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Medicaid Rates So Low, Hospitals Consider It Charity Care

Most hospitals have slim margins, and budgets are set based on anticipated average patient reimbursement at Medicare rates. Some private insurers pay higher rates than Medicare, and the differential is often used to offset the cost of treating Medicaid patients. Medicaid reimburses at about half what Medicare pays, which is usually not enough to break even. Out of financial necessity, Medicaid patients are often given limited access to care and services. This is done in some subtle and some not-so-subtle ways. In a recent conversation with an orthopedist friend of mine, he confided in me candidly:

“Some of my colleagues in private practice can’t pay their office overhead if they treat Medicaid patients. So we see poor people with severely arthritic joints left in pain at home. In addition, with bundled payments, the surgeon gets a fixed amount for the patient’s operation and recovery. What incentive is there to send the patient to a rehab facility? It just takes money away from the surgeon. So the poor have to suffer with very long wait times to see someone who will operate on them, and then afterwards they’re on their own for recovery. Patients who go straight home are at higher risk of falling and may have much poorer outcomes. Surgeons get financial incentives for good outcomes, so it becomes a double disincentive to treat Medicaid patients. You don’t get enough for the operation, and you’re likely to get penalized for their poorer outcomes. Some surgeons I know wont touch a patient with Medicaid for any elective procedure. I have ethical problems with that – so I work at a non-profit hospital where we treat everyone. But I have to do higher volume to break even. I work 90 hours a week and barely see my family. I don’t know how much longer I can do it.”

It is common practice among nursing homes to have a limited number of “Medicaid beds.” The facility simply declines to admit more than 20% of patients with Medicaid. I hear case managers on the phone all day long, looking for a post-acute care facility who will accept a Medicaid patient. For the few non-profit facilities who don’t turn them away, deep financial costs are incurred as they struggle for survival.

The reality is that Medicaid rates are so low that having this insurance is not much better than none at all. As I’ve explained previously in the outpatient world (see an example of an insanely low Medicaid reimbursement for eye care), Medicaid is tantamount to charity care. The news that 21.3 million Americans might receive Medicaid coverage in the next decade should not be hailed as a leap forward. As I see it, that’s just a larger group of people with debilitating arthritis who can’t get hip and knee replacements and are left to suffer in pain at home.

Why Would Any Doctor Accept Medicaid?

A physician friend of mine posted a copy of her Medicaid reimbursement on Facebook. Take a look at the charges compared to the actual reimbursement. She is paid between $6.82 and $17.54 for an hour of her time (i.e. on average, she makes less than minimum wage when treating a patient on Medicaid).

The enthusiasm about expanding Medicaid coverage to the previously uninsured seems misplaced. Improved “access” to the healthcare system via Medicaid programs surely cannot result in lasting coverage. In-network physicians will continue to dwindle as their office overhead exceeds meager reimbursement levels.

In reality, treating Medicaid patients is charity work. The fact that any physicians accept Medicaid is a testament to their generosity of spirit and missionary mindset. Expanding their pro bono workloads is nothing to cheer about.  The Affordable Care Act’s “signature accomplishment” is tragically flawed – because offering health insurance to people that physicians cannot afford to accept is not better than being uninsured.

After all, improved access to nothing… offers nothing. Inviting physicians to work for less than minimum wage so that politicians can crow about millions of uninsured Americans now having access to healthcare, is ridiculous. Medicaid expansion is widening the gap between the haves and the have-nots. The saddest part is that the have-nots just don’t realize it yet.

Do We Really Need Another Branch Of Government To Enforce Medical Informed Consent?

Health Leaders Media recently published an article about “the latest idea in healthcare: the informed shared medical decision.”  While this “latest idea” is actually as old as the Hippocratic Oath, the notion that we need to create an extra layer of bureaucracy to enforce it is even more ridiculous. The author argues that physicians and surgeons are recommending too many procedures for their patients, without offering them full disclosure about their non-procedural options. This trend can be easily solved, she says, by blocking patient access to surgical consultants:

“The surgeon isn’t part of the process. Instead, patients would learn from experts—perhaps hired by the health system or the payers—whether they meet indications for the procedure or whether there are feasible alternatives.”

So surgeons familiar with the nuances of an individual’s case, and who perform the procedure themselves, are not to be consulted during the risk/benefit analysis phase of a “shared” decision. Instead, the “real experts” – people hired by insurance companies or the government – should provide information to the patient.

I understand that surgeons and interventionalists have potential financial incentives to perform procedures, but in my experience the fear of complications, poor outcomes, or patient harm is enough to prevent most doctors from performing unnecessary invasive therapies. Not to mention that many of us actually want to do the right thing, and have more than enough patients who clearly qualify for procedures than to try to pressure those who don’t need them into having them done.

And if you think that “experts hired by a health insurance company or government agency” will be more objective in their recommendations, then you’re seriously out of touch. Incentives to block and deny treatments for enhanced profit margins – or to curtail government spending – are stronger than a surgeons’ need to line her pockets. When you take the human element out of shared decision-making, then you lose accountability – people become numbers, and procedures are a cost center. Patients should have the right to look their provider in the eye and receive an explanation as to what their options are, and the risks and benefits of each choice.

I believe in a ground up, not a top down, approach to reducing unnecessary testing and treatment. Physicians and their professional organizations should be actively involved in promoting evidence-based practices that benefit patients and engage them in informed decision making. Such organizations already exist, and I’d like to see their role expand.

The last thing we need is another bureaucratic layer inserted in the physician-patient relationship. Let’s hold each other accountable for doing the right thing, and let the insurance company and government “experts” take on more meaningful jobs in clinical care giving.

The Shortcomings Of Many Physician Rating Websites

Prepared Patient Publication Logo “We’re Listed With the Plumbers Now”

Angie’s List can help you locate a reputable handyman. Yelp can push you in the direction of the perfect restaurant for your anniversary dinner. Amazon’s consumer reviews can even help you choose the TV that will fit in the corner of your den. So why wouldn’t you turn to the Internet to find your next doctor?

39-year-old Jennifer Stevens did just that when she needed an obstetrician for her first child. Not wanting to reveal her pregnancy too soon by asking friends for suggestions for a good OB, she turned to the Web for more information on potential physicians. She soon found that a lot of the information she needed to make this important decision was missing. “A lot of sites gave stars, but I didn’t really know what those stars meant. I just wasn’t comfortable picking an OB based on that kind of vague information,” she said.

Lindsay Luthe, a 30-year old Washington, D.C. resident, consulted the popular ratings website Yelp after asking her friends to recommend a physician. “I perused the reviews for this particular doctor and saw how positive they were. Those reviews, combined with my friend’s personal recommendation, led me to make an appointment with the doctor. I think I even used the contact info on the Yelp page to call the office,” she said.

The success of physician ratings websites—such as HealthGrades, or RateMyMD, among many others—has been mixed. Read more »

*This blog post was originally published at Prepared Patient Forum: What It Takes Blog*

Survey Reveals Just How Stressed Physicians Really Are

The vast majority of U.S. physicians are moderately to severely stressed or burned out on an average day, with moderate to dramatic increases in the past three years, according to a survey.

Almost 87% of all respondents reported being moderately to severely stressed and/or burned out on an average day using a 10-point Likert scale, and 37.7% specifying severe stress and/or burnout.

Almost 63% of respondents said they were more stressed and/or burned out than three years ago, using a 5-point Likert scale, compared with just 37.1% who reported feeling the same level of stress. The largest number of respondents (34.3%) identified themselves as “much more stressed” than they were three years ago.

The survey of physicians conducted by Physician Wellness Services, a company specializing in employee assistance and intervention services, and Cejka Search, a recruitment firm, was conducted across the U.S., and across all specialties, in September 2011. Respondents Read more »

*This blog post was originally published at ACP Hospitalist*

Latest Interviews

IDEA Labs: Medical Students Take The Lead In Healthcare Innovation

It’s no secret that doctors are disappointed with the way that the U.S. healthcare system is evolving. Most feel helpless about improving their work conditions or solving technical problems in patient care. Fortunately one young medical student was undeterred by the mountain of disappointment carried by his senior clinician mentors…

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How To Be A Successful Patient: Young Doctors Offer Some Advice

I am proud to be a part of the American Resident Project an initiative that promotes the writing of medical students residents and new physicians as they explore ideas for transforming American health care delivery. I recently had the opportunity to interview three of the writing fellows about how to…

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Latest Book Reviews

Book Review: Is Empathy Learned By Faking It Till It’s Real?

I m often asked to do book reviews on my blog and I rarely agree to them. This is because it takes me a long time to read a book and then if I don t enjoy it I figure the author would rather me remain silent than publish my…

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The Spirit Of The Place: Samuel Shem’s New Book May Depress You

When I was in medical school I read Samuel Shem s House Of God as a right of passage. At the time I found it to be a cynical yet eerily accurate portrayal of the underbelly of academic medicine. I gained comfort from its gallows humor and it made me…

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Eat To Save Your Life: Another Half-True Diet Book

I am hesitant to review diet books because they are so often a tangled mess of fact and fiction. Teasing out their truth from falsehood is about as exhausting as delousing a long-haired elementary school student. However after being approached by the authors’ PR agency with the promise of a…

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