Genius, Jerk, or Both?

[ERMudPhud]

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How to beat the insurance industry

Hospitals sign contracts with insurance companies in part to assure themselves a steady stream of patients. In exchange for that business, however, the hospitals collect as little as 30% of their costs from the insurance companies. As insurers consolidate and get more powerful, hospitals say they have had to accept even less money.

A few months after buying it, Reddy said, he realized Desert Valley was losing about $7 million a year.

"Somewhere along the line, the insurance industry has gone bad," he said. "They want to pay $1,100 a day for patients that cost $1,700 to treat. They are bilking the system and getting rich at everyone else's expense."

While in his office one night, Reddy had an idea about how to make Desert Valley profitable. If his company canceled the hospital's private insurance contracts, it might be able to make up for the loss in patients by increasing traffic through the emergency rooms and admitting those who needed more care into his hospitals for longer stays.
To ensure business, Reddy said, he did everything he could to speed up care in his emergency room and treat as many patients as possible.

To save diagnostic time, the hospital had laboratory equipment moved to the ER. Emergency beds and medical staff were increased. Reddy demanded that patients be seen within 20 minutes of arrival. With few options, paramedics eagerly showed up because, unlike many hospitals these days, it was rarely too full to accept patients.

Insurers typically negotiate with hospitals to pay the smallest fee they can for each medical service, often much lower than what hospitals claim it costs. That sets up a two-tiered pricing system under which uninsured patients may pay two to three times more than insured patients for the same service.

Free of most contracts, Prime Healthcare's hospitals can collect the patient's entire bill, calculated at the higher rate, whether the patient has insurance or not. And, under state law, insurers must pay up.

At Desert Valley, for example, the hospital collected about $4,100 per patient per day in 2002, according to state data. In 2005, it took in about $10,000 per patient per day.

 

[tkim]

"A health school at Victor Valley College in Victorville and a lecture hall at Western University of Health Sciences in Pomona bear his name."

No comment.

 

[ForbiddenComma]

For-profit hospital chains vs. insurance companies...

It's like Hitler vs. Stalin all over again!

 

[MacGyver]

Its genius, its just too bad you cant implement this model in a small clinic. I'd be all over it if you could.

Of course faculty at med schools wont like this, they'll wag their fingers and bull**** us with how being a doctor is some kind of slave/servant job to the public and that we should be greatful for getting paid at all.

🙄

 

[dawg44]

Most Ortho Trauma Surgeons do something similar to this by accepting no insurance plans other than Medicare and Medicaid. An insured patient with a Acetabulum is a jackpot when you get what you charge. They usually don't have an elective practice anyway so not being on someones plan is no big deal.

 

[docB]

It's genius. If you can't negoiate decent contracts with the insurers tell them to get bent and go on your own. We recently had that happen on a large scale in Vegas when HCA (a national hospital corporation) dropped all it's contracts with HPN (a huge, local HMO). More power to them.

http://www.reviewjournal.com/lvrj_home/2007/Jan-01-Mon-2007/news/11662725.html

BUT! The insurance companies won't stand for it. It's not like they just say "Shucks, we better just pay up." No. They just stick it to their customers for going "out of network" if they end up in a non-contracted ED.

Just a side note about how the ED is the flash point for all these things. After HCA and HPN broke up my ED (not HCA) saw a big jump in census, and the stresses that entails, in the weeks following, as all the HPN patients had to come to us.

 

[po' boy]

This guy is a douche.

Basically, he decides what is medically necessary (like an insurance company), while at the same time charging higher rates for things that are profitable and reimbursable (like a fee-for-service provider). He's just cut out the middle man.