

The High Price of Nickel-and-Diming Doctors  - cwan
http://www.businessweek.com/articles/2012-11-21/the-high-price-of-nickel-and-diming-doctors

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ChuckMcM
_"The bottom line: Under Medicare’s bizarre rules, hospital doctors are paid
as much as three times more for patient care than those in private practice."_

And absolutely nowhere in the article does it talk about how the cost of
preventing fraud by single practitioners is the similar to the cost of
investigating a single hospital. [1]

Trying to administer a national system to individual providers leaves gaping
holes which crooks drive dump trucks through to load up on 'free' taxpayer
dollars. So fix that problem and payments can get normalized.

The actual bottom line is that Medicare doesn't make "bizarre" rules, they
make rules to try to minimize fraud and maximize patient benefit, if a rule
seems "bizarre" you need to then go back and figure out what the motivations
for that rule are.

[1] <http://www.gao.gov/products/GAO-13-104>

~~~
ahelwer
"In the matter of reforming things, as distinct from deforming them, there is
one plain and simple principle; a principle which will probably be called a
paradox. There exists in such a case a certain institution or law; let us say,
for the sake of simplicity, a fence or gate erected across a road. The more
modern type of reformer goes gaily up to it and says, "I don't see the use of
this; let us clear it away." To which the more intelligent type of reformer
will do well to answer: "If you don't see the use of it, I certainly won't let
you clear it away. Go away and think. Then, when you can come back and tell me
that you do see the use of it, I may allow you to destroy it."

This paradox rests on the most elementary common sense. The gate or fence did
not grow there. It was not set up by somnambulists who built it in their
sleep. It is highly improbable that it was put there by escaped lunatics who
were for some reason loose in the street. Some person had some reason for
thinking it would be a good thing for somebody. And until we know what the
reason was, we really cannot judge whether the reason was reasonable. It is
extremely probable that we have overlooked some whole aspect of the question,
if something set up by human beings like ourselves seems to be entirely
meaningless and mysterious. There are reformers who get over this difficulty
by assuming that all their fathers were fools; but if that be so, we can only
say that folly appears to be a hereditary disease. But the truth is that
nobody has any business to destroy a social institution until he has really
seen it as an historical institution. If he knows how it arose, and what
purposes it was supposed to serve, he may really be able to say that they were
bad purposes, that they have since become bad purposes, or that they are
purposes which are no longer served. But if he simply stares at the thing as a
senseless monstrosity that has somehow sprung up in his path, it is he and not
the traditionalist who is suffering from an illusion."

\- G.K. Chesterton

~~~
mikeash
Excellent quote. This idea can be applied almost everywhere, and I wish people
would do it more. It's _easy_ to simply declare that some feature is a result
of blind stupidity, but rarely correct.

------
bdesimone
Lack of tort reform, "defensive medicine" and the inevitability of being
forced to work for a medium+ sized group or hospital have made the career
increasingly unattractive. Something is amiss when 9 out of 10 physicians
would discourage children from going into the field.[0]

[0] :
[http://www.thedoctors.com/ecm/groups/public/@tdc/@web/docume...](http://www.thedoctors.com/ecm/groups/public/@tdc/@web/documents/web_content/con_id_004676.pdf)

~~~
batgaijin
What the flying fuck holy shit. 5,105 doctors responded and 1/10 recommends
their profession?!?!?!?!

The worst part is that some of my friends are doctors and are the nicest
people who really care about helping and healing others, and I know will never
ever strike since that would hurt their patients :(.

------
guylhem
The article is quite incomplete. The highest price is the opportunity cost of
doctors going into billing instead of doing clinical work - especially for
hospitals

I can say first hand that there is an _extremely_ lucrative business-
opportunity for physicians to go full time in billing - using domain knowledge
and a careful study of the billing schemes to increase financial returns.

For exemple, what if you could identify the patient cases where manual
recoding has the highest probable financial return, and compare individual
returns to the cost of the human resources you have at hand (from medical
coders to physicians) - to assign the best human resource to each case?

In a highly complex case, recoding by a physician who perfectly knows the
coding and billing rules can easily double the value billed.

So for a >200k case, it can be worth having a physician spend 20 minutes
carefully studying every aspect of the file, aided by specific software
modelling the possible billing scenarios.

If you add some programming knowledge and statistical knowledge, all this can
be easily automatized, and make even more lucrative.

A full industry is created, based on exploiting the arcane artificial rules
imposed on the system - just like for taxes.

The real problem here it that it takes doctors, for which the next best
alternative use would have been doing clinical work on patients.

I guess a society only gets what it pays for.

~~~
Evbn
There is no reason that a licensed doctor is required to do what you describe.
A software programmer with a one-year billing code training can do it. Doctors
are rate limited by med schools, but that only applies to patient care, not
support functions like billing.

~~~
guylhem
There is no reason at all - no one is "requiring" doctors to do anything at
all. However, the invisible hand of the market do provides incentives for
doctors willing to do that job!

The reason is the difference in financial gain if for some reason (domain
knowledge) a doctor can perform the same job more efficiently - which is
usually the case in medical coding, where a doctor usually know better which
complications are linked with which diseases, and which procedures must have
been performed and thus, if they don't appear, have usually been done but for
some reason the coding didn't happen.

That's just 2 quick examples - a physician can "dig" in the file for
supporting evidence to back the claim. Some are quite good at it, and with the
numbers at hand, tiny differences in productivity make huge financial gains.

Say that worker 1, anyone with good training, can make 2x returns, while
worker 2, a doctor, can make 2.2x returns.

Depending on the volume, you hire both and give the common files to worker 1,
and big profile cases to worker 2.

Each worker is usually paid at the marginal value of labor.

When the marginal value of billing improvements become greater than the
marginal value of clinical care, labor _do_ arbitrage and moves to the higher
paying sector - in this case, doctors are going for clinical practice to
billing.

Someone with basic training - or even algorithm - can be efficient, and
provide a first line of coding. But domain knowledge still rules and brings in
big bucks.

Trust me - my job is to bill patients/insurance as much as we are legally
allowed to, using any mean necessary, in a way that will stand in court if
challenged.

We're long past data-mining for potential missing codes - we now run
simulations to isolate which coding is the most probable and the most
lucrative, and divert the file to the right person according to the potential
financial gains. Any loophole in the coding rules is exploited big time !

A quick example - several years ago there was no consequence if you "forgot"
codes, however simulations figured out in 10% of the case this resulted in
greater gains.

Consequently, after a matching legal advice, codes were forgotten 10% of the
time - of course, the _right_ times, until forgetting code was disincentivized
thought legal changes.

~~~
DanBC
It would be lovely if the market provided incentives to these same experts to
spot overly vigorous coding; to spot patterns associated with fraud.

Maybe that's happening?

~~~
guylhem
Vigorous coding is just as legal as paying as little taxes as allowed by the
tax code. People are paid to make sure everything done strictly follows the
letter of the law, with every t crossed and every i dotted.

OTOH, fraud is easy to catch - if the case repartition suddenly changes, or of
there are some mistakes, something must be happening.

But the present incentives are for making rock solid, court-proof claim cases.

It induces all kind of interesting changes- like making sure 5 different
health professionals all considered the patient was in end-of-life to qualify
for a more lucrative palliative care.

As long as there are the 5 signatures on the paper (and in a 2nd line of
defence, proof they saw the patient - like signatures, agendas, etc) it's as
good as printing money.

One would have to be really really dumb or overtly greedy to engage in fraud.

------
frozenport
Could this be by design? A private practice seems like a waste of resources.
Imagine the unused medical devices or the large number of support staff around
just one or two doctors.

To quote, [http://www.kevinmd.com/blog/2009/02/are-days-of-
independent-...](http://www.kevinmd.com/blog/2009/02/are-days-of-independent-
physician.html)

`These trends will ensure that the consolidation of doctors into larger groups
will continue. Whether this definitively benefits patient care is still
unclear, but I suspect that patient outcomes will likely improve as this
movement continues.`

~~~
jimmybot
But why _pay_ the doctor less than the hospital for the same treatment? The
doctors can figure out themselves whether it makes more sense from a _cost_
perspective to join a hospital, a clinic, or to remain independent.

~~~
Evbn
Because doctor pay is only a portion of overall cost for the patient's care,
and it s more efficient to deliver services through a hospital.

~~~
bdcravens
Perhaps, but why is there an attitude that doctors are evil and that all of
them are so well off that we shouldn't care what happens? Seems to me that's
the prevailing attitude. They're continually getting pinched: Tens of
thousands for malpractice insurance. Hundreds of thousands in debt just to get
to the point where they can practice. Seems reasonable if you have a good
upside, but that upside keeps getting pressed on. I don't see how that can
continue without serious reform in the other direction (tort limits and
forgiveness of student debt for medical school)

~~~
frozenport
I think its rather lucrative and a secure way to make big bucks. If you can
memorize and work hard you can succeed. In many fields you need talent,
especially to reach the 200k level.

See [http://chronicle.com/article/Medical-School-
Applications/129...](http://chronicle.com/article/Medical-School-
Applications/129522/) Medical-School Applications Hit Record High Despite
Worries Over Federal Spending

------
nugget
_“I miss being in private practice and being my own boss,” says Alexander, the
Illinois cardiologist. “I would have said 30 years ago that I planned on dying
with my boots on and practicing until I couldn’t practice anymore. Now, do I
look forward to retirement? Yes.”_

This will be the single greatest cause behind the looming physician shortage
and subsequent decline in standard of care. How much harder do you work, for
yourself, in a startup - versus for someone else, as an employee? It's NO
DIFFERENT for doctors.

~~~
vacri
If practicing is his _love_ , then why doesn't he go back into private
practice instead of retiring and take 'love of the job' as partial payment?
It's not like he wouldn't be able to live very comfortably on the proceeds of
his life's work to date, something that a great deal of other 'love of the
job' workers couldn't do.

~~~
chimeracoder
> It's not like he wouldn't be able to live very comfortably on the proceeds
> of his life's work to date

That's quite an assumption you're making there. Aside from the fact that most
doctors are _not_ wealthy beyond belief (contrary to popular opinion), the
insurance structure has changed so much in recent years that many literally
_cannot_ work any longer.

Medicare reimbursements, for example, have been cut so much that doctors
operate at a loss for certain procedures - for specialists, this may even
cover the bulk of what you do, so the choice is whether to spend your savings
to pay for your "hobby" or to retire.

~~~
vacri
"live very comfortably" != "wealthy beyond belief"

~~~
chimeracoder
Refuting a hyperbole != refuting the real point.

------
hippich
_Since 2007, when the government began repeatedly cutting Medicare payments to
doctors, the number of cardiologists working for U.S. hospitals has more than
tripled, while the number in private practice has fallen 23 percent, according
to the ACC. Jay Alexander, a cardiologist who co-owned a practice in Lake
County, Ill., says he sold out to a local hospital after his Medicare revenue
dropped 35 percent. Now the government pays Alexander three times as much to
perform the same tests and procedures—far more than he would have needed to
keep his private practice open. “If this was government’s solution to reducing
health-care costs, they should have their heads examined,” he says. “This is
an unfortunate consequence of bad planning.”_

------
carbocation
The "high price," I suppose, is the reduction in private practice physicians.
Since the article provides no evidence that private practice is superior (for
society) to hospital practice, I'm left unable to assess whether this is in
fact a "high price" at all.

Presumably this is not accidental but is instead a manifestation of an
intentional policy. The details of this policy are left unaddressed by the
article, as are its pros and cons.

~~~
rjdagost
The article is pretty clear that the "high price" is that the same procedure
performed by the same doctor is often billed at a much higher rate when the
doctor is an employee of a hospital instead of a self-employed physician.

~~~
luser001
No. It seems that hospitals are paid on a per-patient basis while individual
doctors are paid on a per-procedure basis. Unless I misunderstood the article.

~~~
nmcfarl
This is not the case, hospitals are also paid per-procedure.

------
moioci
For what it's worth, most of the physicians I know presume that this was set
up expressly to incentivize physicians to become hospital employess. The
thought is that when the time comes to ratchet down reimbursements, the
hospitals have no choice, while independent physicians vote with their feet by
choosing not to participate. There are already a few internists I know who
will not take new Medicare patients, even though that's not supposed to be
charity reimbursement.

