Archive for the 'How Should Doctors Get Paid?' Category

How Should Doctors Get Paid? – Part 5

A Country Doctor’s Proposal for Health Insurance Reform.

In the forty years since I started medical school, I have worked in Socialized medicine, student health, a cash-only practice and a traditional fee for service small group practice. The bulk of my experience has been in a Government-sponsored rural health clinic, working for an underserved, underinsured rural population.

Today, I will pull together the threads from my previous posts in the series “How Should Doctors Get Paid?” I will make a couple of concrete suggestions, borrowing from all the places I have worked and from the latest trends among the doctors who are revolting against the insurance companies by starting Concierge Medicine and Direct Primary Care practices.

Because I am a primary care physician, I will mostly speak of how I think primary care physicians should be paid.

I will expand on these concepts below, but here are the main points:

1) Have the insurance company provide a flat rate in the $500/year range to patients’ freely chosen Primary Care Provider, similar to membership fees in Direct Care Medical Practices.

2) Provide a prepaid card for basic healthcare, free from billing expenses and administration.

3) Unused balances can be rolled over to the following years, letting patients “save” money to cover copays for future elective procedures.

4) Keep prior authorizations for big-ticket items, both testing and procedures, if necessary for the health of the system.

5) Keep specialty care fee-for-service.

6) Have a national debate about where health care ends and life enhancement begins and who should pay for what.

Health insurance needs to be simple to understand and administer. It needs to promote wellness, and it needs to remove barriers from seeking advice or care early in the course of disease. It needs to empower patients to use health care services wisely by aligning patients’ and providers’ incentives.

Health insurance should not be deceptive. It should not promise to pay for screenings (colonoscopies and mammograms) and stop paying if the screening reveals a problem (colon polyps or breast cancer). It should offer patients the right to set their own priorities for their health while demanding concern for our fellow citizens’ right to also receive care.

Health insurance is not like anything else we call insurance; all other insurance products cover the unexpected and not the expected. Most people never collect on their homeowners’ insurance, and most people never total their car. Health insurance, on the other hand, is expected by many to be like a bumper-to-bumper warranty that insulates us from every misfortune or inconvenience by covering everything from the smallest and most mundane to the most catastrophic or esoteric.

What would it look like if Johnny or Fido puts mud prints on the living room wallpaper and Dad makes a claim on his homeowner’s policy? Or if Sally spills chocolate ice cream on the beige upholstery of Mommy’s new car and the auto insurance has to pay to have the seats recovered?

In today’s healthcare, everything is potentially a covered service, and there are no incentives to limit one’s claims against the insurance companies. I believe we need to make patients view healthcare spending as their business, and the money as their money.

My proposal for payment reform in healthcare can work in a single-payer system or with multiple payers, both public and private insurers:

Have the insurance company provide a flat rate to patients’ freely chosen Primary Care Provider, not the $3 per member per month we used to get from the HMOs of yore but real money. Something in the order of $500/year would be more reasonable for the primary care physician to manage a patient’s health care. This would cover maintenance of a patient-focused and updated medical record, care coordination, management of medication and communication issues, access to medical triage and treatment capacity and one yearly visit for personalized screenings and care planning. For a panel of 1,500 to 2,000 patients, this would bring in $750,000 to $1,000,000.

Keeping in mind that the annual per capita health expenditure in this country is $8,500, that would gobble up a mere 5.9% of the pie. The billing for this would be very simple; just a head count multiplied by the monthly fee. For comparison, physician practices in the United States now spend $82,975 per physician per year interacting with payers, according to the Commonwealth Fund. Roughly speaking, that means doctors spend more than one hour every day working to pay the billing department and to do the free work we perform for the insurance companies. Imagine the improvements in patient service an extra hour a day per physician would make possible.

The advantage with this kind of system is that it would promote shared resource stewardship between doctors and patients. Primary care doctors would be incentivized to maintain large enough panels of patients to get the basic funding, but they would need to maintain patient satisfaction with their service in order to keep that funding.

Like cash-only Direct Primary Care practices, with a financial foundation covering basic operating costs and with elimination of billing expenses, practices receiving insurance money up front can keep the total visit costs low. With overhead already covered, per-visit cost could be almost in line with today’s patient copayments.

I believe that under this model, primary care could do a much better job being responsive to patients’ needs than in today’s $7 per minute hamster-wheel race for the insurance money.

Provide a prepaid card, similar to EBT cards for food stamps, or department store gift cards, that patients can use for the average number of annual visits (3-4) with their primary care physician and a basic amount for laboratory tests as well as “blanket approved” ancillary services like initial visits with counselors, dietitians and physical therapists. Again, no billing, so we could do much more for less money.

Beyond the basic level of primary care, higher copayments and prior authorizations could indeed have a role. Money from the basic allotment not spent in a given year could be rolled over to cover future copays, such as for elective surgeries. This would help reduce the tendency to spend down the account every year with a “use it or lose it” mentality.

Specialty providers should not be paid by capitation, as some people have suggested, because the market forces that would make it necessary for primary care doctors to maintain a satisfied (and healthy) patient population would not work as patients often wouldn’t know how to rate their specialist until they needed the care. By that time it may be too late to “vote with your feet” and go elsewhere. Who would sign up with a brain surgeon, just in case he needed one?

At the risk of offending my specialist colleagues, the hassles of insurance billing and prior authorizations must seem at least a little easier to bear when you make your living doing fifteen minute cataract surgeries for $3,000 each than when you treat complicated diabetes, hypertension and heart disease in fifteen minute intervals for less than $100.

For catastrophic illnesses, like cancer, eliminate copayments altogether and provide monies to reduce barriers to care, like transportation to daily radiation treatments, which can be burdensome on patients and families.

This may be controversial, but we as the country that spends twice what other countries spend on health care need to talk openly about setting priorities. Going back to the example of homeowners’ insurance above, if all my neighbors make insurance claims to essentially pay for redecorating their homes, and my premium goes up, do I have the right, or even the obligation, to speak up and say that they are hurting their neighbors when their claims increase all our premiums?

Some of the difficult conversations we need to have concern the shifting definition of disease in our culture. Things that used to be seen as normal aging or just life in general have gradually become diseases, especially when new and expensive drugs are marketed directly to consumers. This is why I propose that diseases like cancer should be better covered than runner’s knee, benign enlargement of the prostate (and this is a sixty year old male talking) or restless leg syndrome (even though it was described by a Swede from my Alma Mater). Even temper tantrums are a disease now, and I can think of several $200/month drugs doctors prescribe for them. And, by the way, most newer brand-name drugs seem to cost at least $200-250/month. We all need to be aware of what tests and treatments cost, so we can assess their value.

As a Swedish American, I can honestly say that health care with no market forces is not an ideal system, but for market forces to have a chance to work, consumers (patients) must think of the money they spend as theirs, not someone else’s. Before that money landed in the insurance companies’ or Government coffers, it was on the top line of each of our pay stubs. We need a healthcare system that keeps us thinking of our nation’s healthcare budget as our own.

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.

How Should Doctors Get Paid? – Part 3

Should we be paid for outcomes?

This is often proposed, but I have trouble understanding it. Real outcomes are not blood pressure or blood sugar numbers; they are deaths, strokes, heart attacks, amputations, hospital-acquired infections and the like. In today’s medicine-as-manufacturing paradigm, such events are seen as preventable and punishable.

Ironically, the U.S. insurance industry has no trouble recognizing “Acts of God” or “force majeure” as events beyond human control in spheres other than healthcare.

There is too little discussion about patients’ free choice or responsibility. Both in medical malpractice cases and in the healthcare debate, it appears that it is the doctor’s fault if the patient doesn’t get well.

If my diabetic patient doesn’t follow my advice, I must not have tried hard enough, the logic goes, so I should be penalized with a smaller paycheck.

The dark side of such a system is that doctors might cull such patients from their practices in self defense and not accept new ones. I read about some practices not accepting new patients taking more than three medications. In the example I read, the explanation was not having time for complicated patients, but such a policy would also reduce the number of patients exposing the doctor to the risk of bad outcomes.

A few comparisons illustrate the dilemma of paying for outcomes:

Do firefighters not get paid if the house they’re dousing to the best of their ability still burns down?

Does the detective investigating a homicide not get a paycheck if the crime remains unsolved?

Does the military get less money if we lose a war?

Even if we were to accept and embrace outcomes-based reimbursement in health care, how would we measure outcomes?

We already know that an episode of care, say a hospitalization for heart failure or a COPD exacerbation can seem successful, but the 30-day readmission rate can cast doubt on that. First, of course, not all of that “outcome” is dependent on a single provider or even a group of providers, but involves ancillary staff, hospital resources and much more. This is one of the thoughts behind the Accountable Care Organization movement. Second, much of what happens in sickness and in health is not provider dependent at all. An unusually miserable weather pattern can make COPD relapse rates higher one month than the next, for example. What kind of bureaucracy would it take to create a payment scheme that factored in such things? And would our health care dollars really be better spent on such accounting efforts than on nursing staff levels or something else?

Other than short term outcomes for gallbladder surgeries, pneumonia hospitalizations and such discrete episodes of care, how would we measure “outcomes”, for example in primary care and disease prevention?

For pediatricians, would we follow their patients’ health into old age to determine how good their early care was? How about when patients switch doctors, often because of insurance coverage changes – who gets the credit or blame for future bad outcomes?

In short, I think outcomes-based reimbursement works only in a limited sector of healthcare. For primary care, and specialty care that spans over any length of time, we need to get back to basics in the form of Honest Pay for Honest Work.

And that will be the topic of my next installment…

How Should Doctors Get Paid? – Part 2

Hourly Wage, Piecework or Quality?

A long time ago, when I worked in Sweden’s Socialized health care system, there were no incentives to see more patients. In the hospital and in the outpatient offices there were scheduled coffee breaks at 10 and at 3 o’clock, lunch was an hour, and everyone left on the dot at five. On-call work was reimbursed as time off. Any extra income would have been taxed at the prevailing marginal income tax rate of somewhere around 80%.

There was, in my view, a culture of giving less than you were able to, a lack of urgency, and a patient-unfriendly set of barriers. One example: most clinics took phone calls only for an hour or two in the morning. After that, there was no patient access; no additions were made to providers’ schedules, even if some patients didn’t keep their appointments, not that there was a way to call and make a same-day cancellation.

As my father always said: “There must be a reward for working”. But, high productivity can sometimes mean churning out patient visits without accomplishing much, or it can mean providing unnecessary care just to increase revenue. For example, some of my patients who spend winters in warmer climates come back with tall tales of excessive testing while away.

A recent Wall Street Journal article offers an interactive display of doctors who collect the highest Medicare payments. The difference between providers in the same specialties across the country makes interesting reading. It is hard to imagine that many individual doctors are billing Medicare more than $10,000,000 per year.

So it might make sense to insure against paying for excessive care by also demanding a certain level of quality.

But defining quality is fraught with scientific and ethical problems, since quality targets really aren’t, or shouldn’t be, the same for all of our patients.

The scientific community, for example, knows that elderly diabetics with “ideal” blood sugars are more likely to suffer harm or die than those with sugars that are a little higher. Even though the American Diabetes Association has embraced higher blood sugar targets for older diabetics, many healthcare organizations’ quality assurance programs treat all diabetics the same and penalize doctors who individualize treatment goals in accordance with the scientific evidence or common sense.

In almost every area of medicine there are individual nuances that must be considered if we are to best serve each of our patients. It is ironic and very sad that, right now, those who pay us are looking for simple (or simplistic), universally applicable quality targets just as the explosion in our understanding of genetics is promising to usher in the era of “personalized medicine”.

Up until now, the gold standard of scientific research has been to prove which standardized interventions work best for large groups of patients, even if there are subgroups that aren’t helped at all by them.

Who should define the “quality” measures of our work?

The central question for how doctors might be paid for quality in the future hinges on the priorities of whoever holds the purse strings. Insurance companies, if we overlook profit motives that also exist, prioritize population management. They pay for what works for most people, knowing full well that some patients will not get the best care for their individual situations, for example when certain medications are not covered. Politicians also favor the population view of health care.

If patients pay us directly, they expect us to deliver the care that works for them. If the Government or an insurance company pays us, they expect us to deliver care that meets their standards, because they don’t trust the patients – their constituents and customers – to know what is best for them. And their focus is to have us do what helps most of our patients, even if some are not helped and some, or many, aren’t happy with what they are getting.

With all the political talk about “Patient Centeredness” during the current health care reform, may I suggest that patients need to be given more choice about how their health care dollars are spent. With limited choice and no responsibility, patients tend to feel entitled and deprived at the same time. This creates a toxic environment for delivering health care. I have never met a patient who felt in partnership with his or her insurance company – ever. And I don’t expect to.

In order to maintain what partnership is left today between doctors and patients, we need a cost-quality paradigm that is shared by patients and providers. We also need to foster and maintain a sense of stewardship that is elusive if all that is at stake is someone else’s money.

I think there are ways to achieve this.

(More to come…)

How Should Doctors Get Paid? – Part 1

It’s a strange business we are in.

I can freeze a couple of warts in less than a minute and send a bill to a patient’s commercial insurance for much more money than for a fifteen minute visit to change their blood pressure medication.

I can see a Medicaid or Medicare patient for five minutes or forty-five, and up until now, because I work for a Federally Qualified Health Center, the payment we actually receive is the same.

I can chat briefly with a patient who comes in for a dressing change done by my nurse, quickly make sure the wound and the dressing look okay and charge for an office visit. But I cannot bill anything for spending a half hour on the phone with a distraught patient who just developed terrible side effects from his new medication and whose X-ray results suggest he needs more testing.

As a primary care physician I get dozens of reports every day, from specialists, emergency rooms, the local Veterans’ clinic and so on, and everybody expects me to go over all these reports with a fine-toothed comb.

A specialist will write “I recommend an angiogram”, and we have to call his office to make sure if that means he ordered it, or that he wants us to order it.

An emergency room doctor orders a CT scan to rule out a blood clot in someone’s lung and gets a verbal reading by the radiologist that there is no clot. But the final CT report, dictated after the emergency room doctor’s shift has ended, suggests a possible small lung cancer. Did anyone at the ER deal with this, or is it up to me to contact the patient and arrange for followup testing? All of this takes time, but we cannot bill for it.

Most people are aware these days that procedures are reimbursed at a higher rate than “cognitive work”, but many patients are shocked to hear that doctors essentially cannot bill for any work that isn’t done face to face with a patient. This fact, not technophobia, is probably the biggest reason why doctors and patients aren’t emailing, for example.

Just lately, there is a new trickle of money flowing into medical offices for the type of between-visit oversight that goes with the new Patient-Centered Medical Home model of care, but it is not enough money to substantially change how doctors’ time is scheduled.

Taking a primary care physician away from direct patient care for just an hour can cost the employer somewhere around $400 in lost revenue. In today’s economic climate, few health care organizations can afford to fully embrace the notion of all the different indirect care activities others think physicians should engage in besides seeing patients one by one for a fee.

Of the three professions, physicians probably have the most confusing payment arrangement: Members of the clergy tend to make a straight salary regardless of how busy they are, lawyers bill for their time whether spent with the client or without, but we only get paid if someone is watching us.

If a tree falls in the forest, does it still make a noise?

If a doctor isn’t face to face with a patient, is he still a doctor? Is he still doctoring?

I say yes, but, then, how should we get paid?

(To be continued…)


Osler said “Listen to your patient, he is telling you the diagnosis”. Duvefelt says “Listen to your patient, he is telling you what kind of doctor he needs you to be”.

BOOKS BY HANS DUVEFELT, MD

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