Stanley Feld M.D., FACP, MACE Menu


The Demise of the Patient-Physician Relationship: Price controls do not work!



A few days ago I received an email comment about my successful 43 years of marriage.  I answered the email in the comment section. However, I feel the answer deserves publishing in the main body of the blog. The answer can serve to illustrate the development of problems in the healthcare system and the Demise of the Patient-Patient Relationship.



Wanted to let you know that I have been reading your blog from the start, keep up the good work! On a personal note, happy 43rd to you and Mrs. Feld. Whatever your secrets to a long and happy marriage, we should try and bottle that, we could all use some. Also, Happy Father’s Day!



Thanks for the comment.

The key to our successful marriage is mutual respect, mutual trust, and love.


One can also look to this answer as a definition of the therapeutic effect of the Physician-Patient relationship. The therapeutic effect is a positive physician-patient relationship. In my opinion, the patient-physician relationship has been destroyed by the attempts of policy makers to fix the healthcare system. The actions catering to the facilitator stakeholders have only made the this relationship vanish.

Price controls do not work in any industry in my view. Intelligent people always seem to figure out how to get around price controls.

In medicine, the price controls imposed by Medicare in the early 1980’s, led to physicians seeing more patients in a less of time. Physician offices started to rely on physician extenders to relate to the patients as well leverage the physicians intellectual property. Physicians were forced to distant themselves from this important therapeutic effect. One of the most important healing factors in medicine, in my opinion, is a positive relationship with the patient. If physicians have no time to relate to the patient this all important effect erodes.

As a result of Medicare price controls, price shifting was occurring. The private insurance industry was happy because more money flowed through the system resulting in more profit. However, the insurance carrier started to delay payment and in many cases reduce payment to the physicians. Physicians did not notice the reduction in payment. Their financial information systems were not very efficient or effective.

Physicians noticed they were working harder, seeing more patients and taking home less money.

When they realized their fees were cut by the insurance companies, they were very angry at the insurance industry. The physicians’, then, billed the patient many months after the service was performed. Patients’ became angry at physicians and at the insurance companies. Physicians were angrier at insurance companies because patients became angry at the physicians. Employers were angry at the insurance companies and the physicians. Everyone is mistrusted, and everyone disrespects each other. The demise of the physician-patient relationship. In fact the demise of any relationship.

Hospital stayed very quiet as they steadily raised their rates. Hospital pricing is a topic of a future blog. The hospitals did not experience the firestorm the physician community experienced. The rate of increase of hospital rates were higher than physicians’ or insurance companies’. However, the hospitals had an advantage. Only 5% of patients are hospitalized. Ninety five percent(95%) of potential hospitalized patients have no idea of the fees charged in the hospital. In fact, at least 60% of physicians do not know what the hospitals charge. One has to be pretty sick to be put into the hospital in these days. If you leave the hospital with all the scary media news about hospital acquired infections, medication errors as well as such things as amputating the incorrect arm, the former hospitalized patient is grateful to be alive. They do not have the energy to complain. They simply pay the bill, if they can. If they can not they are usually more stressed by the hospital system pursuing the payment. This collection drill also stress the hospital system and is costly. The remaining 90% of us, thank god, so not experience hospitalization. We are able remain detached from the fees the hospital is charging and choose to ignore the problem.

The therapeutic effectiveness of the physician patient relationship deteriorated rapidly during this period of anger toward physicians. Patients expressed some of this anger by suing the physician.

Malpractice suits increased markedly. Media coverage of medical errors did not help. The fact that some of the media coverage was disinformation was immaterial. The excessive law suits served to increase the price of care. Premium cost had to be passed on somehow. The government should have taken action at that time, but did not do anything. The government should have set or define liability limits as well as rules to discourage frivolous law suits. Limits on liability would have acted as a deterrent to plaintiff attorneys who saw easy money.

The physician extender market was escalating. The insurance industry saw an opportunity to devalue physicians. They categorized physicians, nurse practitioners, and physician assistants as Healthcare Providers thus implying an equality of value and therefore an equality of fees.

The mounting distortions resulted in physicians adjusting to the distortions. They ordered more physician visits and more procedures. The increase in malpractice suits lead to more defensive medicine. The result was more testing and more expensive treatment to avoid a malpractice suits.  The increase in the delivery of medical care led to higher Medicare payments and private sector payments as well. As a result the total gross Medicare and private sector payment obligations increased markedly over the next few years.

The major take home point of these examples is that price controls do not work. Price controls simply distort a free market system even further.

Everyone was in pain. The patients, physicians, government, and employers are all suffering. The insurance industry was prospering, but they feared they were losing their customer, the employer and can not keep up with their crazy insurance billing and payment practices. The lawyers were prospering at the expense of cost effective medical care (defensive medicine). The major stakeholders, the patients and the physicians were suffering because of the quality of care, the cost of care and the access to care. Interesting enough the facilitator stakeholders were starting to suffer as well.

What came next was even a sharper blow than previous blows to the effectiveness of our healthcare system.

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