Good Conscience is Bad Business

I am going to state something that is completely obvious to most primary care physicians:  I do not accept Medicare and Medicaid patients because it is good business, I accept them despite the fact that it is bad business.
In truth, I could make that statement about insurance as a whole; my life would be easier and my income would be less precarious if I did not accept any insurance.  If I did, I would charge a standard amount per visit based on time spent and require payment at the time of that visit.  This is totally obvious to me, and I suspect to most primary care physicians.  A huge part of our overhead comes from the fact that we are dealing with insurance.  A huge part of our headache and hassle comes from the fact that we are dealing with insurance.

If I chose to post my charges up front and expected payment at the time of the visit, the impact to the business would be huge.  As  it stands, the percentage of my collections that goes to overhead is between 50 and 60% (depending on the month).  A huge amount of that overhead is due to the need to hire a large billing staff to deal with the complexity of coding, billing, and documenting.  If I dropped insurance and charged a fixed amount, I could:

  1. Cut my billing staff nearly to zero (someone would still have to do bookkeeping).
  2. Increase my payment per visit, which would allow me to see less patients per day.
  3. Document for the sake of patient care, and not for the sake of getting paid.
  4. Add extra services like email access and house calls without worrying about how I would get paid.

In short, I could make my life better, my hassle less, and improve the quality of the care I offer.

So why just single out Medicare and Medicaid?  Dropping insurance would force all of my M/M patients to find another doctor, while my patients with insurance could still choose to see me.  There are several reasons why this is possible for insured patients:

  • Insured patients generally have the option of filing for their own insurance (there are some that still don\’t allow this, but that number is dwindling with the decrease of HMO\’s)
  • Insured patients could choose to just pay me cash if they choose

Can\’t Medicare/Medicaid patients do this?  No, for several reasons:

  • If a doctor does not accept M/M, the government will not pay anything for the visit regardless of who files.
  • If the doctor does accept M/M, they are required to accept that payment and cannot charge anything outside of that (aside from the 20% not covered).  So if I charge a M/M $50 cash for a visit and am a signed up to accept M/M, I am committing fraud.
  • If I drop M/M, I cannot sign up for it again for 3 years, so the impact of that move is too large to consider at this time.

So why in the world do I accept M/M still?  Why would I continue to make my life so difficult?  Two words: duty and calling.  I view my seeing M/M patients as a social responsibility (especially Medicare).  These people need to be seen and they deserve good care, and despite the hassle and drain on income they cause, I make a reasonable income.  So far.

Plus, I just like to take care of the elderly and the poor.  My personal reasons for going into medicine included both a desire to have a good job and the calling to care for people in need.  If I dropped M/M I would reject the calling for personal gain, which is something I can\’t do in good conscience at this time.

The fact that the only thing keeping me accepting M/M is my conscience (and tolerance of pain) gives a really clear explanation as to why M/M are failing in the realm of primary care.  The government is not paying enough to make a good business case to accept M/M; instead it is relying on the consciences of primary care physicians like me who are willing to put up with the huge hassle of the system.  I am personally willing to continue on this course as long as (it doesn\’t get too much worse) but I have complete sympathy for PCP\’s who drop insurance and no longer see M/M patients.

One of the biggest costs to our system is the high proportion of specialists to PCP\’s.  PCP\’s keep down cost, as their success is measured by keeping people healthy, away from specialists, and out of the hospital.  The system is just holding on with the PCP\’s we have; decreasing that number would be devastating and perhaps fatal to the system.  It\’s a very bad sign when the best business model for PCP\’s is to do something that, if done by all PCP\’s, would wreck the system.  Yet even physicians like myself, who have a strong sense of duty and social responsibility, wonder how long we can afford to take M/M.

I am sure some are thinking: Poor Doctors!  They have to earn less money!  They have to actually have a conscience!  What a horrible thing! To that I answer with the fact that I have chosen to earn less money, increase my hassle, and live by my conscience.  At this time, most PCP\’s accepting M/M are doing the same.  But setting up a system that requires the choice between conscience and sanity, between doing the right thing and self-care, is foolish.  Pushing down M/M payments for PCP\’s will make a bad situation worse.

That\’s bad politics, bad medicine, and bad business.

Consider yourself warned, Washington.

24 thoughts on “Good Conscience is Bad Business”

  1. Primary Care Physicans should be paid what they are worth…which is a HUGE amount more then they are getting now. i wish i could come up with a solution to this situation so that more than 2-3% of Med students would go in to these fields, where they are so badly needed. What is the answer?? Someone must have it and i wish it were me…..

  2. Great post (as usual)! It keeps me mindful that as an insured patient, I'm basically helping underwrite the cost of those M/M patients — which makes things really scary when one of the “solutions” to health care reform is to greatly expand M/M. Nice idea, but who pays?

    I'd also be curious to hear your thoughts on whether their are artificial barriers (like the AMA) which keep the number of medical students, and consequently doctors, lower than they'd otherwise be. I've long suspected this but not seen any real analysis. Your thoughts?

  3. I am sure the AMA does put some barriers up, although I haven't heard anything specific. I don't specifically know why controlling the number of physicians would be advantageous.

    I think that allowing docs to balance-bill (collect what medicare pays but bill beyond that), would allow docs to post their charges and for patients to shop by price as they do for any business. Good docs would end up being able to charge more.

  4. The NHS is no different, in terms of the conscience vs. costs dilemma. Post code (aka zip code) prescribing is commonplace, and treatments are offered to people from wealthy areas more readily than from impoverished ones. Docs can opt to NOT see private patients, and take an enormous financial hit, while paying the same high insurance premiums, in many cases ( I am not a doctor, so cannot quote actual numbers- just what I've heard). I hope that it eventually becomes too ethically expensive for gov'mint types to ignore inequity, but that great day doesn't seem imminent.

  5. Personally, I'd just as soon pay directly and let me deal with the insurance guys. Course, why would they have ANY reason to be fair with little old me?

  6. as usual, we really appreciate hearing these facts and also learning more about your heart/motivations, Dr. Rob. Thank you so much.

    (i find your situation analogous to what RNs go thru in their varied positions: more and more non-nursing duties dumped on them, with less staff to do everything [NO STRAW! MAKE THE SAME AMOUNT OF BRICKS!] … and nurses put up with it because we also have a conscience and also love our patients. We just get enormously stressed, frustrated, burnt-out, and overwhelmed by all the demands on us. And too many times, we who care (and find the situation intolerable) leave the profession. What a waste.)

  7. Great post (as usual)! It keeps me mindful that as an insured patient, I'm basically helping underwrite the cost of those M/M patients — which makes things really scary when one of the “solutions” to health care reform is to greatly expand M/M. Nice idea, but who pays?

    I'd also be curious to hear your thoughts on whether their are artificial barriers (like the AMA) which keep the number of medical students, and consequently doctors, lower than they'd otherwise be. I've long suspected this but not seen any real analysis. Your thoughts?

  8. I am sure the AMA does put some barriers up, although I haven't heard anything specific. I don't specifically know why controlling the number of physicians would be advantageous.

    I think that allowing docs to balance-bill (collect what medicare pays but bill beyond that), would allow docs to post their charges and for patients to shop by price as they do for any business. Good docs would end up being able to charge more.

  9. The NHS is no different, in terms of the conscience vs. costs dilemma. Post code (aka zip code) prescribing is commonplace, and treatments are offered to people from wealthy areas more readily than from impoverished ones. Docs can opt to NOT see private patients, and take an enormous financial hit, while paying the same high insurance premiums, in many cases ( I am not a doctor, so cannot quote actual numbers- just what I've heard). I hope that it eventually becomes too ethically expensive for gov'mint types to ignore inequity, but that great day doesn't seem imminent.

  10. Personally, I'd just as soon pay directly and let me deal with the insurance guys. Course, why would they have ANY reason to be fair with little old me?

  11. as usual, we really appreciate hearing these facts and also learning more about your heart/motivations, Dr. Rob. Thank you so much.

    (i find your situation analogous to what RNs go thru in their varied positions: more and more non-nursing duties dumped on them, with less staff to do everything [NO STRAW! MAKE THE SAME AMOUNT OF BRICKS!] … and nurses put up with it because we also have a conscience and also love our patients. We just get enormously stressed, frustrated, burnt-out, and overwhelmed by all the demands on us. And too many times, we who care (and find the situation intolerable) leave the profession. What a waste.)

  12. If that becomes a problem, there's always the prospect of requiring doctors to take M/M patients, (thereby pushing people out of medicine entirely, and shooting ourselves in the foot in yet another way). There are any number of short-term measures the government can take to avoid dealing with the problem they don't want to.

  13. I don't know whether to cry or laugh at this post… as one who has gone to school specifically for billing and coding I have a complete understanding of what you are saying. The govt is literally driving PCP's out of business and increasing health care cost by there very actions…. i shrudder at the thought that they would actually pass a centralized health care system or one of the other insane bills they are trying to pass. Before they add more problems they need to fix the ones they have! instead of driving good doctors out of business. Do you know how many people I know that changed there mind about going to medical school simply because of all of the problems intailed in being a doctor now days? instead they end up going to school to be a radiologist or some other kind of tech and forgo med school, its a shame really

  14. Dr. Rob,

    How does the HITECH act affect this? I am in a Healthcare IT course and we make a big deal about the huge incentives that will be given through Medicaid/Medicare.

    I suspect that you will be able to show Meaningful Use by 2011. Are the incentives enough for you? Did they change the way you see the Medicare/Medicaid issue at all?

  15. HITECH doesn’t inspire many docs. Most look at it with skepticism and suspicion. There always are hooks underneath the seemingly positive things. I’m happy about it, but it doesn’t make me happy about M’care at all.

  16. “Good Conscience is Bad Business” Could there be a worse indictment of our morals than that statement?

    Managed Care has been my career for 15 years, the last few in executive management. There are some very, very good people in the industry who truly care about the members. And there are some very, very bad people who have created the current morass of unpaid claims (due to inefficient claims systems), 'lost' appeals (per instruction) and abysmal customer service (low pay, understaffing and lack of training). I worked with one Medical Director who was so despicable I called him Dr. Evil behind his back. It got back to him and didn't do my career a bit of good but I'd like to imagine it made him think.

    Probably not. But I was quite pleased, if unemployed, that he knew I despised him.

    My point is this. As long as greedy human beings can make money with the status quo, it will continue. There are some solutions, but I have no power to effect them:

    Create a national, equitable, transparent fee schedule.
    Develop one universal claims software package that actually works.
    Hire more staff, pay them better and train them well.
    Hold people accountable for their errors.
    Do not tolerate mediocrity.
    Cap bonuses for CEO's.

    That would just be a start.

    I'm sorry Dr. Rob. But remember, doing the right thing always pays off in the end.

  17. All I know for sure as a coder (and as a patient, too) is that reimbursement for PCPs does, in fact, stink. I find myself wondering sometimes how it is that the dudes (could be “dudettes”, but statistically that's much less likely) with the big fancy equipment and procedures, who don't usually know much of anything about the overall patient (in a broad sense), get the most money for zeroing in on a much smaller target than the PCP. Like I've heard other doc bloggers say, cognitive services don't get diddly squat. (Some suggest it's the extra training, but that doesn't seem like enough justification IMHO.) The funny thing is, a few of the specialists whose blogs I've read seem to think there's nothing wrong with that system…(of course, why would there be when they're making the big bucks?) I think part of the problem, at least from a coding perspective, is that it is much harder to document cognitively based services than procedures. When a procedure is done, the note looks a lot different than one that's for an office visit where the doc is managing 3 chronic problems and perhaps something acute like a URI or an ankle sprain. I think even office procedures are paid better than the E/M levels per unit, generally speaking.

    As for insurance companies…I think that whole setup needs to be blasted down to the ground and rethought. Nobody wins when they're involved except the companies themselves; doctors and patients both wind up on the short end of things in some way or other. (Though I also think the general cost of health care prevents many people from going without it even if they'd want to.) Do you think providers and patients would tend to show the good side or the bad one of human tendencies if the middle man was eliminated and payment systems were direct? (E.g., the provider would have a set fee schedule based upon either time or the specific service(s) rendered, and that's what the patient would pay, or else there would be something like a sliding fee schedule based upon ability to pay or maybe a “bartering” system where the payment for services wouldn't necessarily be monetary but something material like goods or services.) I certainly don't think our government would have our best interests at heart in trying to fix this broken setup we have currently…

  18. In the end it seems to me that if medical specialist compensation exceeds that of PCPs then more individuals with choose the MS route and supply will drive prices down UNLESS there is more study, time and cost involved in which case they deserve more money I would think, or UNLESS access to these professionsis somehow restricted.

    I have a question which I'm still wrestling with. Perhaps someone has the answer. Other countries such as Canada and Denmark etc. use combinations of public and private care, spend 50% of what the US does per capita and cover more of their population, yet have much better outcomes per the World Health Organization rankings where the US is ranked 37th of industrialized nations. How do they do this. What's wrong with the system here ? Why can't we replicate these results ?

  19. Woody, I think the answer is uniquely American.

    Anything that has even a whiff of socialism is an anathema. And despite the fact those systems work (albeit not perfectly, I know), they are not going to be put into effect here.

    Our system will continue to suck, greed rather than health care will continue to be the driver.

    Another uniquely American trait? We want to have our cake and eat it too.

  20. I agree with you both. In some ways I fight that greedy impulse to go where the money is. But I do resent the fact that there are some contributing very little to the overall health of people who profit immensely (some who actually negatively impact their health), while PCP's, who have a huge impact, end up having to “do what's right” against their own best interests. If we are going to keep a capitalistic system, then at least motivate good behavior with more money. Pay most for what will help the system the most. If there was a way for docs to fix their fees and post them up front, then people could decide on their doctor based on quality, service, and cost. That's exactly what we do for everything else, isn't it?

  21. Your post is sad but true. I don't think its only for PCPs though. As an OB/GYN I am sort of a hybrid of PCP and specialist. We do OK on medicaid OB, in fact better than with some private insurers, but it is still very little compared to the time involved. In most states OBs need to deliver about a 100 babies a year to generate the income required to pay for the insurance that would allow one to do those deliveries. Only after 100 babies a year does an OB actually make any take home pay from the choice to provide obstetrical care.

    At present I am in an academic setting, but if I were in private practice in the future I would certainly consider a non-insurance model. A GYN doing this could actually provide services that were much more economical than a participating physician. Participating physicians usually bill $250-$300 for an annual exam to insurance, but only get paid $75 or so. If a patient has insurance that does not cover annual exams, which is often the case if they have a non-HMO plan, they get charged the $300 for a visit and as much as $400 for the lab fees. Ultimately they pay way more _because_ they have insurance, which is completely BS. As a physician I don't like it either, but compliance rules prevents us from providing a lower rate to people who have bad insurance. A cash pay system would allow a GYN to charge a reasonable amount, say $125, for an annual visit, and maybe another $50 for the pap. The GYN could negotiate a rate with the lab to do all his/her paps for $40-$45 and end up making a few bucks on that as well. Physician would get paid a reasonable fee, the patient would pay less, and practice overhead would fall Both parties win. The only party that loses is the insurance company.

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