a revealing bill from my doctor..

[genrex]

I saw the doctor 6 months ago, and I finally received the bill today, after the insurance company took its usual sweet time processing the bill (to earn interest on the money for the last 6 months).

The "billed amount" was $1600, but since the doctor is on the insurance company's approved list, he is limited to the "allowed amount" of $1000. The insurance company paid $900 of this, and I have to pay $100. This is typical of the medical bills I receive, after I pay off my yearly deductible.

I see several problems with bills like this. First, it is obvious that the so-called "managed care" health-insurance companies are not concerned about paying doctors within the standard 90-day timeline that most businesses operate under, and this creates an unethical (but apparently legal) cash-flow burden on the doctor. Second, the "allowed amount" (determined by the insurance company) does not allow the doctor to make enough profit to stay in business. This is evidenced by the third issue: Anyone without insurance has to pay the entire "billed amount" (usually at least 50% up front). All of this exposes the ethical dilemma that doctors face... they are forced to charge cash customers (usually the unemployed and working poor) a significant surcharge, which is essentially a subsidy for the insured customers and the insurance companies.

Why do we have a system like this?..

[Isabo]

Are you sure cash customers are paying the same amount the insurance company does. Standard operating procedure for late payers is to inflate their bills in most sectors, or a rose by any other name, offer discounts for prompt payment, or in tax evasion central where I am; at least 30% off for cash and all paperwork disappears.

[livi]

Holly cow, what a complicated system! I guess our "tax to death" regime has has a few benefits. Not many though..

[genrex]

In my experience, cash customers can sometimes get a 10% discount from the large "billed amount".. but only if they pay in advance or before leaving the doctor's office.

And in my experience, the "billed amount" charged to cash customers is always significantly more than the "allowed amount" that the insurance companies *dictate* to the doctors.. typically 30% - 60% higher.

I have lived in different cities in Washington State, NW USA. I think my experiences are similar to most Americans. I think the system we have is unfair, and unsustainable.

[red-beard]

Anyone can negotiate with a doctor. And if you are paying cash, up front, you may be able to get 50% or better.

I had an ear infection and went to see a specialist. When I finally saw the doc, he had an intern with him. He spent most of his time with me, explaining to the intern what he was doing. Total time spent with doctor, less than 15 minutes. Extra service: He pulled a blob of wax out of one of my ears.

Bill came a week later for $250. For 15 minutes. My Lawyer doesn't charge $1000/hr! So I called the office and talked to accounting about the above situation. I said I was perfectly willing and able to pay, but I thought the bill was excessive for 15 minutes (or less) work. "OK, what do you think you should pay?" "I don't know? About half seems seems reasonable."

A week later I received a bill for $125. A few days after that, I got a bill from my insurance company that their negotiated rates for the proceedures were $85....

I think we should go back to the days of filling out our own paperwork and sending it in, or, each company that has health insurance should do the submitting. Put the costs where they will be the cheapest. This way the docs won't have to game the systemto pay for the staff to do all of this insurance BS.

Now my Dentist, she employs an extra specialist who does nothing but get your insurance benefits and then design a treatment plan to maximize revenue...to her...

[Jims5543]

Right on red-beard. A few years ago I started "negotiating" with doctors prior to the treatment. They are a business like any other. I need to see the price up front to see wether or not I am continuing with this doctor.

I have a MSA and my family deductable is $5000 this is the only way I could afford insurance as a small business owner and a family plan. Although this has become unaffordable and I am looking for a lower deductable conventional policy. Since the first $5000 is out of my pocket, I wheel and deal since I am essentially paying cash.

My last MRI, for example, gets billed at $1200 to insurance and I paid $600 cash after negotiating with them. I do not mind driving an hour to a cheaper one if I have to.

Our countries health insurance system is a huge joke.

Nothing better than getting collection letters from the doctors office because your insurance company is dragging their feet paying out. Dont get me started.

[Flatbutt1]

A friend of a friend crashed his bike and incurred around $10K in medical costs. His health insurance payment was rejected by the hospital as insufficient and is chasing him for full payment. So he has to pay the full amount and chase the insurance company to reimburse him!

[Neilk]

I work for a small company that does claims auditing and recoveries for hospitals (if you are a hospital administrator, we can find you free money in your old claims, pm me for details). We process lots of ER claims and it's not uncommon to see $3,000+ claims in which the hospital only gets the allowed amount of $400.

Poor self pays, they would be on the hook for the full amount if they didn't try to negotiate, but I doubt any hopsital would voluntarily offer a ~80% discount.

[Tobra]

It is your Explanation of Benefits they sent you. I wish I could get an interest free loan from someone for a year. That long interval between service and payment is a killer. I know quite a few Docs who are not billing insurance at all. They charge the patient cash, and let them fight with the insurance company. If every doctor did this, our insurance crisis would end in about a week after all the patients got sick of fighting with their own insurance co. to meet its commitments

It is basically the same in the entire US. There are a lot of doctors who will not take HMO plans on the general principals, "I will not have a clerk tell me how to treat MY patients!" A lot of guys just retired when managed care took over California, up and quit becaue they refused to work 50% more to get paid close to the same. The concierge practice is getting pretty popular, you pay a bit extra to get treated the way I treat all my patients.

I give a significant discount to cash patients, from 10 to 100%, I do free stuff every single day for individuals.

Prices are largely set by the federal government. Each year, list comes out with the medicare allowable on every procedure possible, and the private insurance co. sets prices based on this. Insurance companies are in business to delay or deny payment, they have a fiduciary responsibility to do this, and a moral(if you think paying your valid bills is the right thing to do) responsibility to pay.

Big health insurance companies are getting more and more rich with managed care, it is an excellent scam. Take in the same or more money, slash money paid out and count it as fast as you can. Blue Cross denied every single claim from anyone who was not an MD(ie D.O., D.P.M., D.C., or whatever, for over a year in TX, LA, OK, and AR, they only stopped doing it when the feds came in and fined them over $10 million, and they still made a ton of money, even with the fine, that damn John Grisham book seems to have given them the idea.

[Neilk]

Speaking of Blue Cross, try to get Blue Cross of Illinois to pay an implant. Forget about it. They make you go through so many steps and even then they don't pay even though the contract firmly states that they are reimbursable at X%.

[legion]

1) Health insurers have often pushed down the prices of services to a loss for the doctor.

2) Some schisters have started these "billing seminars" for doctors. They are described as ways to bill insurers for all of the services that you render. What they really teach is unethical and sometimes illegal billing techniques like unbundling and using CPT modifiers like 59 on all bill lines. I think there is even billing software that does these things.

3) The net effect is that insurers have put strong downward pressure on the price of medical services, and doctors are putting more and more extreme upward pressure.

[Nathans_Dad]

Great discussion. Unfortunately we have come to the point where the medical insurers are paying less and less for medical services. This means that the doctor has to either increase his billing or increase the number of patients that he sees per day. So, you either have people who learn how to code aggressively (some, as noted above, do it unethically) or you have patients who aren't happy because their doctor only spent 15 minutes with them. I don't know what the solution is. Unfortunately I see healthcare in America becoming more and more divided in the future. You will have a certain number of doctors who will continue to take medicare and/or HMO insurance while another set will be set up more along the boutique model. You pay a set amount up front per year and you get things like 24 hour access to your doctor, appointments on demand, etc. The doctor likes it because he is able to see less patients and make more money. The patients like it because they get access to their doctor like they never had before. The downside is that the yearly fee is often $10k or more and that comes out of your pocket. Also, some medical ethicists feel that it is unethical to have a boutique practice. I'm not sure where I stand, but from someone who sees outpatients a lot, I can tell you that the outpatient physicians are getting hammered right now, reimbursement is dropping so their only response is to push more patients through.

Bottom line is that doctors are making less and less, especially primary care. I went to school for 8 years post high-school and 3 years of residency and I am making about what a mid level corporate executive makes with 4 years of college. I know I am making a whole lot less than a lot of financial guys or real estate people.

[legion]

So...should we socialize medicine in this country to fix these problems?

On the surface, I'm not opposed to socializing medicine. It seems nice to think that everyone will get medical care. It will make American auto manufacturers (just an example) have comparable expenses to their European counterparts.

The big problem, in my opinion, is that it will give the government a vested interested in the activities we partake of that could affect our medical needs. If our government controlled healthcare, it would also give itself the right to pass legislation aimed at reducing healthcare costs. Smoking? Illegal. Driving faster than 45 mph on the highway? Illegal. Auto racing? Illegal. Anything that would raise your risk of incurring medical services could be outlawed or regulated. Nothing would be made outright illegal to begin with, but they would follow the model of Sarah Brady and initially have a limited goal, that gets expanded over time.

[legion]

You're a doctor Rick? I'm glad that you didn't seem offended by what I wrote. I'm not trying to put blame on doctors. I think more blame lies with health insurers.

The way I see it, HMOs took off in the 90's with the promise of "cutting the fat out of the system". They did that, and then proceeded to cut to the bone. Their motivation is to bring down healthcare costs. The problem is, in doing so, they pushed doctors to use more creative means to maintain their incomes. I think that health insurers actually caused an increase in cost and inefficiency by trying to do the opposite.

It's kinda like when a new manager arrives in a slightly inneficient department in a company. The manager decides that his department needs to be at peak efficiency and micro-manages to make this happen. It really just forces employees to use more elaborate methods to maintain the status-quo...and productivity actually goes down. It's impossible to make anything 100% efficient. Some level of innefficiency must be tolerated.

I almost wish we could turn back the clock 15 years and let doctors be a little inefficient and a little too expensive rather than the HMOs forcing them to be very inneficient and very expensive...

[Tobra]

They cut the fat out of the system, and used it to make gravy. Just ask anyone if their insurance premiums have gone up or down in the last 10 years, the doctors are not getting the dough, so it does not take a rocket scientist to figure it out.

BTW, Legion, the gubmint already has a vested interest in the cost of healthcare, which is why they effectively set the fees, by way of stating medicare allowable amounts. Eventually, the gubmint will "be forced to" step in and take over the whole schlamiel, and the CEO's of the major players in the game will laugh their asses off all the way to the private islands we bought them.

We already are pretty close to the point where doctors are going to say, "Forget it, let someone else work 70 hours a week for the $100 G's annual, and the headaches, divorces, etc, etc" There are plenty of ignorant saps out there who still are under the misapprehension that doctors make a "lot of money"

[chuckw951]

State legislators have taken aim at these problems through the laws regulating health insurance.

A popular proposal is called "clean claims" legislation. This basically requires the insurers to pay within a certain amount of time for valid claims.

Another proposal prohibits "balance billing." If the provider agrees to accept "reasonable and customary" fees from the third party payer for services provided, then they are prohibited from billing the patient for the "balance" if the service is a covered service in the plan.

But off course not all states have seriously addressed the myriad of issues.

In some states the BC/BS ("the blues") have secured broad exemptions from the state health insurance laws.

Our health care system is in big trouble for a number of reasons.

Rick, you make a good point about compensation. While health care is expensive, the providers are not getting rich. Students starting college looking for a career path might not choose to become healthcare professionals.

I went to a conference last week that discussed the coming shortage of health care workers that will be needed in the next 15-20 years. My guess is that we will end up importing more workers from overseas to fill the need. Hopefully they will have appropriate training.

A recent report suggested that soon 1 of every 5 dollars spent in the USA will be on health care. That can't be sustainable for too long.

[Tervuren]

Originally posted by legion
You're a doctor Rick? I'm glad that you didn't seem offended by what I wrote. I'm not trying to put blame on doctors. I think more blame lies with health insurers.

The way I see it, HMOs took off in the 90's with the promise of "cutting the fat out of the system". They did that, and then proceeded to cut to the bone. Their motivation is to bring down healthcare costs. The problem is, in doing so, they pushed doctors to use more creative means to maintain their incomes. I think that health insurers actually caused an increase in cost and inefficiency by trying to do the opposite.

It's kinda like when a new manager arrives in a slightly inneficient department in a company. The manager decides that his department needs to be at peak efficiency and micro-manages to make this happen. It really just forces employees to use more elaborate methods to maintain the status-quo...and productivity actually goes down. It's impossible to make anything 100% efficient. Some level of innefficiency must be tolerated.

I almost wish we could turn back the clock 15 years and let doctors be a little inefficient and a little too expensive rather than the HMOs forcing them to be very inneficient and very expensive...

Most work environments with manufacturing in the US, an employer is only getting about 20-40% effeincy of what could be done. 50% is considered a good employee. At work, most uf os are in the very valuable 60-75% I'm even higher, as I come up with techniques to maximize my production, and if I find myself slow, I clock out, take a break, and come back and hit it again at maxx speed. Most of the regular things I do, I'm probably close to 90% effecient. A new process of course, I spend time figuring it out, quickest way, so there is loss at first, that is made up later.

The best way to manage, is to get the employee to figure out on his own a better way to do things, then get out of his way and let him do it. If it works, let him keep at it, if it doesn't get him to try something different. I'm very eccentric, but my boss lets me do things the way I like to do them, as it gets things done.

[Nathans_Dad]

Well the Doctors had it all to themselves and they couldn't control themselves either...

Those were the days of fee for service and escalating healthcare costs...which is why the HMOs were invented in the first place. So, the Doctors had their chance and blew it. Sad, really. I look at it much like the personal injury lawyers today. They are abusing a system to make money and the system will eventually get regulated because they are abusing it.

I don't think socialized medicine is the answer. I work in a socialized system now and I guarantee you guys would not want to get care in that system. Unable to see your doctor when you want to because he/she is booked, waiting 4-6 weeks for a CT scan or MRI, etc.

As in all things the answer is somewhere in the middle. First off, HMOs should be non-profit. I just doesn't make sense to have a company who is in business to make money being a middle man between the Doctor and the patient. Of course the Doc and patient will lose, the HMO is going to suck up as much money as it can while not providing any real service. I'm usually all for letting the market work, but in this case it is really jeopardizing our healthcare and the future of that healthcare. As someone pointed out, the word is getting out about being a Doctor...the smart kids are realizing that you take on a 60 hour a week job with high stress and constant threat of litigation to make about $150k a year on average. Sure there are cardiologists who make a million a year but there are also all those pediatricians whose average salary is about $80k. Lots of risk and stress for what amounts to a mid-level corporate manager's salary.

I actually don't think that Doctors need to make more money. What they need is less threat of getting sued by every single patient they see and less red tape to wade through to get people care through their healthcare plans. Fix those two things and being a Doctor starts to look pretty good again. Don't get me wrong, I like my job...it's just that the pendulum seems to have swung too far to one side right now.

[Tobra]

I would disagree that the Doctors "had their chance" with healthcare, well perhaps for a few years in the 1970's, but that is it. I wish I had an answer to it, I can tell you that the difference in quality of care and staff is clearly evident to me. I went from an area in Texas with very little managed care to the Capitol of it, Sacramento. People don't get a full appreciation of it because they don't know better. As the population ages, we will see some big problems in healthcare, insurmountable problems, and the money will not be there to attack them. I am essentially an optimist, but bad things are fixin' to ensue.

[ChrisBennet]

I'll grant you that the insurance industry tries to maximize it's income (legally, but unethically IMO) but I don't think that is why health care is so expensive.

As I understand it, health care is so expensive because so many uninsured people receive care. I saw a pie chart a while back showing how much of a local hospital's services were uncompensated - it was a huge amount. Ultimately the cost of the "free" services must be passed on to the rest of the paying customers.

-Chris