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Sneaky Things That Doctors Do To Survive Financially – Introduction

Dr. Val’s note: My friend and co-blogger Alan Dappen is going to prepare a series of posts to expose the convoluted billing and procedural tactics that primary care physicians adopt to survive the ever decreasing reimbursements that would otherwise put them out of business. Below is his introductory post – others will follow each Wednesday morning here at Better Health. Enjoy!


The Doctor’s Huddle

By Alan Dappen, M.D.

On the great gridiron of healthcare, the team of primary care providers is leaning inward, supportively embracing one another.  They have huddled together for 15 years, calling plays against their opponent, the Insurance Team.  The two-minute warning has sounded and the Physician Team is losing. The Physician’s play book pieces together strategies culled from cocktail party conversations, doctor conventions, office staff meetings, back hallways of hospitals, online blogs, and a plethora of practice management magazines; routinely circulated offering grand strategies to teaching doctors how to tackle the Insurance Team. The rising mantra is “Hit them again! Harder! HARDER!”

This game began in the 1980s, when concerns that rapidly inflating healthcare costs would consume all the U.S. gross national product within the foreseeable future unless something was done.  Insurance companies lobbied regulators and advertised to the public not to socialize healthcare. Most people sighed relief when laws were passed granting insurance companies broad powers to regulate the price of care.  Little did these politicians realize that they inadvertently were “socializing” care by handing the keys to the health care gold mine to Team Insurance’s privatized, for-profit model.

Up until this point, the healthcare system had experienced 40 years of run-away costs. Patients with insurance hadn’t worried about the costs of care. Inside of this cash rich environment, many important innovations occurred but employers, who subsidized most of the cost, questioned the sustainability of paying for it.  All the while, physicians, hospitals, pharmaceutical companies, and medical suppliers eagerly reassured the patients:  “Since you aren’t worried about the price, then no one else should worry about it either. We’ll pass the bill to the insurance company–they pay what we ask.”

This modus operandi came to a screeching halt in the late ‘80s, when the aforementioned game began, and Team Insurance was allowed to fix prices via preferred provider contracts. Insurance providers understood that the key to these contracts was not to change the rules for patients, who needed to perceive their care as virtually free so that they would continue to seek care.

Instead, Team Insurance spelled out new game rules in contracts for physicians, where the physicians “negotiated” to accept roughly 50% of their customary rate in order to be listed in the insurance company’s Preferred Provider Directories. These rules were never acceptable to physicians. Docs refusing to sign contracts rudely were awakened by the new world order when 95% of their trusted clients refused to return until they could say, “Yes we are preferred providers.” And, “Yes, all you have to pay us is your co-pay.”

Patient expectations remained unchanged. Quality of service, patience, time to explain oneself, attention to wellness, review of multiple issues, meaningful personal relationships, prescriptions, detailed explanations of risks and benefits of treatments, reviews of other possible ideas in a differential diagnosis,  labs, call backs with results, and introductions to specialists were never connected to a price for patients before. After all, haven’t physicians had spent 40 years reassuring patients, “Don’t worry your silly little head about the price.” This time the boomerang came right back at physicians who suddenly were demanded to deliver all the same service for half the price.

The power of “owning” the patient for a $20 co-pay is not lost upon the insurance team.  Every year, as they hand out new contracts, these insurance companies congratulate their preferred doctor players for their work, quality, and dedication and try to not rub in the following truth, “We own the doctor and we own the patient. Any doctor who dares not sign our next annual contract for less money will find themselves without patients. Remember, for the patient the big thing that counts is that you can say yes to the $20.00 co pay. Now sign on the dotted line.”

Every “negotiated” dollar saved from paying Team Physician means smiles all around for Team Insurance and their fans (shareholders.)  Price fixing initially did control costs, but only for about five years.  The U.S. now is back on the trajectory of health care pricing doubling every 7-10 years.

So what’s going on in those primary care huddles? The game plays are called out: “More work, less money, patient demands, protection from malpractice, keep smiling … Somehow we’re going to make somebody cough up our money …Hit them again harder!  Let’s do it!  On one, break.”

Up next, I’ll show you some of the plays physicians have put into place to survive. And why you the patient might feel like the football. Play along, with us. Hup one, Hup two, hike!

Until next time, I remain yours in primary care,

Alan Dappen, M.D.

Moral Hazards: What Happens When You Think Healthcare Is Free

By Alan Dappen, M.D.

“Doc, you’re the best! You saved my life, and my wife’s. You delivered my kids and brought them through sickness — time and again. I trust you, and can confide in you … Hey, wait a minute … Are you still a Preferred Provider?”  

This is a statement I heard all too often as a primary care doctor beholden to third-party providers. When a long-time patient asked this question, I felt like the mythological Damocles, who precariously sat beneath a sword suspended by a horse hair, for if I answered “No” to that question of “Are you a Preferred Provider” the sword would fall, swiftly.

No matter skill, knowledge, talent, caring, quality, experience, price or level of trust of their current primary care practitioner, 90-95% of patients who ask “Are you my preferred provider?” paradoxically will exit one primary care provider’s office to entrust the decisions of their day-to-day health care to another physician picked by their insurance company, even though this new doctor may be a stranger who signs a contract to do the job for less money.

For decades now patients have been led, like lemmings, by the belief that the vast majority of healthcare is virtually free because they have health insurance usually wholly and partially funded by someone else, like their employers of the government. Furthermore, patients trust that the providers of this health insurance know what is best for their care.

Because someone else is footing the bill, we as patients have absolved ourselves of the responsibilities associated with finding and consuming good care. Instead, the hope of getting what appears to be virtually free health care trumps all other considerations of care, whether it is quality, level of expertise, convenience or accessibility. Few of us are immune to wanting to get something for less, or better yet, something for nothing. This behavior leads to moral hazards, which are most easily explained by the WIFM (“What’s in it for me”) concept, and best exemplified by the way we eat at a buffet, drink at an open bar, or most recently by how the banks flocked to the sub-prime market to make easy, big money.

In health care, these moral hazards mean patients do not hold themselves accountable for finding the quality of care they desire at a price that makes sense. Instead, patients often rush for more health care believing that more care is better care; or to specialists because this means more competent care; or to more tests because this translates to more comprehensive results; and finally to more drugs and more treatments because these mean a longer, happier life. And patients do so because they believe their care is “free.”

Most patients are loathe to believe the numerous studies contradicting many of these beliefs. Due to the set up of the current “free” care healthcare system, patients are shielded from the actual costs of care, so they do not carefully consider these costs when assessing care. Take, for example, that a new chemotherapy drug for colon cancer cost $40,000, and yet only adds an average 1.5 months onto a patient’s life. Or that the newest brand name antidepressant costs 6 times more than its older, generic cousin (Prozac), with no evidence that it works any better. And finally, consider this example: a 70 year-old man with severe, irreversible chronic end-stage heart and renal failure, who has been bed-ridden for 3 months with numerous deep bed sores, and whose family demands “keep him alive no matter the cost.”

Unfortunately, the WIFM game doesn’t end with the patient.  Imagine the beauty of running a business when all your customers say, “Don’t worry, just send the bill to Mom (the employer) and Dad (the government) and they’ll pick up the tab.”  It is not rocket science to understand how this led physicians to a business model that guaranteed customers as long as they played by the providers’ rules; nor to understand how drug companies produce more and more “me too” drugs that offer no advantages over generic precursors but cost 6 times more; nor to see primary care physicians moving to specialization, with little difference in training compared to primary care while doubling or tripling fees; nor insurance companies keeping 30-40% of all collected money for “administration, policing, and profits,” and their executive team pocketing exorbitant rewards, like the United Health Care CEO who amassed almost $2 billion in just a few years.  How dare he?!

This then is the systemic toxic effects of our health care system. The moral hazard of free healthcare binds us into one big dysfunctional family. Whatever happens, let’s make sure someone else is paying for care.

Here’s the rub: insurance has a social value for protection against large or chronic, recurring costs to help ensure your financial well-being. Primary care, on the other hand, is something all of us need, on average 1-2 hours a year and a can cost the patient as little as $300. What minimal cost to pay for staying healthy today, building for a healthy tomorrow, and ideally decreasing our need for more expensive healthcare later on. Yet few are willing to pay only a little bit today for their day-to-day care – no matter its level of quality, accessibility or convenience, unless it is “free.”  So, in a world of moral hazards, what is going to happen to typical primary care?

Stay tuned and we’ll review the dirty little secrets primary care plays to survive and why it really does matter to you.

Until next time, I remain yours in primary care,

Alan Dappen, M.D.

From The Heart: A Christmas Story

By Alan Dappen, MD

Twas days before Christmas and all through the house
The doctor was pacing, not telling his spouse.
“It can’t be my heart for it’s healthy and strong;  
I exercise, eat right and do nothing wrong.
I’m hurting, I’m worried, have lingering doubt
I guess that I really should check this thing out.”

I did and the doc said, “Sadly it’s true,
That nobody’s perfect and that includes you…”

So starts my tale about life’s infinite ironies. This past week, I, “the doctor,” became “the patient.” My story is classic, mundane, full of denial, of physician and male hubris that it merits telling again. Like Christmas tales, there are stories that are told over and over again hoping that lessons will be learned, knowing they might not. I was lucky. I was granted a pass from catastrophe and this favor was handed to me by my medical colleagues and all who supported me.

My story began six months ago while playing doubles tennis with friends.  Suddenly I felt the classic symptoms of chest pain. “This is ‘textbook’ heart pain,” I thought. “A squeezing/pressure sensation dead center in the chest.” Running for shots made the pain worse and stalling between points helped. My friends soon noticed a change in my behavior.

To my chagrin, they refused to keep playing. Instead, they wanted to call for help. Indignant, I informed them that the chest pain was caused by my binge-eating potato chips before the match – a fact only a doctor could know.  The sweating was clearly from playing. I was younger and healthier than anyone there.  The pain subsided while we relaxed and joked about “the silly doctor who thinks he doesn’t need help.”

In the next week, the discomfort returned often when I exercised, which I regularly do, including jogging, biking, swimming, and weekly ice hockey and tennis matches. Every activity provoked the pain. “Stupid acid reflux!”  I thought, contemplating giving up my favorite vice –coffee.  Keeping the secret from my wife was easy; she was traveling for business.

Over the next several days I started aspirin, checked my blood pressure (BP) regularly, drew my cholesterol, rechecked my weight. All were normal. Finally I plugged myself into an electrocardiogram (EKG), with the “nonspecific changes” results not reassuring me. I went to a colleague for a stress echocardiogram, and passed. “See!” I congratulated myself. “It was just reflux.”

For five months, all went well, with no memorable pain. But on December 10 “the reflux” came back. On the sly, I restarted aspirin, pulled out the home BP monitor again, and considered cholesterol-lowering drugs “just in case.”

Saturday night into early Sunday morning I played ice hockey. This time the pain was worse.  With my team short on substitutes, I played the entire game.  I dropped into bed exhausted and pain free at 2 a.m., only to be nagged throughout the night with persistent discomfort. I nearly slept through a morning meeting with a medical colleague at Starbucks. To avoid increasing my “reflux” pain, I passed on coffee.

By noon, a feeling of overwhelming inadequacy enveloped me. I withdrew, and my wife, Sara, asked what was wrong. I had to confess to her – and myself – of the reality of the pain in my chest. Sara coaxed my answers from me with non-judgmental techniques learned from years of experience.

“What advice would you give a patient calling you with these symptoms?” she asked.
“If it was anyone else, I’d send them to the ER,” I responded, wanting to stall longer. “I want to check my EKG at the office.”

Once there, she helped me with the wires, hooked up the machine.  She turned the screen toward me with the interpretation to read: “anterior myocardial infarction, age undetermined, ST- T wave changes lateral leads suggestive of ischemia.”

“Stupid machine,” I thought, “there must be something wrong with it.” I insisted Sara redo the EKG. The second reading was the same.  I leaned my head into my hand, not willing to believe what I saw.  “Sara, let’s do it one more time…please.”

She asked, “What would you tell your patient to do?”

“Call 911.”  I said quietly. The words hung there.  At last I handed her the keys, saying, “Drive me to the ER.”

So went the gradual erosion of my denial, emerging into a new reckoning. After a catheterization, the cardiologist used a stent to open my 95% blocked coronary artery. Despite all I did to ruin my chances, modern medicine delivered me a “healthy” heart. This holiday season I got a second chance.

Eating healthy, exercising regularly, sleeping well, being happy, praying regularly, even being a doctor does not save us from the inevitable… sooner or later we are all patients. Healthcare is a critical social asset that must be done right, must be affordable, must offer as many of us in America a second, even a third chance. May we all be thoughtful and willing to compromise to achieve this end.  Amen.

Primary Care Docs Ask Permission To Be Next In Line: We Need A Bailout

By Alan Dappen, MD

Photo of Alan Dappen

Alan Dappen, MD

Believe it or not, this headline paraphrases the recent lead article from the American Medical News,  covering a comprehensive, white paper published  by the American College of Physicians (ACP).  The article reviews the state of primary care physicians.  The conclusion: since primary care doctors are essential to control the spiraling costs of health care, a bailout is necessary to shore up their rapidly shrinking ranks.

To understand why they argue a bailout is needed, we must look at what caused the crisis. Primary care doctors are drowning in red tape, as my partner Steve Simmons mentioned last week.  Over the past 20 years have come bureaucracies and regulations with acronyms like OSHA, CLIA, HIPPA, CPT, ICD-9, P4P.  Drops led to trickles: more complex certification and increasing malpractice risk.  Then trickles formed streams of data that is required of practitioners: quality reporting, management reports, productivity measures, electronic medical record systems, billing reports. Finally, the flood of information needed to stay in compliance with Medicare, Medicaid and insurance regulations swamps primary care providers.

The creative and intellectual focus of primary care physicians has been diverted to understanding this new world order of business contracts, negotiated rates, billing details, payment denials, coding, and non-compensated services. This is no game. It means the difference between medical practices staying afloat or going under. There are now thousands of reasons a doctor can lose money by getting fined, sued, or refused reimbursement.

Family doctors and internists have grown weary. They feel underappreciated by their patients, undervalued by the specialists, underpaid by the insurance company, overworked to meet expenses, and overexposed to malpractice risk.  U.S. medical graduates entering family medicine residencies dropped by 50% over 10 years and are now filled mostly by non-US trained physicians. American medical graduates now rush to specialties where they make better money, gain higher status and/or achieve better control of their work schedules. To keep primary care doctors in adequate supply, so the argument goes, system subsidies and readjustments are needed.

Outsiders easily “get” what went wrong the auto and financial industries.  These industry execs standing in line for handouts make most of us angry. They refused to do so many things to avoid their plight: innovate, stand up to wrongs, worry about sustainability, take responsibility, invest in a new future, even ”bending the truth” and turning  a blind eye was fine as long as there were profits. They say that Americans didn’t want “the truth.” They want us to believe that they are victims of circumstances beyond their control. What should we think of primary care doctors who put themselves on the same playing fields as these execs asking for a bailout?

Internists and family doctors are the backbone of a vibrant healthcare system that is cost-effective [see later blog post to learn why]. But, for far too long we in primary care have piggybacked on the insurance systems, relying on them to pay the bills, even when the costs of administering that is more expensive than the care provided in most cases.  This has slowly weakened our doctor-patient relationships and our advocacy for patients, thus compromising our power and professionalism. By casting its lot with third party payers, primary care essentially has announced that it wants someone else to fix the problem of affordable care.

I feel that the solution to primary care is simple. We should not be looking for a bailout. Instead, primary care doctors must step up to initiate change. Personally, I stopped waiting for someone else to rescue me or tell me how to do my job, promising they could make me happy. The restructuring I’m suggesting to revitalize primary care is that patients retain control of the funds they (and their employers) have been giving to the insurance companies for their day-to-day care (which now account  for about 30% of total costs), and directly purchase the services they need from doctors who serve them best. Doctors in Oregon (, New York City ( and Northern Virginia  ( already have set up such practices. These doctors have developed innovative business models that deliver better care to patients at much lower cost.  But these will only spread on a large scale if patients understand the value of these new business models, and flock to support them.

More details about the changes needed can be found on our website or by listening to our story with “The Story” on National Public Radio, and in this blog in the coming weeks.

Until then, I remain yours in primary care,

Alan Dappen, MD

Where Have All the Family Practice Doctors Gone? First Aid for Primary Care

By Alan W. Dappen, MD; Steve Simmons, MD; Valerie Tinley, FNP of Doctokr Family Medicine

We are a family doctor, an internist and a family nurse practitioner working on the front line of the American health care system. We share a moral and ethical duty to protect the health of our patients along with all our colleagues who labor daily doing the same.We as Americans are proud of what has long been considered a first-rate health care system. Sadly, this system is broken despite our best efforts. Americans spend much more per capita for care as any other country. The World Health Organization has graded our care as 37th “best” in the world. Even worse, American citizens were the least satisfied with their medical care compared to the next five leading socialized industrialized countries, including England, Germany, Canada, Australia and New Zealand. There are many things wrong. Let’s examine a few:

Primary care medicine in America is gasping for its last breath. Internists, family doctors, pediatricians (whom health experts consider essential to a robust and cost-effective delivery system) are leaving primary care in droves. The number of newly trained generalist doctors has plummeted so fast that extinction of the generalist doctor has been forecasted within 20 years by both the American Academy of Family Practice and the American College of Physicians.

Patients are angry and exasperated with long delays, poor service and confusing and redundant paperwork. To date 17% of us are uninsured and this number will quickly grow in a deepening recession.

Employers face a huge cost burden as health insurance prices go through the roof. CEOs consistently say the runaway costs in health care benefits (which double in price every seven to ten years) threaten the viability of their companies. Since 2000, the number of small businesses offering health insurance has dropped 8%.

Health insurance companies are making so much money that several states have motioned legislation compelling insurance companies to disclose the percentage of premiums spent on actual medical care. Not surprisingly, their lobbyists are resisting. It is not uncommon for insurance companies to keep 30-40% of every dollar for “administration” and profits. Many of these companies are on record reaffirming their commitment to shareholders and short-term profits.

Doctokr (“doc-talker”) Family Medicine is a medical practice that was created to respond to the conflicts and problems listed above. We have worked to resuscitate the soul of the Marcus Welby-style patient-focused physician while adding technology to deliver fast, responsive and informed care. All fees are transparent and time-based and are the responsibility of our patients to pay. All parties that interfere with the doctor patient relationship or increase our costs have been removed from the equation. The practice delivers “concierge level” services: 24/7 access, connectivity to the doctor no matter where our patients are located, same day office visits for those that need to be seen, even house calls for those unable to get to our office. By removing the hurdles and restoring transparency and trust, 75% of our clients get their entire primary care needs met for $300.00 a year.

This post is written by three medical professionals who stopped waiting for someone else to find a solution and are actively changing primary care in ways that dramatically improve quality, convenience and access, while drastically reducing costs. The US deserves excellent health care and it must be done right. To understand why we would bother to “walk the walk,” we ask your indulgence and participation while we “talk the talk.” We hope this format will educate and inform you in ways that move you to participate in your care. Health care is about you, just as much as it about us, because we are all patients. We all have a stake in shaping the inevitable need for reform.

The next upcoming topics:

  1. Where did the Marcus Welby, MD-style of primary care go and how can we get it back?
  2. How have you as a patient lost control of your body and health?
  3. Turning the primary care model upside down: What does primary care need to do to reinvent itself so that it serves its patients without other conflicting interests?
  4. Begin the exploration of the unexamined assumptions of health care….

Until next week, we remain yours in primary care.

– Alan, Steve, and Valerie


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