March 7th, 2010 by DrRob in Better Health Network, Health Policy, Humor
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Chaos theory – Noun – The branch of mathematics that deals with complex systems whose behavior is highly sensitive to slight changes in conditions, so that small alterations can give rise to strikingly great consequences.
Alternative definition:
Chaos theory – Noun – The branch of healthcare that deals with making the payment system increasingly complex and ever changing. This complexity and confusion impact physicians and patients in such a way that appropriate services in care of the patient are subject to rules and regulations that are deliberately complex, making alterations from the momentary rules inevitable. This exists so that even small alterations will free the insurance company from the responsibility to pay for said service.
I am no physicist, but I honestly think that a grasp and understanding of the first type of Chaos theory is more likely than that of the second. Let me give a demonstration of the second chaos theory in action: Read more »
*This blog post was originally published at Musings of a Distractible Mind*
January 11th, 2010 by Toni Brayer, M.D. in Better Health Network, Health Policy, Opinion
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Medicare, the government insurance company for everyone over age 65 (and for the disabled), pays fees to primary care physicians that guarantee bankruptcy. Additionally, 70% of hospitals in the United States lose money on Medicare patients. That’s right … for every patient over age 65, it costs the hospital more to deliver care than the government reimburses. That is why Mayo Clinic has said it will not accept Medicare payments for primary care physician visits at its Arizona facility. Mayo gets it. Nationwide, physicians are paid 20% less from Medicare than from private payers. If you are not paid a sustainable amount, you can’t make it up in volume. It just doesn’t pencil out. Read more »
*This blog post was originally published at ACP Internist*
February 19th, 2009 by Dr. Val Jones in Health Policy
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Dan Todd, Senior Manager of Reimbursement for Amgen Pharmaceuticals, recently presented a candid view of how current healthcare reform initiatives may negatively impact his industry. Here are the highlights from the Medicare Policy Summit in Washington, DC:
1. Comparative Effectiveness Research: while the Obama administration’s new emphasis on comparative effectiveness research is not supposed to influence coverage decisions or draw conclusions about “cost effectiveness” – there is no current policy to prevent that from happening. Pharmaceutical companies are nervous about coverage being denied for their products that don’t fare well in head-to-head studies with alternative treatments.
2. Physician Payment Reform: as payment mechanisms move away from fee-for-service and towards episodic care compensation, physicians will no longer be directly influenced by price differences between drugs. Specialist physicians who used to purchase drugs (such as in-office administered chemotherapy agents) under a competitive acquisition program from pharmaceutical companies (and then seek reimbursement from Medicare), will now have less incentive to select one drug over another based on price. Physician compensation will not be dependent on the price difference between drugs – but on the overall bundled services for an episode of care for each patient.
3. The Rise Of Primary Care: as more emphasis is placed on improving compensation to primary care physicians, specialist services will likely receive lower reimbursements to cover the higher payments for PCPs. Since specialists are more likely to prescribe more expensive drugs that have more generous margins (under Medicare Part B), the pharmaceutical industry will be negatively impacted by the improvements in primary care reimbursements for cognitive services.
4. Stifling Innovation: perhaps the most compelling argument made by Mr. Todd is the potential stifling of innovation that a comparative effectiveness regime could impose. Blockbuster drugs are rarely discovered in a vacuum. They are the result of incremental steps in understanding the biology of disease, with an ever improving ability to target the offending pathophysiologic process. The first few therapies may offer marginally improved outcomes, but can lead to discoveries that substantially improve their efficacy. If an early drug is found to be only marginally better than the standard of care, an unfavorable comparative effectiveness rating could kill the drug’s sale. Without sales to recoup the R&D losses and reinvestment in the next generation of the drug, development may cease for financial reasons, and the breakthrough drug that could cure patients would never exist.
5. Timing The Release Of Drugs: Navigating the complexities of Medicare reimbursement, with its separately funded Part B and Part D, is a pharmaceutical company nightmare. With the additional scrutiny on comparative effectiveness and functional equivalency proposed in reform measures – timing of drug releases make a big difference in reimbursement. Take a subcutaneous (SQ) versus an intravenous (IV) version of a given drug for example. The market for the SQ administration is much larger than that of the IV route, but if the drug company releases the SQ version too soon, denial of payment for the more expensive IV version will begin to eat away at profitability. As Dan summarizes, “there’s a fine line between expanding your market and cannibalizing it.”
February 11th, 2009 by Dr. Val Jones in Primary Care Wednesdays
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By Steve Simmons, M.D.
Last week, my partner wrote about a game played between doctors and insurance companies. After reading his post, I recalled the time I first learned that modern medicine was something altogether different than what I had expected. I began my career as a primary care physician in 1996. Fresh out of residency, I was optimistic, naïve, and unaware that a very real game was being played. As time passed, I became a player in this game, but slowly realized that something of value was lost by my patients trying to translate their insurance coverage into health care. Likewise, the struggle to interpret the healthcare system for my patients caused me the same frustration that has led many doctors to leave primary care today.
Early in my practice I was eager to begin my career, relieved that my training was over. However, my training in the game had just begun. To my consternation, insurance company demands soon usurped the time I spent on everyday clinical problems. Often, I’d find my office stacked deep with charts waiting for my review and approval, a consequence of an insurance company changing a drug formulary involving dozens of patients. It seemed a day couldn’t pass without administrative staff requiring an explanation for a treatment I had already recommended so they could arrange pre-authorization.
Insurance coding was not taught in medical school or residency, yet it’s the primary language used to communicate with insurance companies. I needed to learn this ‘skill’ on the fly, using a code book to translate each medical diagnosis into a five digit number, with an additional number serving as a cipher to explain the type of work I had done for a patient. This code book does not contain some diagnoses and many of its diagnostic codes inaccurately describe medical conditions, causing inevitable mistakes that led to non-payment.
In Money-Driven Medicine, Maggie Mahar describes the 1990s as the time of HMOs, when reimbursement became paradoxical. Then, an HMO gave a primary care physician $10 a month per patient, regardless of what we did or did not do for that patient. If we saw our patient in the office we kept the co-pay, but nothing else was reimbursed. If we admitted a patient to the hospital, we received $0, resulting in lost office time, lost opportunities to see other patients, and lost revenue.
Some wonder why primary care physicians don’t go to the hospital anymore. Here’s why: They can’t afford to leave the office. They must stay put and move people through their office, which resembles an assembly line, if they want to stay financially afloat. When I observed that the only way to earn money caring for someone in an HMO was to never see them, my partner looked at an older colleague, smiled, and said, “He finally got it.”
Navigating nonsensical limits and rules became infuriating. One young man, brought to me by his tearful father, was hearing voices. Soon into my exam I realized he suffered from a mental illness. His plan stipulated the patient only could initiate mental health benefits, not a family member. However, the voice was telling him not to call; yet he agreed to see a psychiatrist if someone else would call. I spent well over an hour pre-authorizing his mental health benefit.
Examples include physical illnesses too. I diagnosed a cancer in a woman whose HMO offered only one specialist; someone I would not have consulted. With no choice, I referred her. Days later, she returned in tears stating that she would never see someone who knew less about her problem than she did. I agreed and spent the rest of the afternoon wrangling with her insurer to get a different specialist approved.
When I moved to the Washington DC area, I left primary care. For ten years I worked in urgent care, earning a steady paycheck while avoiding overhead expenses. I could go home without being followed by the constant frustration of trying to untangle impossible knots. Yet, I missed the opportunity to build relationships with my patients and was not using the skills I had developed. When given the chance to work in primary care again without the endless hassles, I seized it. Today, I am gratified to have returned to my calling. It is more rewarding to practice medicine outside of the current insurance model and I remain thankful to my partner at doctokr Family Medicine for the opportunity to do so.
Today, much is lost between patients and doctors. If physicians and patients could connect without so many distractions, primary care would, again, resemble a calling more than a job and the primary care shortage would not be reaching a crisis point. Too much time and effort is spent on a game controlled by endless rules and regulations; time that could be focused on the patient — who should be the true focus, after all.
Until next week, I remain yours in primary care,
Steve Simmons, MD
