Should doctors work for hospitals?

[drusso]

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http://www.theatlantic.com/health/archive/2014/05/should-doctors-work-for-hospitals/371638/

"Leakage," "Alignment," "Revenue Capture."

"Of course, there are other factors. One is the ability to hospitals to charge more for a variety of procedures than independent physicians, by tacking on “facility fees.” By buying a physician practice, a hospital can charge more for the same test or procedure, even though it is performed in the same place by the same physician. In some cases, such facility fees can raise prices to Medicare by as much as 70 percent compared to what would be paid to an independent physician."

What really drives these employment arrangements is the ability for hospital administrators (RN's and non-MD/DO's) to control doctors' work and careers. I don't know why others are willing to sacrifice their professional independence to work for those who are not trained to the same educational and professional standards. And, I'm curious how those accepting of that arrangement are deceived into believing that the site of service differntial is ethical.

 

[hyperalgesia]

It's this umbilical cord... I.. can't.. break.. free...

 

[101N]

Kaiser has divided power among the health plan, the hospitals, and the physician groups. The three branches of government provide some checks and balances, much like our federal system.

 

[Ducttape]

And, I'm curious how those accepting of that arrangement are deceived into believing that the site of service differntial is ethical.

if the Mobil gas station on one corner is charging $3.99/gallon, and a Valero gas station on the other is charging $2.99, does that mean that Exxon is unethical?

any private practice office that does not overbill insurance is clearly an outlier. is it ethical to overbill?

first, there are no ethics in business. and what ethical concern is it for a HOPD that is billing what is allowed by the government for government sponsored care, just like a private office doing the same with private insurance?

if you want to raise ethics regarding the site of service differential, that is government determined. yes, abuse does occur (HOPD really should only be within 500 yards of a hospital, not "offsite".)

unquestionably, they realize that private practices will not see the vast majority of the 20+% of the US population that is on medicaid.

 

[drusso]

unquestionably, they realize that private practices will not see the vast majority of the 20+% of the US population that is on medicaid.

I'm sure they would if they were paid hospital HOPD rates...

 

[Ducttape]

just to clarify... the doctors working at HOPD are not paid that rate. the doctors are paid less than those in office.


but you knew that

 

[lonelobo]

if the Mobil gas station on one corner is charging $3.99/gallon, and a Valero gas station on the other is charging $2.99, does that mean that Exxon is unethical?

any private practice office that does not overbill insurance is clearly an outlier. is it ethical to overbill?

first, there are no ethics in business. and what ethical concern is it for a HOPD that is billing what is allowed by the government for government sponsored care, just like a private office doing the same with private insurance?

if you want to raise ethics regarding the site of service differential, that is government determined. yes, abuse does occur (HOPD really should only be within 500 yards of a hospital, not "offsite".)

unquestionably, they realize that private practices will not see the vast majority of the 20+% of the US population that is on medicaid.

I am assuming that you meant Mobil=hospital(higher charges), Valero=PP

And who determines what you would consider overbilling?

 

[emd123]

Should doctors work for hospitals?

No.

It's the ultimate monopoly the hospitals are drooling over, and is toxic as hell. It should be outlawed (and I think used to be).

 

[Aether2000]

Productivity and physician retention are linked thereby promoting excessive numbers of lab tests/imaging/internal referrals. Hospitals frequently charge facility fees for physician office visits. Hospitals are exempted from stark laws. Add all this together with a captive patient population without up front pricing available produces the massive overcharges, complete lack of ethics, and demise of health care in the us.

 

[drusso]

Productivity and physician retention are linked thereby promoting excessive numbers of lab tests/imaging/internal referrals. Hospitals frequently charge facility fees for physician office visits. Hospitals are exempted from stark laws. Add all this together with a captive patient population without up front pricing available produces the massive overcharges, complete lack of ethics, and demise of health care in the us.

Algos,

You're right: The part of the scheme that is rarely discussed is that it would not be possible for hospitals to accoplish this without bringing physicians along. Hospitals have been chipping away at this since Nixon signed Senate Bill 13 in 1973 authorizing these kind of employment arrangments and insurance structures. Even in his own press release, he realized that he may have over-reached, "Expanding the geographic distribution of health maintenance organizations is an integral part of the National Health Strategy that I first proposed nearly 3 years ago. S. 14 is somewhat broader than the Administration's proposal, but it nevertheless contains the essential concepts and principles that I support." Only later we would learn (from his own tapes) that his real impetus for pushing this particular national issue was that he believed that it would help him win the "urban vote." He was not a fan of Henry Kaiser nor particularly sympathetic to doctors nor the AMA.

Fast forward 40 years and we see that the hospital lobby is still voracious in its actions to consolidate control of health care delivery. Those who do not know history are doomed to repeat it. This history (the de-professionalizaton of medicine in order for large hospital entities to gain monopolizing power) is not taught in medical schools and fully known by few. Individual medical school graduates believe that they are making personal employment decisions based upon a variety of factors (lifestyle, pay, geography, etc) but don't realize that by virtue of those same choices they are also taking a stakeholder position in a broader battle over what kind of profession medicine should be. Those of us in Deep Blue states already recognize a state-sanctioned cronyism around how ACO's are structured and governed. That cronyism becomes "hard-wired" in information technology platforms, access to ancillary health care services, site of service payment differentials, peer review, credentialing, provider networks, and insurance contracts.

In other words, "The cake is a lie."

 

[SSdoc33]

.

 

[SSdoc33]

many PPs do this same sort of nonsense. unneccessary tests. unnecessary procedures. does it cost the system a bit less? probably. but this waste is inevitable in a fee-for-service model. big hospitals are part of the problem. certainly not the biggest part

 

[GalenVesalius]

I'm so glad that this thread was started. I had been contemplating starting a similar thread on this topic. I'm finding it fascinating to learn about how hospitals went from "St Holy Memorial University Affiliated Hospital", where your internist or family physician sent you when you could not be treated at home or with frequent visits to (or from) him/her or where the general surgeon admitted you when he/she needed to perform an operation that required inpatient stay, to transforming into the "St Holy Memorial University Affiliated Health System", which is no longer simply a place to receive inpatient treatment from your physician, but a massive business enterprise that has consolidated nearly all aspects of healthcare delivery. This has left many physicians in a position of "if you can't fight 'em..." while, at the same time, a generation of physicians is coming into practice who are lured by the sight, smell, and taste of "cake" (to borrow an above poster's metaphor). Of course it sounds appetizing to have someone else deal with overhead, billing, staffing, providing a patient base, a place to send patients for tests, and specialists to whom you can refer without the need to do marketing/networking. All the while, you collect a salary and practice what you went to school for, right? Except that when you get down to the filling, the taste changes a bit. Not that large and ever-expanding healthcare systems are the enemy, we should remember that we physicians share part of the blame for how this came to pass. We must, however, be cognizant of its impact on our profession: something obvious and salient at the same time. This transformation (hospital -> health system) has also helped to influence the specialty choices of medical students, the salary differentials of various specialists, and the role of non-physician healthcare providers (all of which are the hot button topics on virtually every SDN thread). Fascinating. I have to run, but please, keep the conversation going.

 

[ampaphb]

Any private practice office that does not overbill insurance is clearly an outlier.

You are confusing what we CHARGE and what we COLLECT. Private practices typically CHARGE 2-3x Medicare rates. We are lucky if they COLLECT 125% of Medicare.

 

[Ducttape]

You are confusing what we CHARGE and what we COLLECT. Private practices typically CHARGE 2-3x Medicare rates. We are lucky if they COLLECT 125% of Medicare.

No I'm not. The context of the quote was with reference to charging a private insurance more than one knows the insurance will pay.

I highly doubt any practice is billing insurance $125 ATM for a Lesi...

 

[emd123]

No I'm not. The context of the quote was with reference to charging a private insurance more than one knows the insurance will pay.

I highly doubt any practice is billing insurance $125 ATM for a Lesi...

What you charge has zero bearing on anything. I could charge $1,000,000 for my procedures and I wouldn't make a penny more. What is reimbursed, ie "payed" has nothing to do with the charge. That's all predetermined by insurance contracted rates or government (care/caid) fee allowables.

The only ones affected would be self pay, and generally they can never afford any procedure at any fee, therefore you just negotiate an affordable fee for them (ie, the Medicare allowable, or some multiplier of that).

Either way, "charges" mean nothing.

So (?) I don't really follow the rationale behind saying all private practices over bill or must over bill.

 

[SSdoc33]

What you charge has zero bearing on anything. I could charge $1,000,000 for my procedures and I wouldn't make a penny more. What is reimbursed, ie "payed" has nothing to do with the charge. That's all predetermined by insurance contracted rates or government (care/caid) fee allowables.

The only ones affected would be self pay, and generally they can never afford any procedure at any fee, therefore you just negotiate an affordable fee for them (ie, the Medicare allowable, or some multiplier of that).

Either way, "charges" mean nothing.

So (?) I don't really follow the rationale behind saying all private practices over bill or must over bill.

not really.

OON charges? doing certain injection is certain places (ASC)? the orthopedic surgeon who gets 30K/case with specific insurances at specific sites? that sh$t happens in every specialty.

 

[Ducttape]

What you charge has zero bearing on anything. I could charge $1,000,000 for my procedures and I wouldn't make a penny more. What is reimbursed, ie "payed" has nothing to do with the charge. That's all predetermined by insurance contracted rates or government (care/caid) fee allowables.

The only ones affected would be self pay, and generally they can never afford any procedure at any fee, therefore you just negotiate an affordable fee for them (ie, the Medicare allowable, or some multiplier of that).

Either way, "charges" mean nothing.

So (?) I don't really follow the rationale behind saying all private practices over bill or must over bill.

I'm curious how those accepting of that arrangement are deceived into believing that the site of service differntial is ethical.

so why should a HOPD doctor feel it is not ethical to bill what they will be paid, if that has been predetermined by some government bean counter?

if one feels the need to be ethical, then one should not bill what is charged, but should only bill what is to be collected.

thats my point. business =/= ethics, and even so, getting paid what you are told you will get is not unethical.

 

[lonelobo]

so why should a HOPD doctor feel it is not ethical to bill what they will be paid, if that has been predetermined by some government bean counter?
you should not feel it is unethical, but maybe your employers should

if one feels the need to be ethical, then one should not bill what is charged, but should only bill what is to be collected.

so you would have 40 different fee schedules depending on number of insurances you take?


thats my point. business =/= ethics, and even so, getting paid what you are told you will get is not unethical.

 

[lonelobo]

What you charge has zero bearing on anything. I could charge $1,000,000 for my procedures and I wouldn't make a penny more. What is reimbursed, ie "payed" has nothing to do with the charge. That's all predetermined by insurance contracted rates or government (care/caid) fee allowables.

The only ones affected would be self pay, and generally they can never afford any procedure at any fee, therefore you just negotiate an affordable fee for them (ie, the Medicare allowable, or some multiplier of that).

Either way, "charges" mean nothing.

So (?) I don't really follow the rationale behind saying all private practices over bill or must over bill.

agree with SSdoc not true, particularly when you are reimbursed a % of billed charges.
Pt copays and deductibles are also effected

 

[emd123]

so why should a HOPD doctor feel it is not ethical to bill what they will be paid, if that has been predetermined by some government bean counter?

if one feels the need to be ethical, then one should not bill what is charged, but should only bill what is to be collected.

thats my point. business =/= ethics, and even so, getting paid what you are told you will get is not unethical.

Never said it was. (I think that was someone else).

There's no doubt the system is screwed up, down and every which way, and we're all trying to survive our best in it. Yes we all need to be ethical, but by the same right, there's too many people that like to play the "ethics card" to the point it's meaningless.

 

[emd123]

so why should a HOPD doctor feel it is not ethical to bill what they will be paid, if that has been predetermined by some government bean counter?

I don't think you should.

 

[emd123]

agree with SSdoc not true, particularly when you are reimbursed a % of billed charges.
Pt copays and deductibles are also effected

In an office based practice, no one is payed a "percent of charges". Insurance companies would be stupid to agree to that. That's why reimburse rates are set, beforehand.

People do look at their numbers such as collections percent of charges, but it only means anything, within a specific practice, knowing your set fee schedule doesn't change from month to month (so if collection "percent" drops, your billing people aren't collecting it properly). It doesn't compare practice to practice because one group might set their fee schedule twice as high, but reimbursement won't change. The group with the higher fee schedule will have a lower percent collected, because charging double, doesn't bring in double.

As far as the increased charges from ASC and different patients at different sites, I can't really speak to. I do everything in-office and I don't manipulate the system like that, and wouldn't even know where to start, if it's possible. Others who are more business savvy might. Maybe I'm naive not to. Don't know.

My billing people look in some book to set our fees to what they consider "standard" for in office, but they have always told me, setting them higher and higher, will not bring in more dinero. Could you imagine how easy it would be to scam the system if it did?

 

[lonelobo]

In an office based practice, no one is payed a "percent of charges". Insurance companies would be stupid to agree to that. That's why reimburse rates are set, beforehand.

People do look at their numbers such as collections percent of charges, but it only means anything, within a specific practice, knowing your set fee schedule doesn't change from month to month (so if collection "percent" drops, your billing people aren't collecting it properly). It doesn't compare practice to practice because one group might set their fee schedule twice as high, but reimbursement won't change. The group with the higher fee schedule will have a lower percent collected, because charging double, doesn't bring in double.

As far as the increased charges from ASC and different patients at different sites, I can't really speak to. I do everything in-office and I don't manipulate the system like that, and wouldn't even know where to start, if it's possible. Others who are more business savvy might. Maybe I'm naive not to. Don't know.

My billing people look in some book to set our fees to what they consider "standard" for in office, but they have always told me, setting them higher and higher, will not bring in more dinero. Could you imagine how easy it would be to scam the system if it did?

sorry you have no idea what you are talking about
most of our contracts are a percentage of billed charges.
and in fact only one of our commercial plans is related to Medicare

 

[lonelobo]

In an office based practice, no one is payed a "percent of charges". Insurance companies would be stupid to agree to that. That's why reimburse rates are set, beforehand.

People do look at their numbers such as collections percent of charges, but it only means anything, within a specific practice, knowing your set fee schedule doesn't change from month to month (so if collection "percent" drops, your billing people aren't collecting it properly). It doesn't compare practice to practice because one group might set their fee schedule twice as high, but reimbursement won't change. The group with the higher fee schedule will have a lower percent collected, because charging double, doesn't bring in double.

As far as the increased charges from ASC and different patients at different sites, I can't really speak to. I do everything in-office and I don't manipulate the system like that, and wouldn't even know where to start, if it's possible. Others who are more business savvy might. Maybe I'm naive not to. Don't know.

My billing people look in some book to set our fees to what they consider "standard" for in office, but they have always told me, setting them higher and higher, will not bring in more dinero. Could you imagine how easy it would be to scam the system if it did?

The doctors should set the fee schedules, why would you allow a biller to do this? Totally asinine

 

[Gauss]

http://www.nytimes.com/2014/06/03/business/Medicare-Hospital-Billing-Data-Is-Released.html?hp&_r=0
Hospital Charges Surge for Common Ailments, Data Shows
Charges for some of the most common inpatient procedures surged at hospitals across the country in 2012 from a year earlier, some at more than four times the national rate of inflation, according to data released by Medicare officials on Monday.

While it has long been known that hospitals bill Medicare widely varying amounts — sometimes many multiples of what Medicare typically reimburses — for the same procedure, an analysis of the data by The New York Times shows how much the price of some procedures rose in just one year’s time.

Experts in the health care world differ over the meaning of hospital charges.

While hospitals say they are unimportant — Medicare beneficiaries and those covered by commercial insurance pay significantly less through negotiated payments for treatments — others say the list prices are meaningful to the uninsured, to private insurers that have to negotiate reimbursements with hospitals or to consumers with high-deductible plans.

“You’re seeing a lot more benefit packages out there with co-insurance amounts that require the holders to pay 20 percent of a lab test or 20 percent of an X-ray. Well, 20 percent of which price?” asked Glenn Melnick, a professor who holds a Blue Cross of California endowed chair at the University of Southern California. “Some hospitals will charge 20 percent of what Blue Cross Blue Shield will pay; others will play games.”

 

[ampaphb]

http://www.nytimes.com/2014/06/03/business/Medicare-Hospital-Billing-Data-Is-Released.html?hp&_r=0
Hospital Charges Surge for Common Ailments, Data Shows
Charges for some of the most common inpatient procedures surged at hospitals across the country in 2012 from a year earlier, some at more than four times the national rate of inflation, according to data released by Medicare officials on Monday.

While it has long been known that hospitals bill Medicare widely varying amounts — sometimes many multiples of what Medicare typically reimburses — for the same procedure, an analysis of the data by The New York Times shows how much the price of some procedures rose in just one year’s time.

Experts in the health care world differ over the meaning of hospital charges.

While hospitals say they are unimportant — Medicare beneficiaries and those covered by commercial insurance pay significantly less through negotiated payments for treatments — others say the list prices are meaningful to the uninsured, to private insurers that have to negotiate reimbursements with hospitals or to consumers with high-deductible plans.

“You’re seeing a lot more benefit packages out there with co-insurance amounts that require the holders to pay 20 percent of a lab test or 20 percent of an X-ray. Well, 20 percent of which price?” asked Glenn Melnick, a professor who holds a Blue Cross of California endowed chair at the University of Southern California. “Some hospitals will charge 20 percent of what Blue Cross Blue Shield will pay; others will play games.”

http://www.forbes.com/sites/nextavenue/2013/09/17/you-got-a-10000-hospital-bill-now-what/

 

[drusso]

http://www.forbes.com/sites/nextavenue/2013/09/17/you-got-a-10000-hospital-bill-now-what/

ampaphb,

I guess my concern is that hospital-employed provider's salaries are kept inflated above market value, relative to those provider's respective productivity, by internal accounting/revenue-shifting: That is to say, money from bloated facility fees are used to subsidize less productive providers in the market-place and pay for inefficient hospital administrative staff. I don't think that RVU-based compensation schemes properly correct the magnitude of the shift. Moreover, this internal accounting is kept out of view of the health care consumer (patient) and other stakeholders (payors). The error is perpetuated resulting in spiraling health care costs.

 

[Ducttape]

but how does your argument run with respect to the common perception that hospital employed physicians have a lower average salary and reduced likelihood for high end salary?

ampaphb's article is about how to fight a high hospital bill. physician salaries are not really mentioned in either article. im not sure where your concerns are with respect to the articles themselves.

independently outside of the articles, i think it is not unreasonable to have concerns since you are PP. im just trying to figure out the connection.

 

[emd123]

Totally asinine

I think not my friend.

Considering they work for me, I delegate a task to them, they perform it to my specification and I give final approval or disapproval.

I happen to be doing quite well, but thank you for your concern.

 

[lonelobo]

I think not my friend.

Considering they work for me, I delegate a task to them, they perform it to my specification and I give final approval or disapproval.

I happen to be doing quite well, but thank you for your concern.

"My billing people look in some book to set our fees to what they consider "standard" for in office, but they have always told me, setting them higher and higher, will not bring in more dinero. Could you imagine how easy it would be to scam the system if it did?"

Well approving and setting the actual fees is a little different.

You may be doing "quite well", but you sound ill-informed when you make blanket statements that Fee schedules don't matter and some people don't have contracts that pay a percentage of billed charges. ( This is a big country and what happens or is the norm in your little part of it is apparently completely different from mine)

 

[emd123]

"My billing people look in some book to set our fees to what they consider "standard" for in office, but they have always told me, setting them higher and higher, will not bring in more dinero. Could you imagine how easy it would be to scam the system if it did?"

Well approving and setting the actual fees is a little different.

You may be doing "quite well", but you sound ill-informed when you make blanket statements that Fee schedules don't matter and some people don't have contracts that pay a percentage of billed charges. ( This is a big country and what happens or is the norm in your little part of it is apparently completely different from mine)

I think we might be discussing apples vs oranges, or maybe our situations/environments are totally different.

What I'm concerned with is how much I get paid per procedure, not what I've charged or the "percent of charges."

Explain to me, if your contracts with insurance companies pay you a "percent of charges" without the amount paid per procedure being contractually set between you and them, what prevents you from just jacking up your charges twice as high, and getting paid twice as much, since they've agreed to pay you a "percent of charges"?

I could double my fee schedule for every procedure tomorrow, and I won't get paid a penny more. If you did that, would you get paid double on these contracts? I guess I don't get it. I think we might be discussing two different things.

 

[lonelobo]

Of course we have contracted rates with each insurer and I have never said otherwise. We have to inform them of any change in Fee schedule , so we don't arbitrarily charge a pt a fee.
The point is that what you charge does matter, I set the fee schedule and then come to an agreement with an insurer. We try to avoid having rates tied to a medicare fee schedule
as we would then be at the mercy of any changes made by CMS.
What you charge does matter, as the patient many times has to pay a percent of charges for a visit or injection.

 

[emd123]

Of course we have contracted rates with each insurer and I have never said otherwise. We have to inform them of any change in Fee schedule , so we don't arbitrarily charge a pt a fee.
The point is that what you charge does matter, I set the fee schedule and then come to an agreement with an insurer. We try to avoid having rates tied to a medicare fee schedule
as we would then be at the mercy of any changes made by CMS.
What you charge does matter, as the patient many times has to pay a percent of charges for a visit or injection.

Okay. Weird. That's not at all how it works where I'm at.