The crisis in US medical care: A doctor's perspective, Part 2

Much Ado About Everything Medical

My name is Scott. I am a physician. Specifically, I am an anesthesiologist, practicing in Florida. Medicine has changed a lot during my 40 years in practice. In fact, we all know it is broken. The question is how to fix it. I don’t know the answer. But, as an “insider” I probably have a different perspective than you and can speak from experience and first hand knowledge. Through this series, I will attempt to unravel various aspects of our health care delivery system to show you how complicated things have become and why the solution is so difficult.

Many aspects of our health care have failed. Attempts to fix these failures have not always been successful. Some have made matters worse. But each decision affects adjacent aspects of the health care delivery system. In addition, corrective decision making has often been misguided, often ill-conceived, often without input from medical authorities, often fueled by ulterior motives but many have resulted in medical care getting off track. In Part 1, I used a simple example, a visit to the Emergency Room, as an overview of a health care delivery system gone awry. Today, I will discuss money as It influences almost every aspect of medicine. I’m limiting this section to a loose framework because It will keep coming up in later discussions where more detail will make sense.

Physicians charge for their services, of course. Most payments are made by insurance companies. When I started medical school (in Michigan, 1973), the insurance company was usually a private one (Blue Cross/Blue Shield, for example). Medicare covered a small percentage of patients, Medicaid was a minor payor and some patients had no insurance. Most doctors made a comfortable income. Some made a lot of money, either by being in a busy practice or by specializing. I was still naive. I didn’t realize even others got rich by cheating the system (topic for a later chapter). I knew from early childhood I wanted to be a doctor. I wanted to help people, just like the doctors my family used as I was growing up. It was a “noble” profession and I inherently knew I would be helping sick people while not worrying about making a good income.

Private insurance was the gold standard. Physicians negotiated their fees with the different insurers. Rates were determined by the profile you built up with the company or by accepting their regional “usual and customary” fee. This was the bulk of a doctor’s income. Medicare/Medicaid paid ridiculously low fees based on their own fee schedule, always a source of jokes among physicians. But it was tolerated because everyone deserved medical care no matter their financial status and it didn’t really hurt the bottom line. In fact, income was so comfortable that most physicians I knew treated people without any insurance as a “public service” either for free or for a discounted fee with a payment schedule the patient could afford (usually $10 to $20 per month).

There were positives and negatives with this financial arrangement. Most people were seen in an office by a GP (General Practitioner). A GP is a doctor who did a one year internship after medical school and went directly into practice (“hung out a shingle”). Although a nurse checked you in and took your vital signs, the doctor saw all his patients. GP’s even made house calls back then. He (yes, the vast majority were male and American) would either treat you or refer you to a specialist, if necessary. The specialist would then send a report back to the GP who would coordinate the care and follow up on the treatment. This included visiting patients in the hospital, if admission was necessary.

However, “paying customers” (those with insurance) often received more attention (and probably more technology). Those without insurance (aka “indigents”) were worked in around them. Extra tests were ordered, often unnecessary. And they might be expensive tests. A doctor could justify any expense if it was in the patient’s best interest. Hospital stays could be extended, even if just for convenience. After all, the insurance company was paying (and the cost passed along to and shared by all the insureds). There were no financial repercussions to the physician. His fee remained intact. In fact, physicians were being wined and dined for their authorization to spend money by any and all companies even remotely connected to medical care. Continuing education became a joke. “Conferences” took place at the best resorts, all around the world, and some even seemed like extended parties. Of course, this was not universal. The majority of physicians were honest, hard working and cared for their patients.

However, abuses like these were the beginning of the end and financial reimbursement started changing in the 1980’s. Medicare roles grew to larger numbers and became a significant portion of everybody’s practice. More-so in the South, I noticed when I moved to Florida (1983), a “retirement” state, where most practices were 60-70% Medicare patients. In addition, it was a period of expansion. Medical knowledge was booming. Technology was exploding with newer and more expensive treatments. It became harder for one general practitioner to keep up with such a diverse knowledge base, creating the need for more specialties and specialists. In fact, the Family Practice (FP) physician became the primary office physician, specializing in family medicine and replacing the generalist (GP knowledgable in basic medicine and surgery). The number of medical school graduates quickly increased to meet the need. All this growth cost money and the prevailing social winds started preaching that medical care was becoming too expensive.

The Government, through Medicare, began limiting the fees paid to physicians. At first they maintained current fee schedules and even allowed a physician to charge a non-Medicare patient more than a Medicare patient, but only up to 110% of the Medicare fee schedule. Of course, if you wanted nothing to do with Medicare, you could “not participate” in Medicare and still charge whatever you pleased. Later, the fee schedules were rolled back, a little at a time. It began negatively impacting Medicare participating physician’s income, obviously starting with those practices with a higher percentage of Medicare patients (the warmer South with more “retirement” states).

The next step was to limit all fees charged. The Government could only control physician charges through Medicare imposed fee limitations. That is, a physician had to agree to join Medicare and follow it’s rules. In high Medicare percentage areas, social and financial pressures literally forced physicians to accept Medicare patients and therefore, participate. Up North (traditionally low Medicare populations), physicians could still maintain a practice because there were enough patients with private insurance and a physician could simply choose to not participate in Medicare. The Government found a way to coerce these northern physicians into accepting Medicare by linking medical licensure to Medicare billing rules. That is, if you wanted to keep your medical license, you had to agree to follow Medicare fee limitations and not balance bill Medicare patients for any amount over what Medicare allowed even if you were a non-participating physician. Hospitals treated Medicare patients and, therefore, required physicians on their staff to accept Medicare patients also. It became almost impossible to avoid participating in Medicare.

Watching this progression from afar, private medical insurers followed the Government lead and began limiting physician fees. Now when you negotiated with an insurance company, they asked what percentage of Medicare would you agree to. At first, they paid (approximately) 150% of Medicare rates and later lowered them to almost Medicare levels. When HMO’s (Health Maintenance Organizations) were the rage, they offered less than Medicare rates, signing up desperate physicians to 90-95% of Medicare fees. Medicaid still paid even lower rates than Medicare. All of a sudden, the “ridiculously low” Medicare fee schedule of the 1970’s became the gold standard of the 1990’s.

Physicians are the only group of professionals, that I know of, who are legally limited in how much they can charge for their services.

That is a powerful statement. There are no limits to what an attorney can charge. There are no limits to what a plumber can charge. In addition, there were never any limits placed on durable medical goods charges or pharmaceutical company charges for prescription drugs. But, if a physician charges a patient more than the Medicare allowed fee, the result may be fines and/or expulsion (for life) from participating in Medicare. In fact, if two physicians even discuss their non Medicare (private insurance) fee schedule, they may be criminally charged with fee fixing (anti-trust and racketeering laws) and prosecuted, with possible expulsion from Medicare for life and possible jail time.

Medicare fees have been ratcheted down so much that, across the board, most physicians earn approximately 60-70% of what they earned in the 1980’s (without considering inflation). One interesting fact is that limiting physicians fees has not helped Medicare control their costs. In 2016, physician charges accounted for only 10% of the Medicare budget (Source: Congressional Budget Office, June 2017 Medicare baseline). Let’s consider the practical aspect. The costs of running a practice keep increasing: rent, equipment, office personnel salaries, licensing, et cetera. The cost of raising a family keeps increasing. The cost of life keeps increasing. Yet, physician salaries keep decreasing.

How has all this affected medical services? If a physician cannot increase a patient’s fee, the only way to keep making the same annual income is to see more patients. Have you ever noticed your doctor’s nurse (advanced registered nurse practitioner, ARNP) does a lot of the work your physician used to? Does your family physician just pop his head in and say hi during your office visit? Does your entire office visit seem rushed? If you have had surgery recently, did you meet your surgeon before the day of surgery? Have you seen your actual surgeon post operatively for a follow up? Or did you only see his nurse? Did your anesthesiologist spend more than five minutes with you prior to going to sleep? One unexpected, but inevitable, result of being financially restricted is: doctors don’t have enough time to spend with each patient.

Hospitals are under similar pressures. Nurses now take care of more patients at a time. LPNs and nurses’ aides are doing more of the work. Your hospital stay is shorter - whether you are ready to go home or not. But if you’re not ready to go home and care for yourself upon discharge from the hospital, you are sent to a rehabilitation facility. Or perhaps you go home anyway and a visiting nurse checks in on you now and again, but only for a few visits before Medicare benefits run out.

There has been a massive shift to cost containment, away from the best interest of the patient. What used to be justifiable if it served the patient’s best interest is now disallowed in favor of cost containment. One example: In 1970, it was considered good practice to order a screening chest X-ray for an otherwise healthy 40 year old smoker. If, out of 1,000 X-rays, one curable lung tumor was detected and a life was saved by operating early enough, it justified the cost of 999 normal X-rays. In 2017, you would not be allowed by the insurance company to order a chest X-ray on an otherwise healthy 40 year old. In the name of cost containment, it is less expensive to let one person die of a curable lung cancer than to pay for 1,000 X-rays. This is a not so subtle example of the shift of priorities in medicine today. The pendulum has swung too far in the wrong direction. Hopefully, you (and public sentiment in general) will notice and help correct the situation.

If this article is interesting to you and you want to know more, please consider upvoting it. If there is enough interest, I will continue with more articles that will explain the above in more detail and explore other medical issues.