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Times have been tough for primary care – especially those who are in private practice. The main reason for this is the poor reimbursement given to the main procedures done by PCP’s. It is far more profitable to remove a tumor than to prevent one. The doctor who determines that colon cancer screening is appropriate, discusses this with the patient, and schedules the colonoscopy is paid very little compared to the physician who does the colonoscopy. Plus, the insurance companies are able to “divide and conquer” by negotiating the payment schedule with each group separately. The law prohibits physicians from disclosing to each other their negotiated fee schedules.
So when the opportunity to turn the tables arises, we jump at the opportunity. One such opportunity came up when I first started practicing in this city. The outcome was not just positive; it was amazing. I was invited into the situation – and knew very little about the physician/insurer relationship. That would change.
One of the insurance plans in our area was languishing. Very few physicians were under contract with them, and very few employers were signing up for the plan, meaning that their market share was very small. So they teamed up with a group of primary care physicians to improve their product. This group of physicians formed an IPA – an Independent Physician’s Association – which allowed them to negotiate as a group, rather than as individual providers. The laws that prohibit sharing fee schedules are circumvented in this group as it lets a third party do the negotiations with the insurance companies and then come to each group individually (this is called the “messenger model”). Each physician puts money into the IPA to pay for those who do the negotiation.
Things went extremely well. The insurance plan quickly became one of the largest plans in the area – most likely due to the fact that the majority of the primary care physicians in the area were on the plan – as the rate negotiated was very attractive. The agreement with the insurance company was such that the IPA owned 50% of the insurance plan – and thus shared in the profits. As long as the plan stayed profitable, the IPA owners were bonused by the insurance company for a percent of the profits. The only way out of the agreement was if the plan started losing money – and things were going so well, it seemed this wouldn’t happen any time soon.
Or so we thought.
At each meeting of the IPA we would get a bonus check and hear how well the plan was doing. It was now the most popular plan in the area by far. But as time wore on, the administrators of the IPA reported that the insurance company was singing a different tune. We were told that the plan was now barely breaking even – and even losing money. We were beginning to see the writing on the wall – the insurance company didn’t want physicians as partners and so was reporting a loss. This didn’t make sense, as the plan was an incredible success in the community. Still, what we saw of the books (what we had access to) did seen to show a decrease in profits, and even a loss. We knew something wasn’t being disclosed, but couldn’t get access to the information.
The day finally arrived when the insurance company formally dissolved the agreement between themselves and the IPA. It seemed as if the bad guys had won. We had been the driving force to take a failing plan and make it the dominant plan in the area, yet we were going to lose control of it. It didn’t seem right. Something was up.
But the story wasn’t over. The administration of our IPA had an idea on how to uncover the truth. One of the areas of known revenue for insurance companies is from rebates gotten by including certain drugs on the plan’s formulary. If the plan has a certain number of prescriptions of a certain drug, the drug company pays a “rebate” to the insurance company. This isn’t really a rebate, as it is not money returned to someone who had paid, but instead a bonus that was negotiated up front – one that often determines whether or not a drug is put on the formulary in the first place. The drug companies don’t like these “rebates” as it forces them to compete for formulary inclusion based on the money they give, and not the merit of the drug. If you think this sounds like bribery, you see it as we saw it. But this bribe was done under the table so we couldn’t see it.
Our administration thought that we should be able to look at the rebate money, as many of the criteria used for this revenue for the plan was driven by physician behavior. We prescribed the drugs, and our prescribing caused there to be increased revenue for the plan. Yet our insurance company “partner” did not see it that way. They saw the drug benefit as entirely separate, and would not disclose to us the revenue from this source, nor would they include it on the calculation as to whether or not the plan was profitable.
We took it to court. Our attorneys argued that the insurance companies were not being truthful to us about the profitability of the plan because of the omission of the rebates. The judge agreed with us, ruling that the insurance company had to disclose to us the profits from these “rebates.” It wasn’t long until the lawyers from the insurance companies made us a settlement offer we could not refuse. They retained full control of the insurance plan, but we kept the favorable fee schedule and were awarded a substantial cash settlement.
The moral of the story is that physicians banding together can do much good. Medicine has been a classic case of united we stand, divided we fall. Primary care is a scarce commodity, and it only figures that scarcity increases value. Banding together, primary care physicians can wield much more power than they think. People won’t join plans without good primary care. Insurance companies make more money off of colonoscopies than they do office visits, but they make no money at all if people don’t sign up for the plan. The key to success is to work as a group. Be ready to walk away from a bad offer – even if it means that you will lose patients. Being willing to refuse bad payment will greatly enhance your ability to force better pay. It’s obvious that PCP pay is not going to break their bank. The reason we have been under their thumb has been our inability to act together.
See? Sometimes the good guys do win.
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{ 4 comments }
Good for you!
I’m sputtering! Mostly because I have difficulty deciding where to begin.
First, you describe the rebates as bribes, then you go on to say that you were able to get the court to grant you a portion of the bribes. What kind of practice is it that prescribes certain drugs in order for the physician to receive “bonuses” at the end of the year? How is not a conflict of interest?
Second, the antitrust rulings that prevent physicians from banding together to fix their fees do not prevent physicians form banding together to discuss and recognize the dangers of signing onto contracts with any group, whether it be an insurance company, a physician group, of the government.
Third, are your patients better off now that you have a physician group that fights for themselves? Wouldn’t your patients have better access for a lower fee if they did not have to pay for the IPA administration, follow a formulary, and get permission to receive specialty and hospital care? How about a simple doctor-patient relationship without any third parties?
Fourth, don’t get caught up in the concept of division of physicians that you decry by complaining about the differences in payment for the different services.
Incidentally, I thought your post about Martin Luther was very good.
Let me respond:
First off, the whole problem was that the insurance company was lying to us about the plan taking a loss. They were actually doing quite well (once we looked into their books). None of us thought the practice of rebates was at all ethical, but we did think it was strange that they would think we had no right to see their profits from it.
Second – we don’t fix our fees. This is called a messenger model – meaning we have a single negotiator who deals with us all separately. It seems strange to me that doctors would potentially fix prices while muffler shops don’t. The whole antitrust argument is a different post altogether, but many of the problems in healthcare owe to the hidden nature of costs. Calls for “transparency” in pricing of healthcare are squashed by Stark laws.
Third – Yes. If we did not have this recourse, we would have no way to balance the power of the insurers. PCP’s would simply go out of business or drop insurance altogether. The purpose of the third party (that is paid for entirely by the physicians, by the way), is to advocate for the physicians. Unchecked, the insurance industry will do nothing but raise cost. They are not healthcare providers. Their job is to profit off of healthcare.
Fourth – Please note that this post focused on PCP’s. Cardiologists and procedural physicians have hospitals to advocate for them. PCP’s have nobody but themselves.
Medicine is a business. I can’t take care of anybody if I can’t meet operating expenses. This is the whole issue of primary care and why any small movements to reduce payment would end up destroying primary care.
Thanks on the ML compliment.
So, You Want To Be A Doctor…..
In recent times, others have said and appear to express concern about the apparent shortage of primary care doctors in particular- both now and in the speculated future. Typically, the main reason believed and speculated by others for this decline of this health care profession specialty that historically has been the apex of our health care system is lack of pay of this specialty when compared with other specialties chosen by potential physicians while in training, as it has been reported that PCPs, along with Pediatricians, have an annual salary below 150 thousand dollars a year often.
Viewed as one with great esteem and respect historically, a career as a PCP doctor may not be desired as a vocation by many that demands such admirable commitment and dedication, as reflected in their training regimen in the U.S. that consumes about a third of their lifespan. Such reasons for this paradigm shift may include:
Primary Care Doctors perhaps more than other physician specialties, seem to be choosing to practice medicine under the direction and financial security of one of the many and newly created health care systems in the United States. These regional and nationally created systems are typically composed of numerous hospitals and clinics under combined ownership- frequently of a profitable nature that is not dependent upon their beliefs as it is perhaps on their organizational motives and intentions. Yet their approach and etiology of their views regarding the restoration of the health of others are usually similar with such mergers of multiple medical facilities.
This monopolizing business model of these health care systems of increasing popularity is not necessarily a desired method to practice medicine as a primary care physician. Often, these systems employ their powers by limiting as well as dictating how their health care providers practice medicine. This is further aggravated by possible and clearly unreasonable expectations of their health care system employer, such as mandating that doctors they employ are required to see as many patients as they can in a day, and there have been cases of physicians being fired by a health care system. Conversely, there are instances where health care providers receive financial rewards for seeing more patients a day than what is determined as average visits by the organization. Such requirements likely and potentially affect or alter the clinical judgment determined by physicians employed in what may be viewed as rather authoritarian employers that potentially limit the medical care their employees provide to their patients, and the quality of this care.
Also, such health care systems may have their own managed health care sub-organization which may be determined by factors not in the best interest of the patients of doctors employed by the health care system to ‘control costs’.
The primary etiology and stimulus for a doctor to practice medicine in this way is due to their frequent inability to provide and employ ancillary staff in a private practice setting. This is also combined with the increasing premiums for their mandatory malpractice insurance, which may make doctors financially unable to work independently.
Malpractice laws and premiums, which are determined in large part on a state level, are an issue with those required to have this adverse aspect of their professions. Also, these premiums become more expensive for doctors as it relates to their chosen specialty as a health care provider. For example, the premiums of an OB/GYN doctor are usually higher than one of a specialty viewed less risky for lawsuits, such as Dermatology, perhaps. With malpractice cases that are initiated, plantiffs win about 25 percent of the time on average a half a million dollars. 95 percent of these cases are settled out of court, it has been said.
In addition, the issue of medical malpractice is also frequently a catalyst for a doctor to practice what has been called defensive medicine. This basically means that the health care provider is prohibited from relying upon their subjective factors in their assessment of their patients, which in itself raises the question of what the point was of all of their training in the first place. Because if a doctor practices medicine in such a way with defensive medicine, it typically involves what may be considered as unnecessary diagnostic testing for their patients to rule out what may be unlikely disease states of their patients’ medical conditions. This waste of medical resources is further validated by the legality reflected in the tone of the notes a doctor usually annotates or dictates with their patients. So one could speculate that over-treatment is as common as under-treatment of patients in today’s health care system.
Such restrictions and limitations imposed on today’s primary health care provider are usually not fully illustrated during their training for this profession, which is one that has been viewed as one that is quite noble and of great responsibility on a societal level. This may be why this medical profession may no longer be viewed as distinct from other vocations as it once was. In large part, it seems that presently the profession of a doctor has been reduced to one dependent on the financial stability and growth of its employer, which may alter how the doctors perceive what is expected of them as well, which may affect the importance of how they view their profession, as it has been said that overall, doctors are somewhat understandably more cynical and demoralized, which may be replacing the pride they historically have viewed their callings as doctors, as well as the perceptions of patients in the U.S. Health Care System.
Further complicating and vexing to these restrictions is the usual financial state of the individual physician, as they normally have to pay off the debt acquired from attending medical school and training, which averages well over 100,000 dollars today after their training is completed, it has been estimated, along with this debt amount presently is about 5 times higher than it was only a few decades ago.
Conversely, there are some who believe that doctors in the U.S. are over-paid and are compared with some corporate monster, who behaves based upon the premise of greed. In spite of how they are judged, physicians are likely not absent of financial concerns as with many others- which may be of more of an issue than many other professions, comparatively speaking, in addition of taking on more responsibility that is of greater importance compared with other vocations. Such realistic variables should be factored in when one chooses to judge the profession of a physician. On the other hand, no physician should view their jobs as no different from any other venture capitalist when rationalizing their income and motives related to this exceptional vocation as a physician, as others are more dependent on their judgment.
It has been determined by others, and suggested often and lately, that many of today’s physicians practicing medicine in the United State do not recommend or speak favorably of their professions compared with their typical views of their profession in the not so distant past. While this self-perception physicians may have of a negative nature may be somewhat understandable it is also and potentially unfortunate for the health of the public in the future, and the nature normally associated with the medical profession which could deter ideal medical care for others.
There have been cases where doctors do in fact change careers, and get into vocational fields such as medical communications or corporate medical companies. Also, expert witnessing is another consideration for those who choose to leave their profession. Finally, other choices considered include consulting and research. The training of doctors fortunately leaves them with options not involved directly with the flaws of medical care, but this is bad for us as citizens, overall. The etiology of their departure from their designed profession is largely due to the negative state perceived by themselves as well as others of their profession as medical doctors.
Then again, not all doctors are deities. Like others, some are greedy and corrupt, which complicates others in this profession in relation to how their vocation is viewed by others and based on limited judgment and analysis. Yet citizens overall should determine what sort of health care they desire, and it seems that often they fail to voice this right as a citizen.
For perhaps Primary Care Physicians in particular, the medical profession and those who provide medical care clearly needed by others to some degree appears to be absent as a desired path of today’s careerist if it is sensed that doctors are uderstandably a bit demoralized these days. The authentic reasons for what many believe to be a negative perception of possibly the entire health care system may never be known, yet many would agree that most U.S. citizens are understandably concerned with the state of this system of great importance to society. Yet the public needs to be more active more in assuring this necessity is more aseptic.
“In nothing do men more nearly approach the Gods then in giving health to men.” — Cicero
Dan Abshear (ex-military medic and physician assistant for nearly 20 years)
Author’s note: What has been written has been based upon information and belief of a layperson, yet also the assessments of a patient.
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