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All items for August, 2007


Can Employers And Patients Trust Healthcare Insurance Companies Part 1

Stanley Feld M.D.,FACP,MACE

I received several comments in recent weeks highlighting the hardships employers face trying to provide healthcare insurance to their employees. Employers, and individuals who want to buy individual insurance have been deceived by the healthcare insurance industry. Many associations subcontract healthcare insurance companies to provide healthcare insurance for the association membership. However, the healthcare insurance is expensive and deceptively limited. People think they are covered until they get sick and discover they are not.

The simple answer is the ideal medical savings accounts with high deductible insurance available to all after all the conditions for the ideal healthcare systems are met.

The healthcare insurance industry and congress have blocked the ideal medical savings account concept for years. Why has congress been so stubborn? MSAs were introduced by the Golden Rule insurance company at least a decade ago. Congress has been influenced by healthcare insurance industry lobbying to block the concept of individuals owning their healthcare dollar and also receive a pretax dollar tax exemption for buying their own healthcare insurance policy. I also do not believe that many of the members of congress want to understand the power and intelligence of the consumer.

In my naïve younger days, I simply could not understand why congress would be opposed to such a logical plan. It would eliminate 150 billion dollars of administrative waste in the healthcare system. My problem was I was not aware of the excessive influence the healthcare insurance industries lobbying groups have on congress.

Lobbying groups in general wield more influence than the will of the people in the daily activities of government simply because they have more money and are more focused than the individual. Previously, I spent a lot of time on TXU’s desired to pollute Texas even further with “Dirty Coal Plants”
and the subsequent acquisition of TXU by KKR with KKR’s promise to discontinue the pursuit of dirty coal plant permits.

This past week it was published that TXU and KKR spent $17 million dollars just to get its merger passed and work its way toward building dirty coal plants in Texas. Imagine how much the healthcare insurance industry pays lobbyists.

It is a true goliath against a weak and divided foe, namely patients (the consumer). Consumers do not get activated unless they are affected. Only then to they want to do something to solve the problem. The problem is only 20% of consumers are sick at any one time. We do not anticipate that we could be affected any day now.

It took the healthcare insurance industry four years and many millions of dollars to have firms like Cooper Lybrand and Price Waterhouse develop schemes that would counter the potential effectiveness of the Ideal Medical Savings Account. They developed the concept of the Health Savings Account. The HSA kept the premium dollar in the control of the healthcare insurance companies. The healthcare dollar does not belong to the patient. The healthcare insurance industry robbed patients, physicians and hospitals of incentives to be innovative in order to repair the healthcare system by being competitive.

United Healthcare bought the Golden Rule Insurance Company. It immediately destroyed Golden Rule’s medical saving account product. UnitedHealthcare has converted Golden Rule’s MSA to an HSA. I cannot understand why the health policy experts who advocated MSAs are satisfied for the now. Their argument is this is compromise. It is a step in the right direction.

To paraphrase the great German philosopher Fredrick Hegel “An ineffective step in the right direction is worse than no step at all. If the ineffective step fails then you will never created the correct concept.”

I will add, especially if the step in the right direction is a purposeful step in the wrong direction. HSAs are destined to fail, in my view, because they do not put the consumer in charge of his healthcare dollar.

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Can Physicians Trust the Healthcare Insurance Industry?

Stanley Feld M.D. FACP, MACE

We have established that physician fees are not the cause of the soaring healthcare costs. We have not looked at how the healthcare insurance industry tortures physicians with its adjudication of their insurance claims. MILT FREUDENHEIM in The Check Is Not In The Mail accurately describes the physician’s pain in receiving reimbursement from the healthcare insurance industry.

Every physician has experienced delays in payments as well as missed payments. Many physicians’ practices do not have the best accounting systems in the world. The practice management systems can easily overlook non-reimbursed claims for months or forever. Many physicians’ practices have outsourced their billing functions because it is too expensive and inefficient to do it in the office. This has lead to more problems and higher costs. The non–payment of claims leads to greater profits for the healthcare insurance company.

Does the fee charged by the physician get added into next year’s insurance premium charged to the employer buying the insurance for the employee? Does the insurance company credit its profits from the float toward the next year’s premium from its delayed payments? My guess is no.

Physicians pay $6,000 to 20,000 per year per physician just to file and administer insurance claims. They lose countless numbers of dollars from non-payment of claims. The lose countless numbers of dollars from miscoding claims. They loss countless numbers of dollars from the healthcare insurance company’s scrubbing of healthcare claims. There are entire subdivisions in healthcare insurance companies that scrub claims. A simple explanation of claim scrubbing is, if the diagnosis on the claim does not support the procedure, the procedure is eliminated from the claim in calculating the reimbursement to the physician even if the claim is justified medically. Many times the EOB (explanation of benefits) meaning is so opaque that one cannot tell what has been scrubbed out of the reimbursement. A physician’s office can call the insurance company and try to get an answer. However, it is difficult, time consuming, costly and often unsuccessful. Many times I believe it is purposeful on the part of the healthcare insurance company. I believe the goal is to delay payment as long as possible.

Another trick used by the insurance company is to say it never received the claim. Typically, the physician’s office waits a few months until it discovers the claim has not been paid. Then the physician’s office contacts the insurance company. The process of resubmitting the claim and getting paid takes at least another 30 to 60 days. This purposeful inefficiency takes place despite electronic billing.

“Few things rankle a doctor more than an insurance company’s saying it cannot find a claim for medical services. Particularly when there is even a signed return receipt to document delivery of the bill.”
“We actually had the little green card to show who signed for the dang thing,” said Elizabeth Wertz, chief executive of the Pediatric Alliance, a large group of Pittsburgh doctors. “We sent it by certified mail. The insurance company said they didn’t have it.”

The insurance industry is playing to the physicians’ weakness to increase the profit from the float.

“The claim was for several thousand dollars, according to Ms. Wertz, who declined to identify the company, a large regional insurer, for fear of making it more difficult to wrangle payments from the insurance company.”
“ It is a problem known to many doctors as they struggle to balance the rising cost of providing patient care with what they see as reluctance by some powerful insurers to pay promptly.”
“Tardiness or refusal to pay what doctors consider legitimate medical claims may add as much as 15 to 20 percent in overhead costs for physicians, forcing them to pursue those claims or pass along the costs to other patients, according to Jack Lewin, a family doctor who is chief executive of the California Medical Association, a professional group of 35,000 physicians.”

I am aware of a practice in California in which the insurance carrier is 1 year behind in payment and owes the practice $400,000.

How can the healthcare system stop this destructive pattern and dysfunctional behavior? If the patient owned his healthcare dollar, and knew the price he was going to be charged was the price the insurance company negotiated with the physician, the patient could pay at the point of service decreasing the physicians overhead by 15 to 20%. The saving could be passed on to the patient in the form of a reduced fee. The fee reduction would happen only in a competitive environment. I believe physicians would agree to this simply to relieve them of all the stress and costs of collections.

The float is between 29 and 44 days depending on the carrier. Athenahealth a claims-processing company, has published a rare warts-and-all look at how well — or not — the nation’s seven biggest health insurers pay their bills. Athenahealth measured many parameters such as days in account receivable, percentage of claims successfully resolved on initial submission, % of patient liability, denial rate and denial transparency to name of few. The Athenahealth results give us an idea of the unconscionable behavior of the healthcare insurance industry. The tactic plays to the weakness of physicians’ practices and take advantage of both the physician and the patient.

Ms. Wertz, the Pediatric Alliance’s chief executive, says some insurers’ telephone call centers limit claims-related issues to 10 per call. “That’s incredibly inefficient,” she said. “We see thousands of patients. Our people have to sit on phone 30 minutes to get a live person.”

Athenahealth’s other measurements included the percentage of claims paid without changes within 90 days. Medicare came in first, at 92 percent. Champus/Tricare was last, at 85.1 percent.

It should be clear that the way around this waste and abuse is with an Ideal Medical Savings Account. It would motivate the patient to shop for a doctor, and to shop for a good insurance company. The insurance companies would compete on price and quality of product. We have seen the same apathy for reform in American automotive companies until the Japanese gave the American consumer a choice. Now they are trying to catch up.

Who would lose? The slow to reform healthcare insurance company who has abused the healthcare system for many years? Do you think it wants to give up the power it has over physicians and patients? The only way to stop it is with appropriate government regulation, giving patients the power to own their healthcare dollar and total price transparency. It is going to require political leadership that can only be stimulated by consumer demand. Consumer demand will result from understanding the dysfunctional elements of the healthcare system.

  • MT

    Thanks for the link to Athenahealth’s study. It was informative.



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Summer of ‘47

Stanley Feld M.D., FACP,MACE You will recall in Jake the Pickle Man I started to tell stories of my past on the advice of my son Brad. This blog is dedicated to Phil Rizzuto. This is my story of my Summer of ’47. 1947 was a great year for both the New York Yankees and the New York Giants. It was also a great year for the Bronx Redwings baseball team. I was starting first baseman because I was the only lefty on the team. We lived in the Bronx on Mount Eden Avenue, fourteen blocks from Yankee Stadium on 161st St. and nineteen blocks for the Polo Grounds on 155th St. None of my teammates’ families could afford to send us to summer camp so we figure out how to entertain ourselves while increasing our baseball skills. We all met at Geller’s Candy Store at promptly 8 am each morning. Some of us got there a little early. We thumbed through Mr. Geller’s New York Daily News. Next, we went to the baseball field in Claremont Park to practice until 11:30 a.m. We did not have a coach so we had to improve our skills by watching and imitating major league ballplayers. At 11:30 we all went into our respective apartment buildings for lunch. We met at Geller’s at 12:15 p.m. When the New York Yankees were in town we wore Yankee hats. When the New York Giants were in town we wore Giant hats. We walked to the Mt Eden Avenue Subway station IND (Number 4) when the Yankees were in town, paid a nickel to get into the subway and got a free transfer for the 161st St. to 155th St. shuttle. We got off the subway at Yankee Stadium on 161st Street. We stood outside the box seat entrance and invariably would be taken into the stadium by some business men in suits, ties and fedoras. We were cute kids and they looked respectable. After a Yankee game, we used the subway transfer to ride the shuttle over to 155th St. We took the IRT (B train) back to Jerome Avenue and 174th St. When the New York Giants were in town we took the Jerome Avenue IRT(B train) subway to 155th St. and got off at the Polo Grounds. We stood outside the box seat with our New York Giants hat on and again we were taken into the stadium by businessmen who had extra tickets for some cute looking kids. We repeated the routine going home, taking the shuttle to 161st St. and then the IND (4) to Mount Eden Avenue. The business men taught us a lot about baseball as did our powers of observation. The experience was our substitute coach. We would discuss the game, the pitchers and the strategies used on the way home after each game. We saw almost every weekday game in the Summer of ‘47. The games started at 1:05 p.m. and were always over by between 3:30 and 4:05 p.m. We always beat the rush hour on the subway. Our mothers’ had supper for us at 5:30. We were out on the baseball field by 6:30 to practice what we learned that day. The Summer of ’47 was a great summer for me and my teammates. We learned the beauty of the game of baseball in the most fabulous environment in the world. Cost was about $3.00 for the subway the entire summer. The value of the experience was priceless. Think about it. Would you let your kids do this in Bronx today? People do not even let their kids walk to school by themselves. Would you let a stranger take you child to a baseball game? Would you let him in a public park by himself to play baseball for six hours a day? Unfortunately, some things have changed in America. We now know the price of everything and the value of nothing. This is also true of our healthcare system. We are driving the humanity out of the healthcare system and destroying the physician patient relationship. It has to stop and the patients and future patients are the only ones who can stop the trend.

  • Parkite

    I was fortunate enough to have similar experiences in the summer. Baseball all day, everyday. Rode my bike everywhere. The sad thing is my kids will never experience this kind of freedom due to the danger that exists in society today. I guess that is the price we pay here in America.

  • jetlag11

    I’m from Washington Heights. Our family was divided; my brother and dad were Giants fans but I lived and died (and still do) with the Yankees. 47 was a great year. They used to win their games at 5PM, often with old reliable #15 leading the way (Tommy Henrichs).
    By the way, thanks for bringing the shuttle back. However, you have the transit lines reversed. The Jerome Avenue line (which wasn’t numbered back then) and the shuttle were IRT, and the B train was the BB and IND. On the IND, you could take the CC or the D to the Stadium, and the AA or BB to the Polo Grounds.
    I think you also have the physician-patient bit wrong, too. When the physician was the father figure, he could – mostly figuratively – get away with murder.

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Do Doctor’s Get Paid Too Much? Part 3

Stanley Feld M.D.,FACP,MACE

I feel compelled to dwell on Alex Berenson’s article Sending Back the Doctor’s Bill because it is wrong and distracts from the main problems with the healthcare system. In fact, I find it an insult to our intelligence. I want to include some of the demoralizing examples that are widespread among the physician community. I will start by quoting Dr. Uwe Reinhardt.

“The low lying fruit in cost-containment (ie. physician reimbursement) was strip mined by the HMO movement and Medicare over 15 years ago. There is wide-spread disenchantment and lack of job satisfaction among physicians that threatens to split wide open over further aggressive pay cuts. You don’t have to be a Nobel prize winning economist to understand the inevitable brain drain and service problems you’d create.”

If you review my blog entries on how this all started in the 1980’s you will understand how the easiest stakeholder to attack were physicians.
They are disorganized, individualistic, and political when necessary, and very competitive with each other. In fact, most of the competition has been directed toward and against each other in their local communities. When they perceived that their medical organizations did not represent their interests they walked with their feet and dues, weakening major organizations, that potentially could have aborted the mess our healthcare system is in.

It was very easy for the insurance industry to dominate the practice of medicine. They started dominating the access to care and the price of care. It is only a matter of time before the entire healthcare system implodes because of the insurance industry’s arrogance and greed.

Some physicians have just walked away from their medical practice as conditions worsen and the physician shortage increases. Below is the story of a much beloved physician in Summit County Colorado who practiced there for 25 years. He was at one point chief of staff at the hospital and has served on the Frisco Town council.

Throughout the past 25 years, he’s delivered more than 300 babies, handled countless emergencies, practiced family medicine and conducted altitude research. But soon, he will be moving on.

And even though he loves living in Frisco and will always call it home, in recent years insurance companies have become hard to deal with, making private practice increasingly difficult, he said.

“It makes the financial side impossible,” Bachman added. As a result, working for a company where he will not have to deal with that aspect of the business appealed to him.

He said he feels bad about leaving is patients, but knows he is leaving them in capable hands.

“I’ve always enjoyed the quality of the medical care in the community,” he said.

Sid Schwab M.D. a surgeon nearing retirement said...

“I saw Dr. Reinhardt’s letter (in the New York Times), too. What’s depressing — in addition to everything else in the world — is the misconception people seem to have about what doctors (surgeons especially) do. Hey, cut their pay, put ’em on a salary, or (as one recent commentary suggested) hire a bunch of doctor/moms who’ll be glad to fill in the gaps with part-time work, flood the market –problem solved!”

Snafu Suz a cancer survivor said.

“The American health crisis is many-fold (is that a word? anyway…). There is not one answer to the problem. The whole thing needs a serious overhaul. I agree that cutting doctor’s salaries will hardly help and yes, it will demoralize our health professionals which is NOT a good thing. Personally I have a huge beef with insurance companies and think that would be a better place to start. Health care should not be a for-profit business. Doctors need to be paid just like everyone else, but insurance companies don’t need to be running the show. Maybe we should start there? Maybe we should start with campaign reform so that our politicians are not for sale to drug and insurance companies? Maybe we should start with making higher education universal so that doctors and other professionals don’t have to carry such astronomical debt? Maybe individuals shouldn’t be running to their lawyers hot to sue for things that are unproven? (The silicone implant fiasco comes to mind.) As I said, this problem has many aspects and there is a lot of corruption. Doctor’s salaries are not one of them. The guy who wrote that article is smoking crack. (Alex Berenson)


I could go on forever but I think you get the point. We are all in search of the truth. We are all in search of the best way to Repair the Healthcare System. Mr. Berenson’s solution is not the way to repair the healthcare system.

  • Mr. Berenson's Overpaid Physician

    The following is based on a letter I occasionally send to patients of Mr. Berenson’s ilk:
    Dear Mr. Berenson:
    Over the past few years several patients, like you, have asked me “Why is my medical bill so high?”. It is a very good question that needs to be answered in the context of our current health care system.
    When I was growing up and went to my family doctor, my parents or I paid around $10 for a typical minor problem visit (in 1966). With inflation, that would be around $62 today (in 2006 dollars) ( Today Medicare reimburses me approximately $33 to $45 for a similar patient visit. When I was a teenager the overhead costs of my physician’s medical practice were low. My family doctor did not make appointments and thus did not need a receptionist. When you were sick you simply went to his office and waited your turn to be seen. If it was a busy day with lots of patients, I sometimes waited several hours before I was seen. He did not employ nurses nor did he have a transcriptionist (typist) write his notes. He worked by himself, but did have a part-time bookkeeper. He called me back from the waiting room, evaluated me and usually jotted down a sentence or two and that was it. I paid cash at the conclusion of the visit. He did not deal with insurance companies so he had very few phone calls and paperwork to deal with. He did not have high malpractice costs and he worked from his home office.
    Over the past few decades, things have changed radically. The overhead costs for a physician are astronomical compared to the good old days of my family doctor.
    My overhead costs are many. I pay the equivalent of 5 full-time employees: 1 ¾ transcriptionists/receptionists, 1 office manager/receptionist and 2 ¼ registered nurses. I need a receptionist to make and change appointments, call and remind patients of their appointments, collect co-pays and to answer phone call questions. I need a transcriptionist to thoroughly document all that I do, as insurance companies periodically audit my work to see if my billing level is justified by the work I have performed. The transcriptionist also makes copies of patient records and types letters that I send to other doctors regarding their patients that I see. I need a manager to oversee the scheduling, billing, and other operational activities. My office manger spends much of her time tracking down payments owed to us from insurance companies and answering billing questions from patients. I need nurses to help with patient care. The nurses also answer phone questions, call patients with lab test results, deal with getting approval for medications from insurance companies, educate patients, and engage in other patient care-related activities.
    I have medical licensing fees and ever increasing medical malpractice fees, even though I have never been sued. Medical equipment and supply costs, and building, utility and additional insurance fees add to my overhead costs.
    Dealing with insurance companies adds other costs, including payments to a billing service that electronically processes and mails my bills, that cost thousands of dollars a year. It is unfortunate that insurance companies do not pay my practice for the extra work and hassle factors they create for my patients and me. When dealing with insurance companies I am at the mercy of their fee schedule. I document what I do, and I accept what they pay. If I feel that they are cheating me, or my patient, I will write a letter of protest to contest any denial of payment. Some insurance companies pay better than others. Some insurance companies are sensitive to the high cost of providing medical care today and some are not. A given insurance company may pay well for some services but poorly for others. There is one health insurance that I no longer accept because it paid too little and caused too many aggravations.
    I provide free telephone advice to patients, and to physicians who call me with questions on patients I have never seen. I provide free care to charity cases and sometimes receive no payment from patients who can afford to pay me for my services (at a loss), including late night or weekend consultations at the hospital emergency room.
    All the costs of running my medical practice, including the services provided by the transcriptionist, receptionists, office manger and nurses are paid for from the fees I collect for the services that I provide. When you receive a bill from me, it is important that you understand that only a portion of the bill actually pays me for my time, the rest goes to cover my overhead expenses of practicing medicine in today’s complicated health care system.
    Occasionally there is a patient who is uninsured, or under-insured, who does not have the financial means of making payment for the services I have provided. If you feel you are such a patient, please call my office; explain your circumstances and we will work out a reduced payment plan that will help you.
    Your Physician

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Do Doctor’s Get Paid Too Much? Part 2

Stanley Feld M.D.,FACP,MACE

Alex Berenson’s article “Sending Back the Doctor’s Bill” in the July 27,2007 NYTimes demonstrates the problems the mass media is having in a world of changing communication. Unfortunately, articles such as Mr. Berenson distort and misrepresent the facts.

Mr. Berenson says “Americans generally do not seem to mind the fact that doctors are well paid. In public opinion surveys, doctors usually rank as the most trusted professionals. Congress has repeatedly blocked Medicare’s efforts to reduce the amount it pays for each procedure doctors perform, even though overall Medicare payments to doctors are soaring and the cuts are legally required to keep the program’s budget balanced.”

It is important to study Mr. Berenson’s words carefully. He says “doctors usually rank as the most trusted professionals.” I believe that is true and is deserved. However, he and others are doing their best to destroy that public trust. The trust between a patient and physician (patient/physician relationship) is part of the therapeutic effect. Effective medical care is not a commodity. The therapeutic effect has a personal component that is being destroyed by our present environment.

Mr. Berenson implies that the government must “reduce the amount it pays for each procedure doctors perform.” He ignores the fact that the hospital charge for a procedure done in the hospital is greater than the physician charge to do the procedure. The hospital’s reimbursement is greater than the physician’s reimbursement for his skill and intellectual property. Recall the insurance company paid the hospital twice as much as they would have paid Dr. Westbrock if he was allowed to do the same x-ray.

Mr. Berenson’s last sentence is a warning. It should alert us to what we are in for with universal coverage, and single party payer system. It is socialized medicine.“Congress has repeatedly blocked Medicare’s efforts to reduce the amount it pays for each procedure doctors perform,” This is not true. Congress has decreased the percentage of reimbursement reductions sort by Medicare. Significant physician fee reductions have occurred yearly.

Mr. Berenson goes on to say “even though overall Medicare payments to doctors are soaring and the cuts are legally required to keep the program’s budget balanced.” Physician reimbursement has not been soaring. It has been declining. Hospital costs and administrative payments to the insurance industry have soared. The last phrase portends what we have in store for us with socialized medicine. We will see limitations to access of care, restriction of care and longer waits for care because it has to fit in a budget. We need only think of the examples of England and Canada.

The wonderful Surgeon’s Blog by Sid Schwab touched on this the other day in a post called “Times Two.”

Dr. Schwab is a general surgeon nearing retirement age who writes about the challenges in surgery. He has an excellent and informative blog.

He writes,
Working hard for its own sake, striving for excellence without any tangible recognition will be seen in some — but hardly most– doctors if they go on a salary. Because, unsurprisingly (or maybe surprisingly, to pundits) that’s not how it works in real life. I’ve been in the military, and I’ve worked at VA hospitals. Try getting a case on after three p.m. Try getting a lab test or Xray thenabouts. Work another patient into a crowded schedule? Stay through lunch, after hours, come in early? Sorry. That’s what ERs are for. If Alex Berenson (the NYT editorialist) is ok with it, so am I. Sleep, I’ve discovered, can be a pleasant thing.”

Princeton University economics professor, Dr. Uwe Reinhardt, pretty much the “go to guy” for health care economic theory responded with a letter that was published two days latter:

In “Sending Back the Doctor’s Bill” (Week in Review, July 29), you compare the incomes of American physicians with those earned by doctors in other countries and suggest that American doctors seem overpaid.A more relevant benchmark, however, would seem to be the earnings of the American talent pool from which American doctors must be recruited.

Any college graduate bright enough to get into medical school surely would be able to get a high-paying job on Wall Street. The obverse is not necessarily true. Against that benchmark, every American doctor can be said to be sorely underpaid.

Besides, cutting doctors’ take-home pay would not really solve the American cost crisis. The total amount Americans pay their physicians collectively represents only about 20 percent of total national health spending. Of this total, close to half is absorbed by the physicians’ practice expenses, including malpractice premiums, but excluding the amortization of college and medical-school debt.

This makes the physicians’ collective take-home pay only about 10 percent of total national health spending. If we somehow managed to cut that take-home pay by, say, 20 percent, we would reduce total national health spending by only 2 percent, in return for a wholly demoralized medical profession to which we so often look to save our lives. It strikes me as a poor strategy.

Physicians are the central decision makers in health care. A superior strategy might be to pay them very well for helping us reduce unwarranted health spending elsewhere.”

I believe you have heard that from me repeatedly. Someone should be paying attention.
I have followed Dr Reinhardt for years. He has finally figured it out. Bravo Dr Reinhardt! Maybe we have a chance. Maybe everyone will figure it out. Maybe a presidential candidate will figure it out.

  • Richard

    I have an MD and a PhD degree, and I can tell you the PhD life was awesome– 40-50 hours a week, weekends off. Being a doctor is a completely different world. I work 90-110 hours a week (I’m a surgeon), and I don’t have a choice, I don’t get more than 2 weeks vacation a year, and when I am at work I am working 100 times harder than I ever did during my PhD years. 4 yrs college + 4 yrs med school + 4 yrs PhD + 7 yrs surgery residency + 2 yrs fellowship = TWENTY ONE YEARS. The most I’ve ever made is $65,000 per year. I went into medicine because I loved science and a challenge, and not for the money, and I can tell you if I had done it for the money, I would have quit this career long ago. My brother is in the marines (who make almost nothing), and he has a house and property, whereas I have trained for 20 years and I still rent, and I own a car that’s 15 years old.
    Secondly, the health care system is way overloaded (as evidenced by the number of hours I work). People should do their research before commenting on the pay of doctors and surgeons. First of all, physician pay is less than 5% of health care costs. Secondly, the reason physicians in the US get paid more than other countries is because doctors in the US work almost twice the hours on average than in other countries (which is part of the reason wait times in the US are miniscule compared to other countries). If pay is regulated for physicians, I can guarantee physicians will do more to regulate their lifestyles, and good health care will be in severely short supply.
    Also, if you think socialized medicine will decrease how much you pay for healthcare, think again. If you are an average american making $40k a year, you will all of a sudden be paying not only for your care, but subsidizing the care of millions of people who sit on their butts all day with their diabetes, COPD, vascular disease, renal failure, obesity, etc. About 10% of people use up 90% of healthcare costs and resources. So distributing costs will only make the average person pay more out of their pocket for healthcare.
    Also doctors in foreign countries go right into med school from high school, and tuition is paid for them! US doctors spend years more studying medicine and science, and go into extreme debt to do so, and by the time they finish training they have worked more hours than most people have worked by the time they retire.

  • Eric

    Unfortunately your analysis, along with the previous comment are completely void of economic considerations. This is typical with Doctors who I have spoken with who tend to be short sighted and tunnel visioned. Sure, physicians in the U.S. make considerably more per hour than most other professions, but this is a capitalistic economy. Medical care must be analyzed in the same category as any other good and service, basic supply-demand economics.
    The problem is, doctors are trained in medicine, and usually very narrowed areas of medicine. For this reason, they, including some in my own family, usually justify their salary based on the “price they had to pay” to become a Dr. through years of training. The fact is, many professions require years of training,long hours and great responsibilities. These are not reasons why doctors are paid high salaries.
    Doctors are paid high salaries because the market allows them too. Of course, this is not limited to doctors, many professions in the medical industry, including insurance, have the potential to draw high salaries.
    Whatever your “opinion” about the pay of medical providers, including doctors, it should stem from a economic analysis. I can not listen to another Dr. talk about how much training they had and how many hours they work. I am ending 11 years of high education, at the cost of med. school, for my profession this year and will not even graduate with a terminal degree. The average salary for my profession is under 50k a year.
    One more thing. You say that “About 10% of people use up 90% of healthcare costs… distributing costs will only make the average person pay more out of their pocket for healthcare.” We are have redistribution of health care cost, its called group insurance. On top of that, I know for a fact that med. provides over charge for services to make up for the drastic number of patients that can not or will not. pay.

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Do Doctor’s Get Paid Too Much ? Part 1

Stanley Feld M.D.,FACP,MACE

On July 29,2007 Alex Berenson wrote a lead article in the Sunday New York Times business section entitled “Sending Back The Doctors Bill.” I believe everyone should be exposed to all opinions. However, Mr. Berenson’s article needs rebuttal because he simply does not know what he is talking about.

In my view the quality of the news in the New York Times has deteriorated recently. Alex Berenson is producing yellow journalism. It is sensational and does not accurately address the problems in the healthcare system. Following on the heels of “Sicko” and the misinformation and disinformation contained in Michael Moore’s film. Mr. Berenson’s article can make people believers of the wrong conclusions. A review of Mr. Berenson’s recent articles confirmed my opinion of his sensational reporting tendencies.

This article confuses the issue of how to repair our dysfunctional and broken healthcare system. I had hoped there would be resounding public outcry against his article. Unfortunately the response was meager. I have struggled with my response because the physicians’ incomes are not the problem in the rising costs of the healthcare system. In fact, cognitive physicians (internists, and family practitioners) are not paid enough. The hospital fees, the insurance industry fees, and the exorbitant administrative fees and inefficiencies of the hospitals and insurance industry are the problem.

Let us do some math. Health costs are now $2.2 trillion per year and rising in the U.S. Physicians’ gross revenue represents about $500 billion per year of the total exclusive of overhead. The $500 billion dollars in revenue represents 22% of the healthcare costs. Therefore 78% of the healthcare cost are spent in other places. Medicare has proposed a 10% reduction in physicians’ reimbursement in 2008. Since the insurance industry adjudicates the claims for Medicare they will also try to reduce payment by the same amount for the private healthcare insurance policies they service. A 10% reduction is $50 billion dollar or 2.3% of the healthcare expenditures. The 2.3% reduction represents an insignificant reduction in the overall cost of healthcare. This reduction will generate much pain and resentment. The cost of care reduction must come from areas that generate the other 78% of expenditures. The other stakeholders have been responsible for the yearly increase in healthcare costs while physician reimbursement has decreased. A $4,000 to $30,000 a day hospital charge should raise some eyebrows.

The physicians’ payments are not the cause of the rising healthcare costs. It is the insurance industry’s fees, insurance industry’s administrative waste and salaries as well as hospital fees, administrative waste and salaries. If we knew their costs (price transparency) and we saw their profits and we forced them to eliminate waste, we would truly reduce healthcare costs.

The only way to accomplish this is by adequate governmental rules, and a consumer driven system to stimulate competition.

If we are going to have a conversation about the ills of the healthcare system this is where Mr. Berenson’s energy should be expended. Mr. Berenson has created a smoke screen with sensational reporting to distract the conversation from the real causes of increase costs to the healthcare system.

Mr. Berenson says,

“But many health care economists say both sides are wrong. These economists, some of whom are also doctors, say the partisan fight over insurers and drug makers is a distraction from a bigger problem: the relatively high salaries paid to American doctors, and even more importantly, the way they are compensated.”

He then goes on to say that “Doctors in the United States earn two to three times as much as they do in other industrialized countries.” We should probably earn more if we compare incomes and the necessary skill level required in medicine to the salaries paid to less comparable skill levels in other industries in the United States of America.

The temptation of practicing physicians is to become defensive about their income. In my mind all the defensive arguments are valid but unnecessary. It has become easier for physicians to communicate with people and each other since the advent of blogging.

Richard Reece M.D. says

“Given the years of training that doctors require, the stress, and the responsibility of their jobs, few would disagree that they should be well paid. In addition, with a year of medical school now about $30,000, many doctors leave school deeply in debt. And many doctors would argue that cutting salaries would only persuade talented, college graduates to pursue better-paying professions. These actions will worsen the doctor shortage. Presently this shortage is estimated to be about 50,000 physicians. The shortfall has been quoted to be 200,000 by 2020.”

Ask yourself, why would any bright young person spend 11 to 15 years preparing for a profession in which systematic fee reductions are guaranteed ?

Dr. Rob Oliver in Plastic Surgery 101 nailed it.

“Completely missed by the author (Mr. Berenson) is both the expense of training physicians and the “opportunity costs” invested in becoming a Doctor by highly educated people in their early twenties.”

“For sake of comparison I’ll use myself as an example:

• Tuition and living expenses during college ~ $150,000
• Tuition and living expenses during medical school ~ $85,000
• Average wage during my intern year in 1998 ~ $5.80 /hour
• Average wage my 8th year in surgical training in 2005 ~ $9.75 /hour
• Spending ages 22-35 in the library or hospital ~ PRICELE$$

It is important to note that Dr. Rob Oliver is a young physician. I applaud his frankness. In the past, policy wonks have used the argument that young physicians will not have experienced the “golden age of medicine”. Therefore they will not know any better. I believe the policy wonks are going to be in for the surprise of their life. Bravo Rob Oliver!

How do you calculate how much someone is worth? How much is Barry Bonds worth? How much is Kobe Bryant worth? How much is Paul Levy CEO of Beth Israel Hospital in Boston worth? $1.2 million dollars a year? He thinks so. How much is the CEO of United Healthcare worth? $1.8 billion dollars? How much are the CEO’s of Fortune 500 companies worth? Are any of these people worth more than $150,000 per year?

How much is the discovery and effective treatment of an illness that saves a life worth? These questions are not questions that are going to be answered by Mr. Berenson’s yellow journalism. They are also not questions that are going to be answered by academic policy makers with little to no clinical experience in the trenches. They are questions to be answered by the marketplace. The sooner we understand these questions the faster we will be able to develop a formula to repair the healthcare system.

Consumers understands these questions, especially when they become sick. However they have been rendered powerless by our present healthcare system. The people are going to have to drive the repair of the healthcare system. Government policy should be to express and service the needs of the people efficiently and effectively. Government policy should not be driven by facilitators’ vested interests.

  • Marc Chasin, M.D.

    I enjoyed your post. As a physician I wholeheartedly feel that we are underpaid. Time value of services is the norm in healthcare. There is no consideration for risk and malpractice coverage. We, as physicians are posed as the scapegoat when in all reality we give more free care away that the average business does.

  • dr. rob oliver

    Thank you for the props Dr. Feld.
    What I was trying to explain to lay people is this disconnect Berenson had with what it costs a person to become a Physician.
    I love what I do, and I’m a 4th generation surgeon, so I kind of knew the score going into medicine. But suggestions like that NYT piece just miss the boat with the workforce in medicine and just how fragile the system is.

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Who Should Own The Healthcare System?

Do you think the Insurance Industry should own the healthcare system? My answer is no! Do they? Yes!

The healthcare system should be owned by the patient. The patients should own his healthcare dollar. This is the only way that competition and innovation can be stimulated. The necessary paradigm shift is not going to be driven by the insurance industry, the hospitals, or government officials under political influences. The government can only do the right thing with the appropriate leadership. It seems to me the only potential presidential candidate that has the slightist clue to repair the healthcare system is Rudy Giuliani.

Last week Mr. Giuliani called for “transforming the way health care coverage is provided in the United States, advocating a voluntary move from the current employer-based system to one that would grant substantial tax benefits to people who buy their own insurance.

“He proposed tax exemptions of up to $15,000 per family, allowing individuals to direct that money toward the purchase of health insurance and other medical spending. He also said he opposed any government mandates that would require people or businesses to buy insurance, which is central to the universal health care plan neighboring Massachusetts, passed in April 2006 when Mitt Romney, a Republican rival, was governor there.
In order to help the poor or others struggling to afford health insurance, Mr. Giuliani said he would support vouchers and tax refunds along with savings incentives. ”

I believe Rudy Giuliani’s rhetoric is a relatively meaningless sound bite at present. However the sound bite is on the right track. I believe if his campaign gets off the ground he will be willing to learn from physicians and patients. He would be capable of leading us out of the morass we are in. He also believes the healthcare issue is a vital issue. I think he believes in sound business principles. He seems to understand the problems of the dysfunctional healthcare insurance industry.

Mr. Giuliani understands a good deal about how the free market economy works. He believes in the power of the consumer and people power. He also understands how dysfunctional systems can be repaired. Recall that he took a totally dysfunctional New York City riddled with crime and corruption, and transformed it into a functional and civilized city. He also angered a lot of the established vested interests along the way. However, most were grateful that he broke the log jam.

He transformed the national view of New York City and its people. He stimulated an unprecedented prosperity for New York City and New Yorkers at a time when companies and industries were moving out of the city. I recall being picked up by a limo driver in New York City on the way to a press conference several months after Mr Giuliani was elected. I always figure that New York City limo drivers know more about what is going on in the city than anyone else. I asked the driver what he thought of Mr. Giuliani. He said “Rudy is great. He took three police forces that did not work and made them into one police force. Believe it or not the police have been energized. The police force works. We all feel safer.” My silent response was “holy cow”. I did not think New York City had a chance. Maybe Mr. Giuliani was lucky.

Many feel the same way about the healthcare system. Repairing the healthcare system doesn’t have a chance. I think they are wrong. The healthcare system can function with the principle stakeholders, the physicians and the patients, in charge and the consumer driving the system.

I also believe Mr. Giuliani’s campaign has many problems. Many people will be against him for his views on other issues. His seemingly logic approach to the healthcare issue makes him the only possible shining star presidential candidate for the healthcare morass. He does not have the formula for repair quite right, yet he maybe a fast learner, if there is such a thing in a politician. He may also be able to stimulate a more attractive candidate to understand the desires of the people as it relates to healthcare. We need to put the people in charge not the insurance industry or the government.

  • Greg

    I agree with both the post and the comments. I believe better policing the drug industry would free up alot of money as well as stop big pharma from price gouging its consumers. You know its time do do something when your citizens are filling their prescriptions from

  • MT

    Regardig “Giulani’s” health care proposal, I want to call your attention to the fact that “his” proposal is actually Bush’s proposal.
    You can read the Congresional Budget Office’s evaluation of it in Appendix C at this link:
    What Giuliani does not tell everyone is that this proposal would also add all employer-paid health benefits to the employees’ income. Currently, as you surely know, they are deducitble to the employer but not taxed to the employee. This will fail politically, I predict.

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This is Not The Way To Repair The Healthcare System: Part 3

Stanley Feld M.D. , FACP, MACE

Hopefully, many of you have found that physicians are kind people. Physicians do not want to fight with anyone. Most physicians love medicine and appreciate the privilege of helping people who are ill. The pressures and distortions of practicing medicine in our healthcare system have led to a spinning of the kindness of physicians in an ugly way. Healthcare is a big business. It is a two trillion dollar a year business and rising. This two trillion dollars does not include money customers spend on products and services to keep themselves healthy such as megavitamins, personal trainers, health foods, and health clubs just to name a few. This additional industry is estimated to be one hundred billion dollars.

The insurance industry is in business to maximize its bottom line. Most of the healthcare insurance companies do not have sophisticated information technology systems to accurately measure data it presumes to measure as illustrated in my last blog entry. It has legacy systems that can not handle the complexity it has built into its approval and payment system. It also does not have an interest in understanding the complexity of the medical transaction between the patient and physician (patient-physician relationship).

Despite these facts, the government and its Medicare program have authorized various insurance companies in various states to adjudicate Medicare claims at a substantial price to the government. The less the insurance company pays to providers the more the insurance company makes from these administrative tasks. United Healthcare is not the only villain. Aetna has also taken advantage of its power to the disadvantage of the patient and the physician. Physicians are finally starting to fight back and expose the abuses of the insurance industry. The states local authorities are responding to the physicians and patients pain. Below is an order by the New Jersey Department of Banking and Insurance fining Aetna Health Inc. I am publishing this order because it is important that this decision does not represent another tree cut in the forest with no one around. It should be heard by as many people as possible. Employers, patients and physicians must hear this loud and clear. It emphasizes that there is something People Power can accomplish.

“Aetna ordered to cease unfair limitation of Medicare payments

In a victory for physicians around the country and a strong message to health insurers nationwide, the New Jersey Department of Banking and Insurance (DOBI) fined Aetna Health Inc. almost $9.5 million for an attempt to pay certain out-of-network providers what it deemed a “fair” amount—125 percent of Medicare—rather than the providers’ billed charges. According to the DOBI ruling, Aetna must directly pay the affected providers’ billed charges, in reparation, for certain services rendered out-of-network.

The $9,457,500 total penalty is among the largest that DOBI has ever levied against a health care insurer. The penalties include:
• $650,000 for misrepresenting its obligations in letters sent to 130 providers (amounting to $5,000 per offending letter)
• $7,747,500 for not attempting, in good faith, to effectuate prompt, fair and equitable satisfaction of the claims for certain services
• $530,000 for not providing its Health Maintenance Organization members and patients the right to be free of balance billing by providers for medically necessary services that were authorized or covered
Richard J. Scott, MD, president of the Medical Society of New Jersey, credited DOBI Commissioner Steven M. Goldman for the ruling.
“DOBI’s order demonstrates that [he] understands the hardships New Jersey’s physicians and their patients can suffer because of the actions of health care companies,” Dr. Scott said. “We commend DOBI for its response to Aetna’s actions, and we appreciate the time the commissioner has taken during the year to listen to what New Jersey’s physicians have to say.”

Physicians are starting to fight these abusive tactics all over the country as demonstrated by the Seattle physicians’ action against Regence Blue Shield in Washington State.

The various state boards of insurance are finally siding with patients and physicians. Hopefully these actions will act as a further deterrence to continued abuse.
Recently I received a comment from EC:

I was in Director of Finance and CFO roles where one of my primary responsibilities was evaluating and selecting health care coverage for several hundred employees and then managing the plan (as best as one can – it’s more similar to a rodeo ride where you just try to hang on). Unrelenting (and unapologetic) double digit increases every year. From first hand experience, I can honestly say employers really want to give their employees the absolute best coverage they can but the forces in the industry have them on their knees. If any other expense line item in a company’s income statement experiences half that amount of year after year increases, the person responsible would be shown the door – quickly. But, regarding healthcare, companies honestly try their best to put up with it. I wanted to share that so you can understand my perspective. Our goals are the same – the best, affordable healthcare – but we come at it in slightly different ways.

I absolutely agree with EC. I believe that employers want to give their employees the absolute best coverage they can afford. The insurance industry has priced itself out of the marketplace by inefficient legacy information technology systems, inappropriate incentives, lack of understanding of medicine, restrictive inappropriate pricing, a lack of innovation and a lack of incentive creation. It is not the employer who is at fault. .

The insurance industry must think creatively if the healthcare system is to be repaired. If the patients owned the healthcare system and their own healthcare dollar in a price transparent, price justified system, with equal tax treatment for all, and the possibility of the patients saving money for retirement if they treated themselves appropriately, a market driven system would emerge that would drive all the prices down as the consumer has in other industries. Wal-Mart is a perfect example.

The answer is not price controls. The answer is not artificial price manipulations. The answer is market driven prices that will be determined by consumer demand.

I hope no one thinks that the penalty Aetna suffered in New Jersey will actually hurt Aetna. I am sure the penalty will be built into the next premium Aetna charge to its 400,000 New Jersey customers.

It is time for employers and consumer alike to say we are not going to take this any more. It is time to demand that the government to set up rules that treat everyone fairly. If the consumer drives the healthcare system the consumer can make this happen. It is time for the insurance industry to realize it is killing the goose that laid their golden egg.

  • Mona Lori

    I am a huge fan of consumer driven market solutions for reforming our health care system. As a consumer advocate, I am heading up a grassroots initiative that uses social networking to help consumers find the best value for routine health care services. The website,, includes a directory of true prices for common health care services based on actual visits by individual consumers. The contents of the directory are contributed by consumers to share with other consumers. The website invites everyone to contribute, including the insured and insured, by anonymously posting prices they paid for routine health care services (such as MRIs, mammograms, x-rays, CT scans, vaccinations, office visits, dental and vision), along with their personal recommendations on the provider. The inspiration for started with a personal experience. Several years ago, I was trying to determine what my out of pocket cost would be for an MRI with a high-deductible health insurance plan. Since my deductible was not met, I knew that I was responsible for 100% of the MRI cost. After searching through my insurance plan’s website to find the best value, calling the plan’s toll-free number, networking with friends, and eventually calling local providers to ask about pricing, I concluded it was impossible to determine the price of the MRI in advance. The only way to find out the price was to go ahead and have the MRI and wait for the bill to find out what I am being charged for the service. This was unacceptable. Something needed to be done. If insurance companies and providers cannot or will not provide consumers with meaningful price data, how can we be cost-conscious consumers and make the most out of our health care dollars if we do not have the tools to help us shop for the best price and quality? This grassroots initiative is something that could be accomplished immediately without waiting for legislation to pass, complicated programs to be initiated, or wait for the country to decide how to reform our health care system. The site was launched last month and everyone is encouraged to participate. If achieves critical mass, and enough consumers participate to share prices – consumers will have collectively created a powerful tool to help make informed healthcare purchasing decisions. Everyone benefits by exposing health care prices. Consumers save money by shopping for the best value and eliminating wasteful spending on unnecessary procedures and overpriced services. Competition and choice drive down prices, improve services, spark innovation, increase patient care and improve quality. Be sure to check out and be sure to tell others about this consumer initiative.

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This is Not The Way To Repair The Healthcare System: Part 2

Stanley Feld M.D.,FACP,MACE

Medical organizations have tried to standardize the diagnosis and treatment of various chronic diseases by creating clinical guidelines as a template for medical care. I was the chairman of the AACE guidelines for Diabetes Mellitus in 1995 and 2002. I have also been the guidelines co-chairman for Thyroid Disease, Thyroid Cancer and Thyroid Nodules for AACE.

The guidelines were based on the best contemporary evidence based medicine available. They were meant to be educational and not used as a weapon against physicians for not following the guidelines. The clinical guidelines were not supposed to act as algorithms to commoditize medical care. The goal was not to develop systems mechanically treat people or evaluate physician care. Quality Medical Care is a complex combination of many processes. Clinical judgment and the patient physician relationship is a key factor in quality medical care.

One of the problems with the guideline phenomenon, in my view, is there are many guidelines on the same subject by various medical and disease specialty organizations. Some guidelines are more detailed than others. The guidelines were meant to be educational guidelines only. The guidelines are also fluid and always changing. The insurance industry is making a grave misstep in creating faulty data points and penalizing physicians for not following its created data points.

The Washington Post article of July 24, 2007 goes on to describe much of the conflict between the insurance industry and physicians. This article is important to review because it touches on a problem that must be solved for any progress to be made in the repair of the healthcare system.

“The trend, ( using quality measurement guidelines) which parallels a push by President Bush to promote consumer access to information about health-care quality and cost, has spurred a lawsuit in Seattle, a physician revolt in St. Louis and a demand by a state attorney general that one insurer halt its planned program.”

The guideline trend does not parallel the push by President Bush. It does not empowering the patient to make an educated free choice of physician. It is empowering the insurance industry to penalize physicians. It is giving the insurance industry a tool to lower reimbursement without due process.

In my view, the lawsuit by physicians in Seattle and the physician revolt in St Louis with a state attorney general exercising his power to stop these programs is warranted. I would say it is about time someone has some guts to say this is not the way to Repair the Healthcare System.

“Analysts assess cost efficiency by looking at factors such as how many and what types of exams were conducted. Was a breast mass biopsy done in a hospital with an overnight stay or in an out-patient clinic? Was a generic or brand-name pain medication prescribed?”

Isn’t this the insurance industry telling physicians how to practice medicine? Isn’t this meddling in medical care?

“A doctor who performs well might be awarded stars, a smiley face or a Tier 1 rating. An inferior doctor’s patients might require paying higher co-payments, or the physician might be shut out of an insurer’s preferred network.”

Isn’t this bizarre? Is this giving patients a free choice? It looks as if the insurance industry wants to solidify its power over patients, physicians and the healthcare system?

“In the Washington metropolitan area, UnitedHealthcare has been gathering and evaluating data on physicians and in January rolled out a Web site that ranks physicians with zero, one or two stars. Officials at the District of Columbia Medical Society said they were told that the goal of the Premium Designation program was to encourage physicians to refer patients to two-star doctors and for patients to seek out two-star physicians.”

“We were shocked that they would be profiling physicians for the past 18 months and not tell anyone,” said Peter Lavine, chairman of the board of the medical society, which met with UnitedHealthcare officials last fall.”

This was a unilateral decision by United Healthcare to use criteria to profile physicians using information that might not be accurate?

“Officials with UnitedHealthcare, the nation’s second-largest health insurer and a unit of UnitedHealth Group of Minnetonka, Minn., said the goal is merely to provide information to consumers and to help doctors improve their performance”.

United Healthcare acted without consulting with physicians or physicians’ organization about what they were doing.

“Our focus is really on transparency,” said Lewis Sandy, UnitedHealth Group senior vice president for clinical advancement.”

The use of the word transparency is an insult to medicine and the healthcare system; United Health has done everything in its power to avoid revealing its true costs and its true payments to hospitals and physicians to the consumer. United Healthcare with its high paid administration (1.8 billion over 8 years for its CEO) has been the villain before many times in the past.

With the same breath they have declared that they want to befriend the physicians and patients

“UnitedHealthcare announced it would delay launching its program in New York, New Jersey and Connecticut after doctors complained and after New York Attorney General Andrew Cuomo threatened legal action.”

United Healthcare is gracious enough to delay launching the program in other places. It did not do anything to right the wrong in Washington D.C.

I think physicians should boycott United Healthcare. Another insurance company would get the point and step up and take business away from United Healthcare.

“One doctor fighting ratings systems is Seattle internist Michael Schiesser, who said his rating plummeted from excellent to the 12th percentile within a few months. He said initially Regence BlueShield, an insurer in the Northwest, ranked him in its top 90th percentile of doctors and awarded him a $5,000 check.”

“Later, when Regence cut him from its network and patients had to pay out-of-pocket to see him or go elsewhere, he pressed to see his report. He said he discovered that he had been penalized because of errors in data-gathering.”

“I couldn’t believe the extent to which they had botched the data,” he said.
“He said Regence faulted him for failing to control diabetes in patients who did not have the disease. He said he was docked points for not performing a Pap smear on a woman who had a hysterectomy. He added that his colleague was faulted for not performing a mammogram on a woman who had undergone a double mastectomy.”

This is not unusual. First of all, where is the due process? Has the State Board of insurance given this insurance company the authority to do this? This is where the State Board of Insurance must exercise its power. It is the government agency that grants insurance companies the license to sell insurance in the state and judge its tactics.

Last fall, Schiesser joined five other doctors and the Washington State Medical Association in suing Regence BlueShield, claiming defamation and deceptive business practices after the health plan told participating members that they no longer had access to about 500 doctors because the doctors did not meet the insurer’s quality and efficiency standards”.

Bravo to these physicians. Patients and employers should be right behind them in protesting.

“Regence spokesman Charlie Fleet said that because of the lawsuit, the company could not comment on the data issue. He did say, however, that the data were “provided from the physicians themselves.”

In my opinion this is typical babble from an insurance company spokesperson. The insurance company has overstepped the line and should have its license to sell insurance in the state rescinded.

“In December, Regence abandoned its plan.”

Essentially Regence admitted its error. Where is the State Board of insurance examiners penalty?

“Doctors critical of ratings systems say they are held accountable for whether patients exercise, take their medications or follow their prescribed regimens.”

Here in lies the charade and exposes the faulty evaluation system. Quality measurements were adopted because they are easier to measure than clinical outcomes. Quality measurements may be sensitive in picking up differences between physicians. Many studies show an overall poor correlation between such measurements and clinical outcomes. It is probable that the weak association is due to an inability and unwillingness to measure the many processes involved in medical care such as patient compliance and the physician patient relationships. These processes may have a positive or negative effect on the clinical outcome.
The criteria the insurance companies are using are faulty. Patients and physicians must demand a stop to this faulty profiling.

“Berkenwald, the Massachusetts internist, said he was pushed from Health New England’s top 10 percent of physicians into its second tier because several of his female patients did not get the mammograms or Pap smears he prescribed.”
“But Berkenwald received a top-tier rating by several other insurers participating in the state’s Clinical Performance Improvement Initiative because the health plans use different cut-points for determining who falls into which tier.”
“Disparate ratings can confuse patients and cause turbulence in group practices.”

The disparate ratings also cause anxiety and anger in both patients and physicians toward the insurance industry.

“Despite its flaws, proponents say the systems encourage much-needed quality and cost control.
Dolores Mitchell, executive director of the Massachusetts Group Insurance Commission, which launched its physician-rating program four years ago, said she’s heard doctors’ complaints about errors. But at $1 billion in annual spending on health care, she said, improving performance and efficiency is crucial.”

Someone should tell Dolores Mitchell this is not the way to do improve performance and efficiency.

“The data may not be perfect,” she said. “But they’re better than any data that we’ve had before.”

This kind of thinking will not repair a dysfunctional healthcare system.
It will only create more dysfunction while increasing the insurance industry’s bottom line.

  • Zagreus Ammon

    The question, my dear Ms. Mitchell, is not if the data is perfect. The question is if the data is good enough to be actionable.
    The problem is how to generate data without the idiots taking action before they understand the limitations of the data.

  • Richard Jellicoe

    What amazes me is that AARP endorced this company when it was time for 2007 Medicare sign up and it was not till many months later that AARP acknowledged that it’s endorsement of UnitedHealth care was a paid endorcement. They offer drugs with co-pay almost twice what you can get the same drug via cash. I guess thats how they can pay it’s fired ceo 5 million in retirement. And AARP is supposed to help the seniors.

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