How does a hospital cut costs?

[DrMetal]

Tell me if I have this right . . .

When a hospital wants to cut costs (or increase income, go into the "black"):

- It can't cut services to nor refuse care to patients. That would be a PR disaster. It can't even bill patients who are uninsured, b/c patients are now running with said bills to the media, also creating a PR disaster. So the patients are off limits.

- It can't go after the pay of its non-physician staff (nurses, lab techs, MAs, etc), b/c these folks are often unionized, with rigid contracts. Quite frankly they're also in high demand, can easily pick up and go elsewhere. So the non-physician staff is also off limits.

- It can ask more gov't funding, more donor support. Ok, but there's always an upper limit to that.

So what's left to do? Go after your physician pay staff/contracts. Physicians are usually independent contractors (if not literally independent as an individual, then still independent in a contracted group, or the group is the independent entity). If a particular physician or group doesn't want to play ball, you just get rid of them (terminate or re-negotiate their contract with someone else). No love loss. No unions to deal with.

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[VA Hopeful Dr]

1. Buy cheaper supplies. If you can get LR for 10 cents cheaper per bag, that's probably tens of thousands of dollars.

2. Cut benefits. Ancillary staff aren't unionized everywhere, can argue that it hits all staff so its not singling out any group in particular. Retirement benefits are getting cut more and more often these days.

3. Negotiate more with non-government insurance. You hear about hospitals systems not taking certain insurances for a time quite frequently.

 

[NewYorkDoctors]

this is why for any physician whose specialty/subspeciality is not tied to a particular geographic hospital location or expensive equipment that only a hospital can reasonably provide (e.g. surgeons, ED physicians, intensivists, proceduralists), then try to join an IPA and start private practice ASAP. easier said than done but your independence means you are the administrator and you call the shots and control your own destiny.

or stick with the hospital and accept the pay cuts from the hands that feeds you. for some, time and work life balance is more important i guess

 

[DrMetal]

this is why for any physician whose specialty/subspeciality is not tied to a particular geographic hospital location or expensive equipment that only a hospital can reasonably provide (e.g. surgeons, ED physicians, intensivists, proceduralists), then try to join an IPA and start private practice ASAP. easier said than done but your independence means you are the administrator and you call the shots and control your own destiny.

or stick with the hospital and accept the pay cuts from the hands that feeds you. for some, time and work life balance is more important i guess

Is it really a good idea to have a small private practice? You're still a small fish in a big pond? Hospital can still mess with you in negotiating contracts and pay, no?

 

[gutonc]

Is it really a good idea to have a small private practice? You're still a small fish in a big pond? Hospital can still mess with you in negotiating contracts and pay, no?

What contracts and pay? If you’re PP, your contracts are with payers and patients. You may be on staff at a hospital and taking consults and/or call there, but in those cases, you’re just billing the patients directly as necessary.

 

[chessknt]

What contracts and pay? If you’re PP, your contracts are with payers and patients. You may be on staff at a hospital and taking consults and/or call there, but in those cases, you’re just billing the patients directly as necessary.

In some regions the hospitals own the major insurance plans as well (or vice versa) so that isn't inherently untrue. Insurers are buying medical practices and 'negotiating' lower rates with themselves the same way the insurer-owned hospitals 'negotiate' higher hospital payments to set averages that dictate payments nationwide in less captive markets. As insurers consolidate providers will be increasingly pressed to accept lower rates. The No Surprises Act sped up this process significantly by putting insurers over providers. Stark and Antitrust laws further strangle coordinated private practice efforts even with IPAs unless they are in a risk sharing model.

It is still ok right now but as everything begins to consolidate as the system collapses in the next 5-10 years docs will absolutely come out last.

 

[NotAProgDirector]

Through efficiency. If you switch physicians from 30 minute visits to 20 minute visits (so 3 patients/hr rather than 2), income goes up dramatically. Same if switch from 20 to 15. Add ambient listening tech in to help with notes, you still end up way ahead. Improve billing and coding - get paid more to do the same work.

 

[DrMetal]

1. Buy cheaper supplies.
2. Cut benefits.
3. Negotiate more with non-government insurance.

True, but all have upper limits with respect to savings.

What contracts and pay? If you’re PP, your contracts are with payers and patients. You may be on staff at a hospital and taking consults and/or call there, but in those cases, you’re just billing the patients directly as necessary.

Hospitals can still make 'contracts' or agreements with physicians. For instance, say the hospital has 2 cath labs. It asks all of its credentialed (PP) cardiologist to pay a "rent" for said cath labs (to pay for its cost, staff, etc). Any cardiologist (PP, or group) that doesn't want to "play ball" just wont use said cath lab, or wont work at said hospital.

In another example: say the hospital serves a large un-insured population, say its gets a gov't or private grant to do so (EA, whatever have you). It could "sell" or negotiate such a contract with a hospitalist group. lowest bidding group gets said contract.

So even though hospitals can't bill patients directly, they find a way to make money off of patient care, and that cut is usually taken somehow from the physician's bottom line.

In some regions the hospitals own the major insurance plans as well (or vice versa) so that isn't inherently untrue. Insurers are buying medical practices and 'negotiating' lower rates with themselves the same way the insurer-owned hospitals 'negotiate' higher hospital payments to set averages that dictate payments nationwide in less captive markets. As insurers consolidate providers will be increasingly pressed to accept lower rates. The No Surprises Act sped up this process significantly by putting insurers over providers. Stark and Antitrust laws further strangle coordinated private practice efforts even with IPAs unless they are in a risk sharing model.

It is still ok right now but as everything begins to consolidate as the system collapses in the next 5-10 years docs will absolutely come out last.

100% True, unfortunately.

Through efficiency. If you switch physicians from 30 minute visits to 20 minute visits (so 3 patients/hr rather than 2), income goes up dramatically. Same if switch from 20 to 15. Add ambient listening tech in to help with notes, you still end up way ahead. Improve billing and coding - get paid more to do the same work.

Throw in there the power of AI generated notes and nurse-driven protocols, and we (physicians) may have no role in the future except to sign charts!

 

[HemeOncHopeful19]

What contracts and pay? If you’re PP, your contracts are with payers and patients. You may be on staff at a hospital and taking consults and/or call there, but in those cases, you’re just billing the patients directly as necessary.

Hospital can still threaten to drop your privileges if you won’t go employed (although I think they’re not supposed to if non-profit)

 

[bronx43]

Tell me if I have this right . . .

When a hospital wants to cut costs (or increase income, go into the "black"):

- It can't cut services to nor refuse care to patients. That would be a PR disaster. It can't even bill patients who are uninsured, b/c patients are now running with said bills to the media, also creating a PR disaster. So the patients are off limits.

- It can't go after the pay of its non-physician staff (nurses, lab techs, MAs, etc), b/c these folks are often unionized, with rigid contracts. Quite frankly they're also in high demand, can easily pick up and go elsewhere. So the non-physician staff is also off limits.

- It can ask more gov't funding, more donor support. Ok, but there's always an upper limit to that.

So what's left to do? Go after your physician pay staff/contracts. Physicians are usually independent contractors (if not literally independent as an individual, then still independent in a contracted group, or the group is the independent entity). If a particular physician or group doesn't want to play ball, you just get rid of them (terminate or re-negotiate their contract with someone else). No love lost. No unions to deal with.

There’s really only so much you can cut physician pay and contracts, and usually the cuts don’t amount to much. On the outpatient side, independent practices set the floor for how low employed compensation can go.

What I’ve seen from hospitals is that many are drastically increasing prices on non government payer ancillary services. There are hospitals near me that charge $1000+ for an ultrasound. CT’s are routinely $1500 or more, and some MRIs are multiple thousands. These prices are several times or an order of magnitude higher than prices paid by Medicare. No longer are we talking about 120-150% of Medicare. I suspect similar pricing schemes are happening for procedural facility fees. At the end of the day, hospitals mainly make money off two things - ancillaries and facility fees. They don’t care at all about measly professional fees that physicians get.

Now that hospital prices are disclosed, one can easily search what insurance negotiated prices are for each service.

From the insurers’ standpoint, they don’t really care how high the prices are. Most patients don’t hit their deductible and end up paying out of pocket for those services.

 

[dozitgetchahi]

Tell me if I have this right . . .

When a hospital wants to cut costs (or increase income, go into the "black"):

- It can't cut services to nor refuse care to patients. That would be a PR disaster. It can't even bill patients who are uninsured, b/c patients are now running with said bills to the media, also creating a PR disaster. So the patients are off limits.

- It can't go after the pay of its non-physician staff (nurses, lab techs, MAs, etc), b/c these folks are often unionized, with rigid contracts. Quite frankly they're also in high demand, can easily pick up and go elsewhere. So the non-physician staff is also off limits.

- It can ask more gov't funding, more donor support. Ok, but there's always an upper limit to that.

So what's left to do? Go after your physician pay staff/contracts. Physicians are usually independent contractors (if not literally independent as an individual, then still independent in a contracted group, or the group is the independent entity). If a particular physician or group doesn't want to play ball, you just get rid of them (terminate or re-negotiate their contract with someone else). No love loss. No unions to deal with.

Not sure I agree with a lot of this.

Hospitals absolutely cut services to patients, try to change up their payor mix, stop offering service lines that aren’t profitable, etc etc. The legality of some of that may be questionable, but that doesn’t mean that hospitals aren’t doing it.

Hospitals absolutely cut pay of ancillary staff. All the time. In many places, these staff aren’t unionized and there’s nothing keeping the hospital from doing that.

There’s really only so much you can cut physician pay and contracts, and usually the cuts don’t amount to much. On the outpatient side, independent practices set the floor for how low employed compensation can go.

What I’ve seen from hospitals is that many are drastically increasing prices on non government payer ancillary services. There are hospitals near me that charge $1000+ for an ultrasound. CT’s are routinely $1500 or more, and some MRIs are multiple thousands. These prices are several times or an order of magnitude higher than prices paid by Medicare. No longer are we talking about 120-150% of Medicare. I suspect similar pricing schemes are happening for procedural facility fees. At the end of the day, hospitals mainly make money off two things - ancillaries and facility fees. They don’t care at all about measly professional fees that physicians get.

Now that hospital prices are disclosed, one can easily search what insurance negotiated prices are for each service.

From the insurers’ standpoint, they don’t really care how high the prices are. Most patients don’t hit their deductible and end up paying out of pocket for those services.

Yeah. Exactly. One of my patients showed me a bill from the hospital across town recently…$10k for a tilt table test. Lmao.

The fact that hospitals stay afloat on ancillaries is part of the reason that hospitals don’t give physicians a dime of that income. (That, and Stark laws supposedly are part of it, but I’m not sure how much I believe that given that PPs don’t seem to have the same issue.)

 

[bronx43]

Not sure I agree with a lot of this.

Hospitals absolutely cut services to patients, try to change up their payor mix, stop offering service lines that aren’t profitable, etc etc. The legality of some of that may be questionable, but that doesn’t mean that hospitals aren’t doing it.

Hospitals absolutely cut pay of ancillary staff. All the time. In many places, these staff aren’t unionized and there’s nothing keeping the hospital from doing that.



Yeah. Exactly. One of my patients showed me a bill from the hospital across town recently…$10k for a tilt table test. Lmao.

The fact that hospitals stay afloat on ancillaries is part of the reason that hospitals don’t give physicians a dime of that income. (That, and Stark laws supposedly are part of it, but I’m not sure how much I believe that given that PPs don’t seem to have the same issue.)

lol, $10k for tilt table
$500 physician fee.
$9.5k facility fee.

My patient got quoted >$1000 for an abdominal US. Medicare pays $116.

We are at end stage healthcare.

 

[DrMetal]

Hospitals absolutely cut services to patients, try to change up their payor mix, stop offering service lines that aren’t profitable, etc etc. The legality of some of that may be questionable, but that doesn’t mean that hospitals aren’t doing it.

Homeless guy shows up to the ER in STEMI, hospital refuses to admit him and cath him? Has multi-vessel disease, hospital refuses him the CABG? Has ESRD, refuses him HD?

Not in the grand ole U.S. of A. Our tax dollars go to work. Sure they may refuse him outpatient cardiac rehab, but the main job gets done.

But the hospital will have no problem charging ridiculous "rent" (or other financial stipulations) to that cardiologist or surgeon.

 

[chessknt]

Homeless guy shows up to the ER in STEMI, hospital refuses to admit him and cath him? Has multi-vessel disease, hospital refuses him the CABG? Has ESRD, refuses him HD?

Not in the grand ole U.S. of A. Our tax dollars go to work. Sure they may refuse him outpatient cardiac rehab, but the main job gets done.

But the hospital will have no problem charging ridiculous "rent" (or other financial stipulations) to that cardiologist or surgeon.

The hospitals don't charge rent unless you are renting an office space. They charge credential fees/staff dues and might be paying a call stipend but that is it. Where they kill proceduralists is with massive staff turnover by paying rock bottom wages so everyone is inexperienced and room turnover is slower than the procedure itself killing efficiency.

For your homeless guy they'll get emergency Medicaid and their half million in facility fees for all that so they always come out ahead. The reason they can't turn a profit is the admin bloat sucking all the money out of the facility. If the net profit from facility fees were distributed to the only the people involved in generating it (from cleaning staff to physician) the hospital would be running at light speed and those people would all be worth 7-8 figures within 10 years.

 

[DrMetal]

The hospitals don't charge rent unless you are renting an office space.

" credential fees/staff dues . . . massive staff turnover by paying rock bottom wages so everyone is inexperienced and room turnover is slower than the procedure itself killing efficiency " == "rent" , or whatever you wanna call it.

 

[gutonc]

Just to be clear, med staff dues do not go to the hospital, they go to the med staff committee, made up, believe it or not, of physicians, doing the best they can to make life good for the physicians in the hospital.

In my prior position, about 10-15% of that went to cover costs (stipends for the physicians doing the work) while the rest went to support physicians on the med staff.

 

[dozitgetchahi]

The hospitals don't charge rent unless you are renting an office space. They charge credential fees/staff dues and might be paying a call stipend but that is it. Where they kill proceduralists is with massive staff turnover by paying rock bottom wages so everyone is inexperienced and room turnover is slower than the procedure itself killing efficiency.

For your homeless guy they'll get emergency Medicaid and their half million in facility fees for all that so they always come out ahead. The reason they can't turn a profit is the admin bloat sucking all the money out of the facility. If the net profit from facility fees were distributed to the only the people involved in generating it (from cleaning staff to physician) the hospital would be running at light speed and those people would all be worth 7-8 figures within 10 years.

Oh yeah.

If you look up the nonprofit filings for the hospital across town - same one charging $10k for a tilt table test - no admin person makes less than $700k.

 

[TooMuchResearch]

True, but all have upper limits with respect to savings.



Hospitals can still make 'contracts' or agreements with physicians. For instance, say the hospital has 2 cath labs. It asks all of its credentialed (PP) cardiologist to pay a "rent" for said cath labs (to pay for its cost, staff, etc). Any cardiologist (PP, or group) that doesn't want to "play ball" just wont use said cath lab, or wont work at said hospital.

In another example: say the hospital serves a large un-insured population, say its gets a gov't or private grant to do so (EA, whatever have you). It could "sell" or negotiate such a contract with a hospitalist group. lowest bidding group gets said contract.

So even though hospitals can't bill patients directly, they find a way to make money off of patient care, and that cut is usually taken somehow from the physician's bottom line.



100% True, unfortunately.



Throw in there the power of AI generated notes and nurse-driven protocols, and we (physicians) may have no role in the future except to sign charts!

Hey I still have the occasional actual emergency in which I save someone's life.

Beyond that I'm just churning out widgets in the widget factory.

 

[dozitgetchahi]

Just to be clear, med staff dues do not go to the hospital, they go to the med staff committee, made up, believe it or not, of physicians, doing the best they can to make life good for the physicians in the hospital.

In my prior position, about 10-15% of that went to cover costs (stipends for the physicians doing the work) while the rest went to support physicians on the med staff.

Meh.

I’m happy to not be part of a hospital system anymore. Too many people putting their hands in the pot asking for more money that should actually be coming to me.

(Then again, at my PP they’re constantly hounding us to donate to the PP “foundation” that supposedly does charitable giving…so yeah. But at least that’s optional, and nobody is demanding that I cough up money to keep a lounge stocked with ****ty food that I’m not interested in eating anyway, keep call rooms nice that I never use because I don’t take call and don’t go to the hospital, etc. But I digress.)

 

[gutonc]

Meh.

I’m happy to not be part of a hospital system anymore. Too many people putting their hands in the pot asking for more money that should actually be coming to me.

(Then again, at my PP they’re constantly hounding us to donate to the PP “foundation” that supposedly does charitable giving…so yeah. But at least that’s optional, and nobody is demanding that I cough up money to keep a lounge stocked with ****ty food that I’m not interested in eating anyway, keep call rooms nice that I never use because I don’t take call and don’t go to the hospital, etc. But I digress.)

That's a fair enough critique. My point was simply that this particular pot of money doesn't specifically go to those "greedy hospital bastards" we all love to hate.

 

[HemeOncHopeful19]

That's a fair enough critique. My point was simply that this particular pot of money doesn't specifically go to those "greedy hospital bastards" we all love to hate.

I think this has come up before but making physicians pay “med staff dues” makes about as much sense as having the cleaning staff buy their own soap and mops, or the nurses bring their own bandages.

The cost of running a hospital should be paid for by… the hospital. That’s what those facility fees are supposed to cover!

 

[Splenda88]

94 yo F with advanced dementia and other stuff. Had ground level fall

You know the ED doc will do a million $ workup.

Head CT reveals bunch of lytic lesions in the calvarium

Spoke with family and told them there is a chance she might have cancer somewhere. And if they want to pursue treatment if indeed she has cancer.

Family said no they won't but they want us to do all workup.

Workup shows a bladder mass and also probable myeloma

Family still want us to a cystoscopy.

How do you cut cost in the face of these insane demands?

 

[chessknt]

94 yo F with advanced dementia and other stuff. Had ground level fall

You know the ED doc will do a million $ workup.

Head CT reveals bunch of lytic lesions in the calvarium

Spoke with family and told them there is a chance she might have cancer somewhere. And if they want to pursue treatment if indeed she has cancer.

Family said no they won't but they want us to do all workup.

Workup shows a bladder mass and also probable myeloma

Family still want us to a cystoscopy.

How do you cut cost in the face of these insane demands?

You shift financial responsibility on to the patient and family once somebody passes the average life expectancy in the USA (or if you want to be more pragmatic we need death panels staffed by a pool of volunteer physicians as a condition of being licensed like a jury selection). Cysto costs CMS in a hospital 30-50k + another 2-5k in anesthesia/path charges--ask them for cash or a second lien position on their home to continue care and see if suddenly priorities change.

The boomers are going to be much worse, they as a group seemingly have no regard for their drain on resources so I anticipate nothing will be left by the time they all die.

 

[voxveritatisetlucis]

Replacing doctors with NPs (or even just regular nurses) with AI assistance. This is coming unless doctors do something like the longshoremen

 

[aafisahar]

Tell me if I have this right . . .

When a hospital wants to cut costs (or increase income, go into the "black"):

- It can't cut services to nor refuse care to patients. That would be a PR disaster. It can't even bill patients who are uninsured, b/c patients are now running with said bills to the media, also creating a PR disaster. So the patients are off limits.

- It can't go after the pay of its non-physician staff (nurses, lab techs, MAs, etc), b/c these folks are often unionized, with rigid contracts. Quite frankly they're also in high demand, can easily pick up and go elsewhere. So the non-physician staff is also off limits.

- It can ask more gov't funding, more donor support. Ok, but there's always an upper limit to that.

So what's left to do? Go after your physician pay staff/contracts. Physicians are usually independent contractors (if not literally independent as an individual, then still independent in a contracted group, or the group is the independent entity). If a particular physician or group doesn't want to play ball, you just get rid of them (terminate or re-negotiate their contract with someone else). No love loss. No unions to deal with.

Premise is wrong.

They tried to cut back hospitalists at my shop for np/pas and it back fired. Specialists weren't happy and LOS increased dramatically.

Hospitals cut costs by cutting down services (look at ob) and non-physician staff. For example, pt/ot have been gutted here and everyone gets rec'd to go to snf. I'm sure some of them could rehab to home but we don't have the staff to have multiple visits in a hospitalization. So it's one evaluation, see they are weak, and rec to snf or acute rehab. RN ratios are a disaster. It's like 6-8:1 on the floors and 4:1 in the Pcu.

Its certainly not physician pay. We renegotiated our contract and got like an 8% pay bump and 2% bump/yr, so that partners make like 800k in cardiology. This is despite Medicare cuts because it's only the physician portion that got cut, payments to hospitals actually went up. So if they need cardiology services, they need a cardiologist, and thus need to hold on to us. We start new hires now at 500k, just 3 years when I started, new hires were at 400k.

 

[Splenda88]

Premise is wrong.

They tried to cut back hospitalists at my shop for np/pas and it back fired. Specialists weren't happy and LOS increased dramatically.

Hospitals cut costs by cutting down services (look at ob) and non-physician staff. For example, pt/ot have been gutted here and everyone gets rec'd to go to snf. I'm sure some of them could rehab to home but we don't have the staff to have multiple visits in a hospitalization. So it's one evaluation, see they are weak, and rec to snf or acute rehab. RN ratios are a disaster. It's like 6-8:1 on the floors and 4:1 in the Pcu.

Its certainly not physician pay. We renegotiated our contract and got like an 8% pay bump and 2% bump/yr, so that partners make like 800k in cardiology. This is despite Medicare cuts because it's only the physician portion that got cut, payments to hospitals actually went up. So if they need cardiology services, they need a cardiologist, and thus need to hold on to us. We start new hires now at 500k, just 3 years when I started, new hires were at 400k.

My group has a ~25% discharge quotient quarterly. A few of these docs d/c quotient are ~35%. It's been like that since I have been there (3 yrs). We have 4 NP/PA and 16-18 docs. There is no freaking way NP/PA can do that if they replace all these docs with NP/PA. Our level III trauma is in the south (poor county with median household income of 52k).

Now it's time for them to give me another 20k raise like they did last year.

 

[voxveritatisetlucis]

My group has a ~25% discharge quotient quarterly. A few of these docs d/c quotient are ~35%. It's been like that since I have been there (3 yrs). We have 4 NP/PA and 16-18 docs. There is no freaking way NP/PA can do that if they replace all these docs with NP/PA. Our level III trauma is in the south (poor county with median household income of 52k).

Now it's time for them to give me another 20k raise like they did last year.

What about NPs plus AI. Just feed it an unidentified note without assessment and plan of a complex patient and it will likely come up with a good assessment and plan

 

[CCM-MD]

The corporate group job I left in AZ was being increasingly dominated by hospitalist NPs. Consultant driven madness. Frequent ICU consults for floor patients that were remotely sick. The patients with a clear diagnosis were managed fine, but anyone that was undifferentiated or didn't easily fit one of the common diagnoses suffered tremendously. The hospital or the corporate group didn't give a crap. They were focused on maximizing revenue from CT surgery and neurosurgery.

 

[DrMetal]

There is no freaking way NP/PA can do that if they replace all these docs with NP/PA.

20 years ago, it was said there's no way an NP/PA could work in a hospital. Now they're in the ER, on HF services, in the ICU, in the OR.

Meh . . . I hope you guys are right. But I don't have much hope for the profession of 'physician'.

 

[voxveritatisetlucis]

Most doctors are spineless and they gladly supervise NP students for a chance to spend a few weeks with an attractive 22yo who probably laughs at them behind their backs

 

[dozitgetchahi]

Most doctors are spineless and they gladly supervise NP students for a chance to spend a few weeks with an attractive 22yo who probably laughs at them behind their backs

It’s sad but true.

 

[VA Hopeful Dr]

I don't know any physicians who supervise NP students. Most in my area don't even want to supervise med students and we get paid for that.

 

[sloh]

Don't know exactly what forum to post this in but this thread seems fitting:

How Taxpayers Are Helping Health Insurers Make Even Bigger Profits

Local governments often face extra fees when employees get out-of-network medical care, but some don’t track the insurance charges or even know about them.

www.nytimes.com

"Health insurers have made an enticing pitch to local governments across the country: When your workers see doctors outside your health plan’s network, costs can balloon, but we offer a program to protect against outrageous bills.

Cities, counties and school districts have signed up, hoping to control the costs of their medical benefits.

Then come the fees.

Behind the fees is a little-known partnership between major insurers — including UnitedHealthcare, Cigna, Aetna and Elevance Health — and a data analytics firm called MultiPlan.

An investigation by The New York Times in April found that together the insurers and MultiPlan cut payments to medical providers, then take a share of the purported savings for themselves, sometimes leaving patients with larger-than-expected bills to make up the difference.

In some instances, the fees are costlier than the medical treatment itself. The records show that Hoboken paid an obstetrician gynecologist $292.88, less than half the $629.14 the city paid in fees to the UnitedHealthcare subsidiary UMR to handle the claims. Kitsap County, Wash., paid Aetna roughly $7,000 for handling a $16,000 bill that the insurer reduced to $2,000.

When a patient sees an out-of-network medical provider, the insurer often sends the claim to MultiPlan, a New York-based analytics firm that recommends what it determines is a fair payment. The difference between the original bill and the amount ultimately paid is what the insurer says it saved the employer. The insurer and MultiPlan each collect a percentage of that savings as a fee. Lower payments mean greater savings, which can yield higher fees — a particular sore point for critics of the arrangement.

A third of the respondents said they had no documentation of the fees and acknowledged that they didn’t know what they were paying.

Anthem had sent the claims to MultiPlan and ultimately decided that fair payment was $287,667.30, less than a quarter of the billed amount. The insurer then charged the counties nearly that much in so-called savings fees: $259,089.74.

“What they’re trying to say is, ‘Look how much it saved you,’ but that’s really not a savings,” Ms. Magill said. She noted that out-of-network providers often set high list prices that they know are rarely paid in full.

“I don’t like it morally, conceptually,” said one benefits manager for a small Midwestern town who feared that speaking publicly would sour the town’s relationship with the insurer. She said that a broker hired to help manage the town’s plan had told her the cost-containment program was “not something you can opt out of.”

“It just feels like it’s Whac-a-Mole — there’s one more revenue stream that the insurance company wants and they create,” said Ms. Britton, the Denver benefits manager. “And so, OK, what else is out there that we’re missing?”

 

[end stage fibro]

True, but all have upper limits with respect to savings.

indeed...saving money in healthcare isn't done in one fell swoop but 100s of cuts. i think everyone summed it up above, but here are some real world examples on how to save money:
1) i used to have an HSA match. Company decided to stop the match for everyone making >$X. Projected savings over a million bucks/year. thats ok i would rather just go to fidelity directly.
2) something about not using guaranteed CMV negative blood (sorry wasn't really paying attention). I trust the guy who executed this idea so i assume it is safe. save about 800k a year
3) every few years, restructure the org to cut a few bigwigs. this happened at my shop a few years ago...i think about 1.5 mil saved a year, not sure.
4) push everything possible outpatient
5) a WHOLE BUNCH of cockamammie schemes to make sure CMS doesn't penalize you. start documenting "history of covid-19" on all your MI, chf,pna,copd, inpt hips/knee replacement DRGs and your CMO will love you. start parterning with your PCP/cards to give subq lasix in office with POC bmp. better level-up some community paramedics. better figure out how to block CT time for the SNF down the road so they can directly image patients instead of sending to the ED.
6) cut your consulting companies- a few million saved, give or take.

we know intuitively that we meat popsicles are expensive (everyone, not just doctors). more formally, baumol's cost disease tells us that the labor prices in medicine are going to keep going up, in an absolute sense and proportional sense, usurping gains made by investing in profitable tech. You can slow this down by having increased floor nursing ratios, replacing MDs with NP, etc. However, the reality of medicine is that you're gonna need bodies to perform the medicine, at least until chatGPT gets installed in Epic and the daVincis. again, easier to cut a few top brass instead of 50 nurses.

More and more emphasis is being placed on generating money:
1) see more patients, duh
2) convert place of service charges. hospital clinics, which use to generate a pitiful charge, are now "hospital outpatient departments," which generate more money (and are much more expensive)
3) wring every last diagnosis out of your note to max the DRG
4) physician services agreements. hospital collaborates with the chad service lines- ortho, cards, onc, nsgy- to run administrative service. the MDs like it because they get more money per unit of service
5) you need to be ruthless with your group purchasing organization. going through your formulary and arguing over cents for every product is an ordeal...but necessary. one of the defectors from the big box shop across the street said that the big box group gets paid 20% more on average for every lap chole. yikes...how do we compete with that?
6) relying on your associated charitable foundation to cover services that scum insurance payors don't cover- pediatric ST, cardiac rehab, etc.
7) fight fight fight denials. every penny. if you have a competent end stage fibro working for you, this should net a million plus a year.


the average hospital system likes to be within 3-6% operating margin. my system is at the top end of that but fights like hell to get there, and thats with being lucky to have a very good payor mix.

i am not a subject matter expert here but do work with rev cycle sometimes.

 

[DrMetal]

indeed...saving money in healthcare isn't done in one fell swoop but 100s of cuts.

I need a drink, and it's not even noon (west coast).

 

[NewYorkDoctors]

well I just hope RFK Jr will do his best to make changes to the American diet and physical education regimen and the next generation of Americans of all backgrounds (I am not caucasian everyone) can be healthier so we can finally focus on prevention?

 

[end stage fibro]

Dude we are getting rid of toxic fluoride and preservative laden vaccine nostrums…all diseases of civilization will be prevented.

 

[NewYorkDoctors]

Dude we are getting rid of toxic fluoride and preservative laden vaccine nostrums…all diseases of civilization will be prevented.

gotta start somewhere!

im more interested in getting rid of processed foods in the American diet

Stop the futile cycle (waste of ATP...) between shuttling patients between Big Food, Big Pharma, and Big Medicine!

As doctors are totally unable to get more than a handful of patients onto an exercise regimen and "healthy diet."

The Rockefeller University group and other obesity medicine research groups who study have done lots of research showing that isocaloric diets comparing "healthy unprocessed" foods with ultraprocessed foods finds the latter leads to more weight gain due to more cravings to eat more calories.

Effect of reducing ultraprocessed food consumption on obesity among US children and adolescents aged 7–18 years: evidence from a simulation model | BMJ Nutrition, Prevention & Health

processed foods gain more weight - Search Results - PubMed

processed foods gain more weight - Search Results - PubMed

pubmed.ncbi.nlm.nih.gov

 

[chessknt]

well I just hope RFK Jr will do his best to make changes to the American diet and physical education regimen and the next generation of Americans of all backgrounds (I am not caucasian everyone) can be healthier so we can finally focus on prevention?

Yea some administrator is going to fix the American diet by... doing what exactly? Everyone already knows what is bad for them. Mandate specific foods? ban others? That doesn't sound very conservative at all.

He may get your coverage for vaccines pulled by CMS though.

 

[NewYorkDoctors]

Yea some administrator is going to fix the American diet by... doing what exactly? Everyone already knows what is bad for them. Mandate specific foods? ban others? That doesn't sound very conservative at all.

He may get your coverage for vaccines pulled by CMS though.

time will tell.

im not white, MAGA, or religious. I am non-white, new york city all my life centrist-left i guess like kennedy, and an athetist (I find the woke left who worship their Satan deity as sanctimonious as the pious Christian right). not everyone who voted for Trump is a "MAGA-chud" lol.

but I would like to see what any politician who is seriously about getting rid of the corruption - primarily lobbyists greasing the hands of politicians to let them sell unhealthy foods to people from a young age.

obesity is not really a "choice persay." the dopamine reward centers are all messed up (like a gambler or drug addict. there are plenty of f-MRI studies on this topic) and they have leptin resistance. Add on processed chemicals to enhance flavor (despite being isocaloric to an equivalent unprocessed meal) and it's a losing battle. (When I ate Taco Bell for the first time back in college I thought OMFG THIS IS SO GOOD THEY MUST PUT CRACK IN THIS lol) Obesity ensures. No one can fight that. Sure GLp1 agonists and bariatric surgery help. but the bariatric literature shows significant weight regain down the line anyway. spend.. Then grow old get sick rely on big pharma meds to keep them going... then get their cardiac caths (that we pulmonologists laugh about all the time)... then end up in our ICUs, we are struggling to put in central lines and A lines, and we wonder "why the heck didnt this patinet get preventative care sooner!!!!"

the chain has to be cut far earlier on. im interested to see where this goes.

addendum:

1) yes agreed. no more selling out our patients to big pharma. why even bother with statins for primary prevention (secondary is a different story) when improving the food supply and getting someone to exercise daily is important? RFK is 69 and pounds the weights! Sure he might be on TRT probably... but still you still need to pound the iron! I have a home gym. i use it all the time. it's very important for a doctor to stay in shape or else that doctor really should not be giving health advice about the lifestyle diseases honestly.

2) yes give the keys BACK to the UNCOMPROMISED doctors / researchers. We want EBM with absolute risk reduction cited and not relative risk reduction cited (isn't this what we teach at journal club to interns residents all the time?)

3) Yes improve the food and exercise from a young age and help reduce the chronic lifestyle disease epidemic.

Dont get me wrong I don't want my patients using anything whether big pharma meds or that "holistic junk that is not reserached" if possible.
But for certain diseases that need medications (like CFTR modulators for CF which is an inborn genetic issue), then you need it.

BUt the vast majority of meds doctors prescribe are really just not really treating the root cause of disease. This is what we preached all the time
sure RFK is not an MD. but this is the first time I have seen any sincere attempts in Washington to help change policy and not just try to apply bandages (i.e. super size soda ban in NYC years ago...)