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Physicians Don’t Profit From Tests And Prescriptions

Physicians don’t make money from the tests, prescriptions, procedures and admissions they order, according to a new survey by the staffing and technology company Jackson Healthcare. At most, 6.2% of physicians’ total compensation comes from the doctor’s orders, the survey reported.

Direct income from medical orders comprised:
–0.5% from charges from prescriptions,
–1.0% from charges from lab tests,
–1.1% from charges associated with hospital admission,
–1.3% from charges associated with facility fees for surgeries, and
–2.3% from charges from diagnostic imaging.

The survey of 1,512 physicians challenged claims that physicians won’t stop practicing defensive medicine because they profit from their medical orders, the company stated in a press release.

“Many outside the industry believe that physicians make a lot of money on the tests, prescriptions, procedures and admissions they order,” said Richard Jackson, chairman and CEO of Jackson Healthcare. “The reality is that most (82%) do not make any money from their orders. For the remaining that do, it constitutes a fraction of their total compensation.” Read more »

*This blog post was originally published at ACP Internist*

Should You Self-Insure Against Medical Malpractice?

I wrote at some length yesterday about the prerequisites for a medical group to self-insure. What I didn’t go into in detail was the why — the benefits and the risks. I’m going to tackle that a bit today.

Potential Benefits to self-insurance

Those who have been around a few years can testify that the medical malpractice insurance market is highly cyclic. It seems that about once a decade a crisis hits. Whether this is a rational market is another question entirely. Some have attributed these crises to macroeconomic factors, like the market crash of 2002, after which insurers had to recoup investment losses, or hurricanes and natural disasters in which insurers cost shifted onto other product lines. Other obervers cite skyrocketing medical malpractice losses as the driver of these intermittent price spikes. I don’t pretend to know the reason, but it’s a reality that prices go up, and sometimes rapidly so, for no apparent reason. Additionally, during these times of market disruption, it’s common for carriers to drop clients, leave states they perceive as too risky, or leave the med mal market altogether.

One big advantage of self-insurance is that you can control your own destiny and insulate yourself from these market forces. You set your own premium and it only has to go up if you deem it necessary and prudent. You have a carrier that is guaranteed to issue a policy, and that will never leave the market. These are not small considerations.

I know a group that liquidated because their insurer dropped them and they could not find insurance; a contract management chain picked up the contract. I know several groups whose insurer stopped writing med mal and they were left high and dry. They had to purchase a group tail at an exorbitant mark-up and scramble on very short notice to find a new carrier, whcih was excruciatingly stressful. So to have carrier permanence, guaranteed issue, and premium stability is a huge benefit of self-insurance. Read more »

*This blog post was originally published at Movin' Meat*

Physicians Pressured Not To Order Tests, Then Sued If They Don’t

Cardiologists in Connecticut are standing up to the lack of liability protection in the state’s new low-income health plan called SustiNet:

The SustiNet program would create large pools of people, including those who can’t currently afford health insurance, that would theoretically drive down premium costs by competing with the plans of private insurers. Among other cost savings, it would designate a single doctor or practice for each patient, to reduce emergency care use, and create new “best-use” procedures for a variety of ailments to reduce the number of tests doctors order.

But a key provision of the plan was that doctors, in return for following the new procedures and ordering fewer tests, would be protected from malpractice suits if the outcome of a case was not favorable for the patient. However, with backing from the Connecticut Trial Lawyers Association, that provision was removed from the SustiNet bill two weeks ago.

Cardiologists are considered a particularly important group for the new best-use procedures because they tend to order a battery of expensive tests when patients show signs of heart trouble. If specialists like them failed to participate in the SustiNet program, cutting medical costs could be more difficult.

On Tuesday, the Connecticut chapter of the American College of Cardiology withdrew its support for the bill and said that it would circulate an open letter to House Speaker Christopher G. Donovan and Gov. Dannel P. Malloy saying that it could not support the bill without the malpractice protection.

As screws continue to get tightened on doctors’ ability to order tests thanks to third-party oversight bodies, look for more physicians to play hardball about liability limits at both the state AND national levels.

Doctors are being forced to do do their part to control health care costs as a result of our increasingly government-controlled health care initiatives. It’s high time for the trial lawyers’ to do the same. And there’s already precedent to doing so: just look to the legal protections military doctors enjoy when caring for their members. While legal recourse still exists in the military, the challenge of suing the government on behalf of their employees thwarts frivolous claims.

-WesMusings of a cardiologist and cardiac electrophysiologist.

*This blog post was originally published at Dr. Wes*

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