How Should Doctors Get Paid? – Part 4

Honest Pay for Honest Work

Times have changed. And it’s time they change again.

In the past, medical care was more episodic than it is now. People went to see the doctor when they felt unwell. Diabetes affected mostly older patients, who didn’t live long enough with the disease to develop complications. There were no blockbuster drugs for high cholesterol, Hepatitis C, fibromyalgia or chronic heartburn; we didn’t manage nearly as many patients on multiple medications as we do now.

In those times, a payment scale based on the length and complexity of the visit made sense, and there wasn’t much doctor-patient interaction between visits.

Today, we manage more chronic conditions, use more medications, do more laboratory monitoring, more patient education, and more administrative work on behalf of our patients than before.

Payment scales based only on what we do in the face-to-face visit have become hopelessly antiquated and stand in the way of the new demands of society – physicians providing longitudinal care for chronic conditions in patient-centered medical homes.

The business reality of primary care is that a doctor in a group practice needs to bring in $400/hour to keep the doors open and the support staff available to do the clinical and administrative work. Insurance billing and waiting to be paid is costly and requires cash on hand. Electronic medical records are expensive to install and maintain.

Insurance payments for face-to-face visits are arbitrarily “discounted”, yet expectations are increasing for providers to render additional services after or between visits. In many cases the extra work is generated by the insurance company:

A new prescription requires a “prior authorization”, but many insurers are secretive about what drugs must be tried before the desired drug will be approved (only a handful of insurers post their preferred drug lists on Epocrates, the central repository physicians can access on their smartphones);

A “pharmacy benefit manager” contacts a doctor to suggest that his diabetic patient should be on an ACE inhibitor or a statin, when the patient is actually already taking them. He pays cash at Wal-Mart because that is less costly than the insurance copayment at the local drugstore, so these drugs don’t show up in the insurance company claims data;

An insurance company writes to alert a doctor that a patient on expensive medications may be noncompliant with his regimen because he has only used 60 days’ worth of medicine in the last 90 days. That’s because the kind doctor slipped the patient enough samples to save him a copayment once or twice;

A prior authorization unit demands a “peer-to-peer” telephone call before they will authorize an imaging study. All the information required may be in the medical record, but they still want a call. The practicing physician is kept on hold for ten minutes ($70 opportunity cost) only to read out loud from the record to the insurance doctor. Other times the rural doctor has to tell a big city cardiologist that he ordered a nuclear stress test on a female patient instead of a stress echo because the nearest facility that does stress echoes is 200 miles south on icy and snow-covered roads in the middle of January.

The economics of the medical practice require a certain productivity level just for survival, so the administrative duties are often given inadequate time, or no time at all, resulting in shorter patient visits just to capture a few moments to do the administrative work. There is still considerable unreimbursed provider overtime, leading to physician stress, disillusionment and burnout.

We should be paid for this work, as well as for reviewing results and maintaining our patients’ medical records over time and in between visits – all noble ambitions of the medical home.

We should also, of course, be paid for face-to-face visits with our patients.

But who should pay?

The problem with having private insurance companies, Medicare or Medicaid pay is that patients have little reason to consider value for money spent. It’s natural to be less concerned about how we spend someone else’s money, particularly if that money used to be ours, before the tax man or insurance company took it away from us!

I know I am only a country doctor, but I have seen many different systems of health care since I started medical school in 1974, so in my next installment I will outline A Country Doctor’s Proposal for Health Insurance Reform.

1 Response to “How Should Doctors Get Paid? – Part 4”


  1. 1 Christina May 1, 2014 at 4:56 am

    I look forward to your “Proposal for Health Insurance Reform” with interest. As of now, I think patients should pay cash, (even if they later submitted a bill to their insurance company,) for the sake of their health and for society’s health as well. If patients realized how much their treatment costs, they would be more likely to be invested in their own actions towards healthcare and a wellness promoting lifestyle, which would make for better outcomes not only for themselves and their immediate friends and family, but for society as well.

    Insurance companies get away with such abuses as you outline (yes, I think “abuse” is the correct term) because patients do not realize how their insurance companies treat their doctors and how little the insurance companies actually care about the health and wellness of their insureds; at least in my opinion and observation.

    But it is also worth noting that in my experience, the majority of MDs do not have a clue what their therapies cost. When asked, they often get a quizzical look on their face as though they’ve never considered such a question. (Maybe they haven’t?)

    And yes, I put my money where my mouth is and pay cash for all services; therefore I use less and value them more. Interestingly, not all practitioners find this a benefit. Occasionally they seem put out that they have to figure out how to accept cash. Isn’t that interesting.


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