I just came across this website this morning. It is put together by a doctor in Austin, Tx.
Website: Medical Burnout
INDEMNITY INSURANCE (THE BEST)
This is the “traditional” form of health insurance which served well until the large insurance companies began to seize control of the health care delivery system in the past few years. Doctors billed either the patient or the insurance company for their normal charges, insurance then paid all or some portion of the fee, and the patient was responsible for the amount not paid by insurance. It was simple, straightforward, and it worked reasonably well for everyone. Critics can find flaws with any system; but the fact is that, overall, the overwhelming majority of patients and doctors were happy with this system; and that certainly cannot be said about the systems that have followed Indemnity Insurance in the past few years.
PREFERRED PROVIDER ORGANIZATION (PPO)
Under this system, doctors contract with an insurance company to accept specified reduced fees for their services; and the doctors also agree not to bill patients for the difference between their normal fees and what the insurance pays them. The insurance company then markets its group (or “panel”) of doctors to major employers to provide medical services at some lower cost to the employer than traditional Indemnity Health Insurance.
Because doctors under this sort of program are paid a fee (albeit discounted) each and every time they see a patient, their natural inclination is to encourage patients to come to the office for evaluation if they call in with some sort of medical problem. In this way, PPO’s are like Indemnity Insurance, because there is an incentive for doctors to actually see and examine their patients in person.
The “hook” concealed in this seemingly simple system is that once the majority of doctors in a community are signed up to provide their services at discounted fees to a number of insurance companies, the companies then get into bidding wars with each other as they compete for lucrative insurance contracts with large corporations. Of course, after underbidding the competition and getting the contract with a large employer (for example Dell Computer) for a year, the insurance company is certainly not going to reduce its own profit margin on the premiums; so the company simply turns to its panel of doctors and, without any negotiation, informs them that their reimbursements for their services have been reduced, say 10%, this year. Unfortunately, next year there will be another round of bidding between the insurance companies for Dell’s next insurance contract; and the doctors end up having their reimbursement reduced yet again.
And so it goes while, at the same time, the doctors’ overhead expenses (malpractice insurance, staff salaries, rent, supplies) continue to rise. Doctors are trained to fight disease, not how to play business hardball; and they’re getting eaten alive to the point that many are beginning to wonder how they’re going to cover their office overhead if current trends continue unabated for another year or two.
HEALTH MAINTENANCE ORGANIZATION (HMO)
This system completely eliminates traditional fee-for-service medicine in which doctors are paid for each patient visit. Instead, a doctor agrees to assume responsibility for a certain fixed number of a health plan’s patients; and the physician is paid a flat fee every month for each of the patients on his list, whether the doctor actually sees the patient that month or not. This is called a “capitated plan”, and a typical capitation amount might be $8 per patient per month. Thus if a doctor agrees to take on 500 of some plan’s patients, he is paid a flat $4,000 every month even if he never lays eyes on one of those people all month. HMO’s were originally conceived supposedly to give doctors an incentive to focus their energies on keeping patients well (as if they weren’t already doing that); so that their patients would need expensive medical care less often.
Of course, just the reverse happened as patients began to clamor for more doctor visits and tests which they now regarded as their “right” because it was all “free”.
The HMO concept totally ignores the fact that doctors come equipped with families to support and “human nature” just like everyone else. Place yourself in a doctor’s position. You’ve got a big, expensive office operation with high rent, salaries to pay for 3-4 employees, malpractice insurance, etc. Assume your total practice overhead expense averages $17,000/mo. (see Overhead) That means that in our standard model (which assumes the insurance plan has eliminated all payments for lab work) you must contract with an insurance plan to take on 2,125 of their patients just to break even on your overhead.
However, once any Primary Care medical practice grows to even 1,500 active patients, the doctor has to keep moving pretty fast all day long just to stay up with his scheduled appointments (if he’s doing a good job of doctoring). Unfortunately, with the HMO model we’re discussing, you’re now already up to 2,125 low-paying HMO patients; and you’re just barely making enough money to cover your overhead. In this model, if you’re going to have any personal income, you’re going to have to contract for at least another 500 patients in order to have a $4,000/mo (pre-tax) personal income. Now you’re really overloaded with 2,625 patients, most of them demanding care for minor problems because it’s “free” and they’re “entitled” to it, your appointment schedule is jam-packed for weeks in advance, your patients are frustrated and angry because they can’t get in to see you when they really need you, you’re evaluating and treating a lot of problems over the phone that you know you ought to be evaluating in person, and you’re running top speed on a treadmill and can’t slow down.
You’re stressed, your staff is stressed and curt, everyone’s attitude deteriorates. You know you’re a darned good doctor, but the fun of medicine and the joy of really knowing your patients and being involved in their lives has become a distant memory.
Welcome to “Managed Care”.
=====
I was looking for this information because during a conversation with my wife over the weekend, I mentioned to her two of the worst doctor visits I had ever had. The first one was in Atlanta, Ga. There was something going on with my knee, so I made an appointment with a local doctor. Long story short, after spending about 1/2 hour filling out paperwork, the actual appointment only lasted about 5 minutes. The only reason why it was that long was because I had (what I thought) some serious questions. I felt very rushed. If I remember correctly, my co-pay for that visit was around $125. My other visit was worse. This was a new doctor that I have never met, so I did not know what to expect. In short, from the first minute the doctor was already pissed off about something unrelated to me. He kept interrupting me and was very short with his responses to my questions. To me, his whole demeanor was “you big dummy, just shut up so that you can get yo’ ashy (you know what) up outta here. Finally, when his nurse came in the room, he began yelling at her–in front of me. As for my wife, we have decided a long time ago to use a dentist in the area that is not tied to the insurance companies in any way. Trust me, we aren’t rolling like that, but this is a move we had to make because she kept getting sub-standard care with doctors that took insurance coverage.
This is why I laugh when I hear people call for “free” health care. If you think the insurance companies are bad, how much better do you think the government can handle it?
Blackinformant.com Xtra! 