery and the usual breathless stories.

    The insurance shops price, it’s called a “network”.

    The patients shop price on the things when they CAN shop price. The things they CAN control. Generic versus brand-name medicines, outpatient surgery, whether to pursue certain treatments in the first place. Doctor Lundberg going to an ENT surgeon to remove earwax that the FP can do for a quarter of the price by Lundberg’s numbers at least.

    “But what’s that against the cost of intensive care?”

    Plenty, actually. We spend more on urinary and fecal incontinence than we do on kidney dialysis and coronary bypass combined. Savings on low-tech interventions adds up. So there will be money for the high-tech interventions when they are needed.

    And the savings are reflected in the performance of the consumer-directed insurance plans. The policy wonks talk about “bending the cost curve”. When people have HSA’s, they have the ability to shop and the motivation to shop, they DO “bend the cost curve”, and it’s reflected in lower premium rises and sometimes even a drop in rates.

    Which is why I have no respect for the Obama healthcare reforms. The one intervention that has been shown to help, they are going out of their way to destroy.

    Their fear is not that HSA’s won’t work. Their fear is that HSA’s **WILL** work. The healthcare dollar under the control of individuals. The middle class that much more empowered and less dependent on government. It’s an existential threat to the left.

    • Alice

      Ninguem….what an unusual name…I find myself so curious…odd……I know you are anonymous…but please do tell…are you a woman doctor? Your posts have been very good reading.

      Again, insomniatic posting from Alice (the laid-back mom whose teen daughters are chattering away to her as she posts tripe) …..if insurance is setting the costs then they are inadvertently helping the patients by keeping the costs down? Realizing they do it out of self interest for higher profits….which means less profits for doctors?

      • PICUDoc

        “playing by the rules” of the insurance companies allows patients to get “everything” for their $20 copay but fails to show them the real cost. It also leaves MDs in a battle with insurance companies as they scrape the margins razor thin. Now you’re right that doctors aren’t going broke on the current payment scheme, but I think for the bright college student thinking of a career, you can get way more bang for your buck from B-school vs. med school esp if you consider primary care.

        Going cash only would simply the doctors workflow, level the playing field across the job makret and on a certain level simply things for the patient. However, I think it would only work for the motivated patient. For some reason the thought having to fork over $200 for doctors visit turns people stomachs, but paying $300 for a brake job is just par for the course.

        I think all this applies to outpatient nonemergent medicine and insurance is a necessity for the astromically high cost inpatient stuff.

        • Alice

          “playing by the rules” of the insurance companies allows patients to get “everything” for their $20 copay but fails to show them the real cost. [end quote]

          Sorta like a deductible on my home and auto insurance. That’s the way insurance works. Cut them out and the government will take over……and when the government is running the show you will want insurers (and all their faults) back.

          It’s curious to me how we rally against insurers (rightfully, so in most cases) yet, for those of us who have had procedures and the insurer does their job and pays for it we glide through. We have to stop and think about what hacking away the third party means. It means doctors have more freedom….but what about the patient?

          I have been reading articles from doctors who really want the third party gone. I wonder where their scruples are. I realize it’s not looking promising for private physicians. Hospitals are much better at the insurance game.

    • pcp

      “We spend more on urinary and fecal incontinence than we do on kidney dialysis and coronary bypass combined.”

      I’ve heard this before, but find it impossible to believe. Dialysis is one of the things that is bankrupting Medicare. Do you have a reference?

      I have much less faith in the ability of HSAs to lower total expenditures on healthcare. When seeing an HSA patient, the physician is still limited by the insurer’s fee schedule, so the patient has no ability to negociate further discounts. Any possible savings are a drop in the bucket compared to three months in the ICU. Consumer-directed health plans do well because they attract healthier enrollees.

  • Paul Dorio

    Another aspect of this discussion that might help control costs is to modify the current insurance-pays mentality. Under EMTALA anyone is able to visit an ED and get seen and cared for. If, perhaps, the visits were reviewed and non-emergent visits resulted in bills being sent to people, perhaps we all would think twice before making that trip for this or that ailment. When my family members are sick over a weekend or in the evening, I use my judgment before calling someone, asking myself, can it wait until the morning? And I’m a physician! I could rush to the ED, like Dr Lundberg seems to have done for his “hearing loss” episodes. Fair use of finite resources allows costs to be contained. (and I don’t for a second think that most people would pay the bills they might receive, but perhaps it would help alter our nation’s mentality a bit.)

  • Alice

    Paul…I agree with this premise and think co pays are fair…..I pay our own with glee. That said my relative on Medicaid pays nothing and goes to the ER every two weeks. They cannot find anything wrong with him, but run the same expensive tests everytime. If he had the $100 copay I do he would not do this. Also. if it is deemed I went there and did not have a life threateniing problem the bill is mine. Why do the taxpayers with private insurance have fair guidlines the government will not duplicate?

  • anonymous

    My humble suggestion of an ideal system (which requires completely overhauling the current system):
    1. Use insurance only for the catastrophic expenses, make deductibles high to keep premiums low, make everyone buy this or have government provide this for everyone.
    2. Use HSAs for everything (including ER visits) up to the deductible, but with some new requirements and new leniency:
    a. Make it everyone’s goal to fully fund their HSAs at least up to the deductible, or more if posible. If this cannot be done within the first year, then within two years. Keep these funded as money is withdrawn.
    b. Ideally, there should be no maximum. Employers can match if they want. If we are feeling generous, taxes can be used to minimally fund the accounts of the poor.
    c. Take away the “use it or lose it” problem at the end of the year to encourage saving.
    d. Allow people to bequeath unspent money to heirs so they would think about whether that SNF to ICU transfer at the end of life is really worth it.
    e. Liberalize what people can spend this on (health club memberships, a bicycle or motorcycle helmet, things that we generally agree should statistically save money later). If we don’t want certain expenses to be applied to the deductible, we can allow their use out of the account but exclude them from the deductible calculation (LASIK, IVF, etc.)
    3. The first two would allow us to eliminate the entire CPT and ICD 9 or 10 system! Let doctors, labs, radiology centers, etc. price their services the way they want and compete for services. Some doctors might charge by time, some might offer flat fees, We could get published rates for lipid panels and chest xrays (PA, lat, lat decub, whatever!)
    I have to attribute this idea partially to Tim Harford in his book “The Undercover Economist”, and many of you will have ways to fine tune it. Let the comments and criticism begin!

    • maribel

      In my humble opinion you’re spot on. You have to take into consideration people’s “if I ain’t paying for it I don’t care how much money is wasted” mentality which is encouraged by low deductible plans.

    • Alice

      d. Allow people to bequeath unspent money to heirs so they would think about whether that SNF to ICU transfer at the end of life is really worth it. [end quote]

      Alice: I would go back to catastrophic coverage as a last resort. Just because doctors are squeezed into coding and working with pain in the rear insurance companies isn’t enough to make me want to go back there. Doctors are profiting, insurance companies are profiting……….why go back to that type of coverage that kept people out of doctor’s offices. I like paying a copay. It is reasonable. I don’t see hospitals suffering, or their CIO’s, or the doctors. I don’t even see the uninsured suffering. I haven’t seen a reasonable argument for this type of backpedaling unless it was to make doctors lives better with less paperwork. Of course, younger doctors don’t realize the accounts that were sent to collectors back then, and the government is regulating so much you will probably be donating your time to the people as they tell you that you no longer have the right to refuse care even if the person owes you money (of course, maybe someday the uninsured will have a type of healthcare card that resembles the food stamp care……..I simply don’t know…I know what looks like a place we are heading that is highly bothersome). Then there is the option of governmental take over……..ugh! God forbid! And I know a segment keeps yelling it’s not socialized medicine……blah, blah, blah…….oh yeah!:)

      There are a few points here I don’t agree with the author on……hey………Paul Krugman the Nobel winning, liberal economist bugs me……but sometimes he is right (says naive Alice). Okay…….could you explain this part “d” above? I know about the Medicaid Recovery Act where patients who use the money owe it back from their estate……but I don’t think that’s what you are referring to. Could you expound?

      • anonymous

        The section d you quoted was taken directly from Tim Harford. The Undercover Economist really is a good book – written for the masses (I’ve never gotten myself to read Paul Krugman).
        Since we all know that many of the expensive procedures attempted near the end of life are also often futile, allowing people to give what is leftover in their HSAs to their heirs will make them look at the value of these end-of-life procedures. If (as another example) people think that the 4 additional months of life they can get from that “last ditch effort” round of chemo are worth the $5000, then they are free to spend it. If they would rather put the money into their children’s HSAs, they are free to do that too. Again, this is just one person’s (okay, maybe two people’s) pipe dream.

  • Finn

    Several comments: First, HSAs and/or high-deductible catastrophic illness plans may be terrific for the rich and upper middle class people who can afford them, but the working class cannot; they just don’t have enough money lying around or coming in to set aside thousands of dollars. Also, a recent study showed that people with high-deductible plans are more likely to delay seeking health care, so instead of encouraging people to take better care of themselves, such a scheme is likely to backfire and result in sicker, more disabled patients in the long run.

    Second, some of you seem to think that patients’ health problems are largely brought on by their own failures to take care of themselves, which will change when it costs them more out of pocket for health care. Tell that to the patient with type 1 diabetes or cancer induced by a genetic mutation. Not all our ills are self-inflicted, and the ones that aren’t are often the most expensive to treat on an individual basis. I think you’re looking at skyrocketing population-based health care costs (e.g., obesity, diabetes, cardiovascular disease, etc.) and proposing individually based solutions (e.g., HSAs, higher out-of-pocket costs for routine care) to bring them down. Such schemes seem unlikely to be effective in controlling costs but very likely to render health care unaffordable to some of the people who need it most.

    Third, consider what the notion of shopping around for the best price would mean in terms of fragmenting health care. It’s already hard for many PCPs to get adequate information back from specialists that their patients see; if patients start shopping around for nonspecialist care because that internist charges less for physical exams but this one is much cheaper for pelvic exams and Pap smears and that other one charges a lower fee to monitor diabetes, it’s likely that none of these docs is going to have enough information to take good care of the patient.

    Also, while I’m willing to shop around for cheaper pasta, envelopes, bank fees, etc., I am not willing to put my high cancer risk, cardiac arrhythmia, late effects of chemo, and osteoporosis in the hands of the lowest bidder. When seeking health care, my criterion isn’t price, it’s confidence in the ability of the doctor to provide good care. Not “the best,” not an MRI when an exam will do or a brand name when a generic is available, just good care at a price I can (barely) afford.

  • ninguem


    So much pontificating. So little experience.

    I have a HDHP and HSA for my own independent practice. I’ve had them from the moment they came out. I don’t think my nurse and receptionist qualify as upper class. I’m an independent FP.

    I can get a traditional insurance plan for all of them. Or I can get a group HDHP for far less. The savings gets turned over to fund the HSA for myself, and my employees.

    The total payment from my practice (HDHP and funding all the HSA’s) is actually cheaper than a group PPO plan with a low deductible. For this practice in this location, it’s a no-brainer.

    “Also, a recent study (which you don’t cite, but I suspect I know the one you’re talking about) showed that people with high-deductible plans are more likely to delay seeking health care……blah, blah…….”

    First of all. The plans will vary, but my HDHP is a standard Blue Shield PPO. Both my employees, and myself, are in THE SAME NETWORK as any other Blue Shield PPO insured in my area. The ONLY DIFFERENCE is the size of the deductible.

    First of all, as described, the deductible is funded, at least in my business. Second of all, the Blue Shield PPO happens to fund health maintenance work, well-women, mammograms, etc., first-dollar. So even someone who didn’t have the funded deductible would stil have coverage for health maintenance. It’s what I chose to get.

    And…..sigh……once again, no, you don’t have to shop around for one doctor for prostate tests and another doctor for the PAP. The issue is not the doctor, it’s the lab, the imaging center, etc. I’ve learned the hard way to avoid certain labs and imaging centers because of grossly inflated fees. Then again, if you are attending an employed doc in a big box place affiliated with a hospital, the doctor usually has no choice where to send if the doctor intends to stay employed.

    I’m independent, I can send patients wherever I want for imaging, and wherever I want to send labs. I’ve already done some price-shopping. Which is why the Obama Health Plan enthusiasts are so desperate to get rid of independent docs like me. You get so tired of the “experts”.

    Oh, and what’s the last one…..oh yeah, the old trope about shopping around for chemo, with the witticism that it’s going to the lowest bidder. Uh, no……it’s going in the Blue Shield network……..or Aetna, or whatever insurance you use for the HDHP. Which has, um, actually, already referred me to the lowest bidder. For some services, at least. In my state, every so often, there are battles with Blue Shield and certain hospitals or big medical groups, with threats of removing that medical group or that hospital from their network.

    Sometimes they carry out that threat. Then the TV commercials about how great our medical group is, or how great our hospital is, so make sure your insurance allows you to go to us.

    That would apply to any Blue Shield PPO. The only difference is the size of my deductible.

    The insurance I’ve offered is for my employees. I have not had family coverage for them. I pay my own family coverage as well. They can pay for their family, as can I. When I had traditional PPO’s, before HSA’s, there was no way they could afford adding family. Now I have HDHP’s, they can, and sometimes have, added the family members. One example, woman receptionist, husband is a tradesman, has an income but no affordable benefits. Now he has affordable HDHP coverage, and the individual HSA contribution is now part of the family coverage. If that person leaves my employ, any HSA savings is theirs. HSA savings can pay COBRA premium. They can use it to continue coverage. I’ve had many a patient caught between jobs, with no insurance for maybe two months, and is unlucky enough to get sick.
    “Why didn’t you COBRA your old coverage?”
    “Because it costs a fortune and I’m out of work.”
    Now they have a chance at continuing the coverage.

    Actually, in my own practice, we had a rough year, income was way down. It was nice to have the HSA savings. I could ride on that, pay my own HDHP, still offer the full benefit to employees. If I had had to pay traditional coverage, I might have had to drop it for myself AND my employees.

    But hey, what do I know. I’ve just had them for five years, paid the premiums for five years, shopped insurance for five years, for my family and my employees, for as long as they have had HSA’s.

    Is it perfect? Nothing is. Is it good for everyone? Probably not; although the ones who do worse, likely break even rather than lose.

    But it’s a heck of a lot better than the absolute monstrosity that’s come out of the White House.

  • imdoc

    Alice: ” I don’t even see the uninsured suffering…”

    You would if you were one of them. I can understand why many want to keep a system in place which provides high quality care with unlimited access to resources with only co-pays and employer provided insurance. Unfortunately, that leaves out a substantial portion of the population. Each of us is one job loss and major illness away from a desperate situation.
    A truly free market would work to the interests of the uninsured much more than the present system.

  • Alice

    Thank you for pointing out my incomplete sentence. In context I was talking about suffering from lack of medical care. The uninsured can get care…they may have to do a lot of legwork….and some will not. I am in the ghetto a lot…so I understand their suffering…but there is help. At first
    I went to the ghetto to teach my children diversity. I was terrified…my teens were not. I have lost my fear and got to know the moms on a personal basis. I like their raw honesty. I have come to the point that the people who use the supposed uninsured dying and proclaim universal care is the answer do almost nothing for the poor unless they are compensated or just use them as an excuse to proclaim themselves so good…and you so bad.

    I didn’t explain that well….so it’s great I can explain that all the bleeding hearts get out of the mall and go and do something for the poor beyond lip service. As far as suffering I stand by the original contention that help is available but you need to ask…then maybe ask again, and again…because even if you want home care you are going to have to ask and get established.

  • hc_consult

    Here’s a thought experiment — why can’t a PCP adopt Emily’s model and charge an annual fee to enroll patients, then not bill for visits but only for procedures? You could even capitate the procedures if you had enough volume (enough other providers in your practice), and capitate the tests too. & prescriptions?

    It’s an incentive thing: if physicians shared the risk with their patients for compliance, prevention, etc., in exchange for a billing-free guaranteed income; if physicians had to “pay” for each test that was ordered, would care look different? What if this was all hooked together via a physician group and the local hospital in an “accountable care organization”? Couple with HSAs and the risk-bearing is now shared, preventive care is “free” on the margin, & insurers are out of the day-to-day interaction.

    • anonymous

      In your thought experiment, what is the role of HSAs? If visits and labs are already covered by the annual fee, what would patients use HSAs to pay for?
      I assume patients would still have their high deductible plans for the catastrophic events; I hope you don’t think a small annual fee paid to an individual physician should cover hospitalization if outpatient therapies fail for a noncompliant patient and he ends up requiring hospitalization.
      Which brings me to a first unintended consequence: what is to stop a physician from firing (or just not accepting) patients who are noncompliant, high maintenance, or otherwise financially undesirable? Yes, I know we should be above that, but this was the main fear with quality reporting initiatives.

  • Alice

    firing (or just not accepting) patients who are noncompliant, high maintenance, or otherwise financially undesirable? Yes, I know we should be above that, but this was the main fear with quality reporting initiatives by anonymous[end quote]

    I thought Dr. Groopman wrote about this already happening? To get on the best rated doctors list you only take patients who will give you a good rating for success. A bad doctor could get a “D”, or a great doctor who takes chances the same grade.

    This will be the downfall of outcome based medicine that focuses on outcomes. Although, it may, ultimately, help?

  • imdoc


    You must not have seen the news segment of the doctor on the east coast who tried what you propose. The insurance commissioner shut it down as it was deemed an unregistered insurance plan.

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