Boutique & Box Store

Home DepotA recent article in the Wall Street Journal (subscription required) addressed an interesting new phenomenon in medical practice: the micro-practice. Physicians, weary of being forced to see large volumes of patients because of HMO requirements or financial pressures, coupled with high practice overhead and burgeoning paperwork, are striking out in a very different direction. Some physicians — especially in primary care — are opening small offices without office staff, seeing far fewer patients with much lower overhead, using technology to bridge the gap. As of now, these practices are quite rare, and represent a significant risk to the physician, generally resulting in substantial reduction in income. Nevertheless, it allows these physicians to practice a simpler form of medicine, spending far greater time with patients, having more free time for themselves, and returning to some of the priorities which brought them into medicine in the first place.

Now, I am skeptical that this particular model for medicine will gain wide acceptance. Nevertheless, I believe it represents a trend toward alternative practice models outside the standard framework of large-volume, federal and third-party insurance-driven enterprises. Another similar trend, also small in numbers, is the so-called boutique practice, where patients pay cash, often subscribing on an annual basis to a practice which then provides full services, including appointments on demand, greater access to the physician by phone, routine preventive care, longer appointment times, and other amenities.

I expect to see an increasing divergence in healthcare along similar lines. One analogy would be the box-store versus the boutique. The box store is large, has everything you might need at low prices, provides little in the way of services or amenities — think, Costco or Home Depot-healthcare. For those unwilling to partake of such Wal-Mart style health care, and who have the means to seek alternatives, there will be health care services provided with excellent service and benefits not available in the box store, such as plenty of time with the physician and short waits in the waiting room.

When talking about the social economics of providing health care, it is useful to think of it as a triangle: at one point is quality, and a second point, affordability, and a third point, access. There’s only one problem with this unlovely triangle: one can only have two of the three points at one time. Hence, if you have widespread access to health care which is very high quality, it will not be affordable; if you have broad access and affordability, quality — perhaps not necessarily medical quality, but service quality and access to more expensive or optional medical services — must be constrained. We are currently seeing in large measure the third side of the triangle: we are providing very high quality healthcare, which while expensive, is still relatively affordable — but the cost we are paying is limited access. There is simply no way to have all three points of the triangle.

There is a huge and growing access problem in American health care today, with tens of millions of Americans without insurance, and many more — especially those at or below the poverty level on Medicaid — who cannot find access to physicians because of their own limited financial resources, or the inability of physicians to accept reimbursement from federal programs which pay below the costs to provide the services. The pressure to resolve this dilemma at the political level is very large, and some form of universal coverage seems inevitable in the relatively near future.

In order to provide such broad-based coverage, however, the necessary limit on financial resources — whether federally financed, or paid for through employer-funded or personal-based insurance — must by nature result in a reduction in quality. This is not to say that substandard medicine will be practiced, although there is an increased risk of this; more importantly, there will be significant restrictions in access to optional, high cost technology, and an inevitable decline in service. Universal health care coverage, while critically important, will invariably lead to long waits for an appointment, very little time with the physician, seeing a different doctor at each visit, and having to wade through many levels of support staff to communicate with your doctor. This is already becoming far too common even under our current system due to intense cost-cutting pressures.

While such a universal coverage arrangement may prove very functional from the standpoint of providing basic care for large numbers of people, it will not prove satisfactory to many Americans who have become accustomed to a far more personal and consumer-driven model of health care delivery. There will, therefore, be strong financial incentives to provide alternatives to box-store medicine — and in fact, we are already beginning to see this.

The best contemporary examples of this alternative system of boutique medical care can be seen today in plastic surgery clinics, LASIK eye centers, and the growing trend toward high-end specialty hospitals catering only to orthopedics or other subspecialty care. While social engineers tend to decry such two-tiered healthcare systems, in fact, these alternatives respond far better to true market forces then does the lumbering dinosaur of federally-funded or third-party insurance-controlled health care. Plastic surgery clinics compete on price, service, and quality for a facelift, tummy-tucks, or a breast augmentation; high-end clinics charging more must be a higher standard of quality as well as provide extraordinary service. Consider the dramatic decrease in cost for elective corrective eye surgery with LASIK: prices have dropped dramatically over the past few years as high-volume LASIK clinics compete for patients. Hospitals, faced with a drain of better-paying patients toward specialty hospitals which provide a higher quality of service and a more satisfying patient experience must now re-examine their own quality issues, and are pressured to provide nicer facilities, better food, more nurses per patient, and other service-oriented improvements.

Beware of those — especially of the political persuasion — who promise unlimited, high-quality health care which is affordable. It does not, and cannot exist. We clearly need to address coverage for those in need of health care who cannot currently afford it, for health care, while not a right, is most certainly a very large part of our quality of life and well-being. The boutique model of health care service will not address this problem, in spite of the pipe dreams of libertarians who believe that free market solutions can solve all problems. This two-pronged approach may well provide a uniquely American solution to the worldwide dilemma of providing high-quality care, excellent service and access, and affordability Virtually all countries providing socialized, government-funded health care are struggling with the box-store problem. Poor service, long waits for care and “elective” surgery (like heart bypass and cancer surgery), and spiraling costs are the rule. But we in America have become accustomed to the highest quality of health care in the world, delivered quickly — for those who can afford it.

Perhaps it is time we abandon a utopian vision for health care, and settle on something, though imperfect, which may end up working quite well in the American healthcare system. It may well come from the ground up rather than from the top down.

More Embryonic Stem Cell Info

I’ve recently referenced an excellent article on the huge gap between hype and reality with embryonic stem cell research (as opposed to the real and growing applications of adult stem cells), and Michael Fumento again points out the huge gap between myth and reality here (HT: Instapundit). Maybe the word is starting to get out — although I’m not holding my breath.

On a separate note, I’ve been quite busy lately, with several personnel changes in the office in the works, but have a few essays near completion on the Faith series (part 1 and part 2 here), Moving the Ancient Boundaries, as well as updates on the Narrows Bridge construction — so stay tuned.

God bless, back soon.

Embryonic Stem Cells

A.M. MoonIf you have any interest in the ongoing debate, ethical issues, and clinical promise of embryonic stem cell research, you should take a few minutes and read this excellent article by Maureen L. Condic at the always-excellent First Things magazine.

Dr. Condic is an associate professor of neurobiology and anatomy at the University of Utah School of Medicine and conducts research on the development and regeneration of the nervous system.

You will find the article immensely helpful at clearing away the fog generated by ESCR proponents and their supporters in the media, politics, and the shallow, vapid, intellectual pools of Hollywood.

Do yourselves a favor and give this a read — and save a copy as a reference for the next time someone waxes poetic about their promise, or the “cruelty” of exercising the utmost caution in pushing ahead with such research.

The Maze – Part 8
Is There an Exit? – II

This is a part of an ongoing series on medical coding, billing, and reimbursement.

Previous posts are here:


In my previous post, I suggested that there may be simpler, more effective ways to manage reimbursement in health care. Clearly, the current system is broken. Health care costs have been spiraling despite aggressive attempts by insurance carriers to control them, using coercive methods of regulation and market dominance, and neither managed-care nor burgeoning federal regulation has succeeded in bringing them under control. These measures have only succeeded in vastly increasing the complexity and resources required to provide health care. Physicians are under growing pressures of both time and energy to meet the extraordinary paperwork load and time requirements to master and comply with this excessive regulatory environment.

In arriving at some potential solutions to this growing crisis, I have attempted to go back to core principles based on an understanding of human nature and motivation, striving for three major goals: simplicity, transparency, and accountability. I am under no illusion that such changes in our massive, complex, and politically-charged system will be easy to implement. Nevertheless, it is time to begin rethinking our entire system, before its problems become so burdensome that the quality of our health care delivery deteriorates drastically. Whether the political and social will exist to make such drastic changes is, of course, a very open question.

We are currently expending a huge amount of resources simply sustaining the current system, which are therefore not available for the actual provision of health care. Hence we have health care costs taking an increasingly large percentage of the federal budget; health insurance premiums eroding employee earnings and employer profits; and decreasing access of patients to physicians due to financially unsustainable entitlement programs which no longer cover even the cost of providing care. The rapid-fire nature of our information-based society, with media and Internet, has tended to create an endless series of daily crises, many of which prove to be nonexistent over time. Meanwhile, under the radar, the health-care morass continues to grow into a gargantuan issue, with little fresh thinking, and little media attention given the magnitude of the problem and its potential to impact all of our lives.

I hope to put forward here a few simple ideas. I make no claim to any expertise in the area of health care policy, other than nearly 30 years of day-to-day patient care, with the resulting cumulative experience in a system which is rapidly becoming unworkable. Our health care system is extraordinarily complex, and I am not naive enough to believe that such simple ideas will solve every problem which its complexity and scope presents. Nevertheless, I believe that by applying core principles, rather than continuing on present flawed assumptions, the potential for genuinely profound changes in our health care delivery system is substantial.

Here are some proposals for reforming the health-care system.

♦ Pay physicians by time: In virtually every profession and avocation, including law, accounting, consulting, and most trades, the primary measure of one’s efforts is the time spent performing the task at which you are trained and skilled. The hourly rate will, of course, vary widely based on your profession, training, and expertise; but, by and large, the time you spend on a task is well-correlated with its economic value.

The exception to this, as I have pointed out in lurid detail in previous posts, is the health-care profession. We have evolved an extraordinarily complex system of service codes, diagnosis codes, and business rules and regulations which have become so convoluted and contradictory that virtually no one can master them. We hire additional employees, requiring specialized training, in an attempt to delegate much of these efforts, with only marginal success, as the rules are both constantly changing, and vary widely from one insurance carrier to another, one federal health-care program to the next. As a result, much effort and many resources are expended in simply getting properly and fairly reimbursed for one’s services and expertise. A physician who must expend substantial time and energy, and squander substantial business overhead, managing such a system is obviously no longer solely focused on the provision of his primary skill, the practice of medicine.

Paying physicians solely by time spent would, I believe, drastically alter this equation, and significantly change motivation and incentives to be more in line with what both physicians and patients seek. If you examine any study on patient’s complaints about the health-care system, you’ll find at the top of nearly every list of complaints two issues: physicians do not spend enough time with their patients, and patients have to wait too long to see the doctor. Of course, some of these complaints arise from physician personality problems or practice management issues–but in no small part, they arise from the perverse incentives and necessities generated by our current system. Since physicians are paid per unit service, it is in their best interest financially–and increasingly a financial necessity–to see as many patients as possible in order to generate sufficient revenue to sustain their increasingly costly medical practices. The high overhead thus required by extra employees and employee benefits, dictation costs, the overall rise in medical practice expenses and malpractice premiums, require that physicians often see as many patients as possible–thus resulting in over-scheduling and rushed visits.

Imagine how transformative it might be to simply pay the physician based on the time he spends with the patient. The incentives are suddenly flipped: the physician is now motivated to spend more time with you, since time is money. There’s no need to cram a high volume of services into one’s day to make ends meet, since you will be paid simply based on the time you have spent with patients–whether they be few or many. Practice overhead would drop drastically, as the need for highly-trained medical billers would disappear. Time is a very simple parameter to measure, and easily understood by both patients, physicians, and staff, reducing much of the confusion which now exists with our existing service code-based structure.

Paying physicians by time is not without challenges, obviously. Unlike legal or accounting services, for example, there are significant differences in the types of services provided by physicians to patients. Physicians may be engaged primarily in interacting with their patients in an office setting; in a hospital or intensive care unit; in surgery; performing procedures. While one might hope for a fixed hourly rate, for example, established by negotiation with an insurance carrier (more on this later) or set by the physicians themselves, different hourly rates for different broad categories of services may prove necessary. While time is in general an excellent indicator of complexity of service, there are circumstances in which time alone does not entirely reflect accurately on skill or expertise. For example, an inexperienced surgeon will likely take significantly longer on a given surgery than one who has many years of experience, since acquired surgical skills make for greater efficiency. Ultimately this may be solved by a system where more experienced physicians, or those with demonstrated efficiency and competency, recoup a better hourly rate. This would be consistent with other professions, where reputation, experience and expertise in given areas command higher hourly pay.

Some areas of medicine are not amenable to a time-based payment system: laboratory work, for example, and certain minor procedures. These might be better suited for alternative means of payment based on units rather than time. But a major move away from paying for most medical services based on multi-level service codes is highly desirable.

Time-based reimbursement would, with a single stroke, eliminate our inscrutable system of procedural and diagnosis codes, which are all but impossible to master, and which suck up extraordinary resources. If implemented fully, it is virtually certain that overall costs for medical care would decrease, as physicians would be able to significantly reduce their overhead, and therefore charge less to make a comparable income. Expensive electronic medical record systems (now touted as the savior of our health-care system, which they most certainly will not be) would no longer be mandatory, except as a convenience for documentation. Their current function is primarily that of automating complex coding rules and thereby keeping physicians one step ahead of federal and insurance auditors. Time is an extremely easy quantity to audit, and documentation could be reduced to core essentials, rather than pages of needless detail written simply to satisfy federal guidelines and insurance carrier requirements. Time is also an extremely easy parameter for patients to grasp: the doctor who bills a one-hour visit, when he only saw you for 15 minutes, is easily reported for dishonesty, whereas under the current system it is impossible for patients to assess whether their service coding is appropriate for their visit or not.

Time-based reimbursement would also provide an immediate reduction in the need for large federal and insurance bureaucracies, which exist now primarily to assess, review, monitor, and expedite reimbursement in our current labyrinthine system. Don’t be surprised, however, if such proposals would be vigorously opposed, especially by the insurance industry, which uses the complexity of the current system to reap bodacious profits. Complexity is bad for our health and bad for our economics–but is highly profitable for certain segments of the health-care economy, who by sheer size, market dominance, and massive resources have learned how to turn garbage into gold.

And this brings us to the second component of payment reform, which is health-care insurance:

♦ Dismantle the dysfunctional relationship between health-care payers and health-care providers: This one is going to ruffle some feathers. The current private health-care insurance industry makes huge profits by acting as the middleman between the patient and provider. They use the complexity of the system to deny payments for legitimate medical services, to reduce reimbursement to physicians, while raising premiums purportedly justified by climbing health-care costs. The insurance industry as it now exists represents a huge bureaucratic black hole, which sucks in massive amounts of health-care dollars in administration and profits for the company and their CEOs. An obscene percentage of health care dollars is now spent feeding this beast; it’s time to slay the dragon.

Here’s how I would structure the insurance industry to restore some sanity: I would mandate that universal catastrophic coverage be required for all, with very large deductibles, perhaps $25,000. While I am not generally a fan of mandates, the current formidable percentage of uninsured represents a huge tax on those who do carry insurance. In Washington state, for example, I cannot drive a car without car insurance; I cannot get a mortgage on my house without homeowners insurance. The reason for these requirements is simple: if disaster strikes, and I am uninsured, someone else has to foot the bill. Universal, catastrophic coverage, being broadly-based, would be relatively inexpensive; those who are unable to afford it could be subsidized through state or federal programs, via a system far simpler than our current Medicare or Medicaid eligibility system. Of course, this would involve means testing–which is the only rational way of providing federal subsidies to the poor and elderly, but anathema to the socialists in our midst. Relatively few people would be financially devastated by a loss of $25,000 for a major illness (although it would certainly be a financial strain for many), and therefore catastrophic coverage would protect against such a financial disaster–which often results in bankruptcy.

To cover this large deductible, secondary policies would be available, paid either by individuals or their employers. However these plans would not make payments to physicians; they would reimburse patients for their health care costs. The patients themselves would be the contact point for payment; they would be the ones who actually pay the physician’s bill. This was the original concept in health insurance, and it has many advantages.

First of all, there is simplicity: the patient pays the physician’s bill, submits the claim, and is reimbursed for all, or a portion, of their health-care expenses. The physician gets paid up front, which reduces his overhead, and allows him or her to charge lower fees; the patient knows exactly what his health-care costs are at the point of service. This provides accountability with the physician as well, who must explain to the patient why their fees are so high.

The patient and the insurance company then become direct, accountable business partners; when the insurance company refuses to pay their claim, it is the person paying the premium who knows about it immediately, who can then complain or seek redress directly with the insurance company. No more letters to patients about physicians providing “medically unnecessary” care; no more convoluted denials based on blackbox coding edits; no more long delays as the insurance company stalls payment, knowing that the physician’s practice is overwhelmed with countless other claims denials and may just write it off.

When the patient is denied reimbursement for their care, they will demand to know why, and if unsatisfied, will find another insurance carrier for their health-care coverage. Accountability and transparency are built into the system. Insurance companies would soon be out of the business of dictating which medical services are appropriate, and which are not–a role which has never been appropriate for a third-party insurer. Furthermore, this system would allow physicians flexibility to provide reduced fee or charity care for the needy, without the risk of becoming ensnared in federal fraud regulations or insurance contractual violations. Amazingly enough, if I choose to forgo a co-payment or deductible for a poor Medicare patient, I am guilty of fraud. That’s how perverse our current system has become. Want to accept a gift, or food, or a bottle of homemade wine for your services instead of cash? Fraud under the current system, but ennobling and satisfying for both patient and physician under this reform.

Lastly, in this system reform, I would

♦ Provide tax credits for physicians to see the poor. I have written about this previously. The number of uninsured individuals in our country is large and growing, and represents a genuine scandal for such a wealthy nation. The current Medicaid system is degrading for the individual who needs it, and is onerous and punitive for physicians who choose to accept their payments. For many–especially since the reform of the Medicaid system–such coverage is not even available as an option. Hence the uninsured pour into emergency rooms (where legally they cannot be turned away), where they receive expensive care without emphasis on prevention or adequate maintenance or follow-up.

The institution of tax credits–not deductions–would provide physicians with an immediate incentive to see the poor. It need not be on a dollar-for-dollar basis; there could also be a cap on this credit per year. In Washington state, over 50% of physicians no longer see Medicaid patients–not because they have a desire to deny care to these individuals, but because reimbursement rates are so low they no longer cover expenses, and because the system is punitive, bureaucratic, arbitrary, and complex. As a result, many Medicaid patients find it nearly impossible to find even primary care physicians who will see them, much less specialists. Medicare is not far behind in this shameful dereliction of responsibility. By providing tax credits to care for those who cannot afford insurance, physicians would have a direct financial incentive to see the poor, and the massive bureaucratic administration now managing Medicaid health-care payments would become obsolete overnight. The money saved by such bureaucratic reduction would go a long way toward subsidizing universal catastrophic coverage or meeting non-medical programs such as job training and housing.

There are, no doubt, many challenges with such a simplified approach to health care reimbursement: our health-care system is expensive, very complex, and many players have a vested interest in the system as it now stands. But for those of us on the front lines–physicians, other health-care providers, and patients–drastic changes must begin, lest our system implode under its own weight. The hurdles to change are far less conceptual and practical than political: one can only begin to imagine the heated rhetoric about greedy doctors, charges of abandoning the poor, and other verbal invectives which have become the currency of our dark political age. However, if we do not begin to move away from our current system, and demand that those whom we elect bring about such radical changes, we will have no one but ourselves to blame when the gleaming luxury liner of our health-care system runs aground on the jagged rocks of reality.

The Maze – Part 7
Is There an Exit? – I

This is a part of an ongoing series on medical coding, billing, and reimbursement.

Previous posts are here:

MazeWhat started off in concept as a few posts on some of the craziness in the medical billing and reimbursement arena has been turning into something of an opus magnum on the subject–yet surprisingly, even at that has not even touched upon all of the complexity or contradictions inherent in this maze of regulations, bureaucracy, and inefficiency which we call our health care system. Such systems–complex, increasingly unworkable and counter-productive–do not arise by design, but rather by a sort of perverse evolution, growing a brier here and a bramble there, creeping tentacles and spiraling vines sprouting to address difficult problems, but increasingly choking the life out of their intended benefactors, strangling both those in need of help and those committed to providing it.

A regular question in comments throughout this series has been, “What, then, are your solutions?” Fair enough question–it is far too easy to dissect and depreciate the medical system we have at once inherited and created: it is, in soldiers’ parlance, a “target-rich environment.” A house built on sand cannot stand — and the mansion of American medicine, still rich in grand gables and ornate glass, is sagging from a rotting foundation, swaybacked from footings set on unsteady soil. The termites eroding its timbers are many, rooted in men’s souls as much as in Senate halls. We demand the finest care for ourselves, sparing no expense to others. We demand perfection of those capable only of imperfection. We hide behind our terror of death, unspoken yet unrelenting, seeking false hope in technology and technique against that dark looming fortress which stands unbending against our extravagant but ultimately fruitless endeavors. We pass law upon law and regulation upon regulation, engorging a byzantine monster so immense it can no longer ambulate–yet still we feed the beast, hoping against hope it may someday become the chrysalis which will carry us to a better world. It will not, and can not, for it has not the wherewithal to do that which is most needed: its own dismantling.

The complexity of our current system is both the cause and the result of its dysfunctionality. We have created an environment of perverse motivation and punitive legalism. Patients are shielded from the true costs of their decisions by insurance rendered nearly free to them by their employers or the government. Physicians, seeing their medical decisions challenged and checkmated by capricious clerks and aggressive algorithms, work the complex system to outmaneuver its clear intent to squeeze more work from them for less pay, while their patients are denied the care they have recommended. Insurers, pressured by employers to cut spiralling premiums, make cold calculations from afar which infuriate physicians and injure patients. Attorneys play Monday-morning quarterback, second-guessing complex decisions years after the fact, before gullible juries with Jerry Springer ethics, reaping personal windfalls far exceeding the benefits of their wounded plaintiffs. And government, having opened the financial floodgates of health care entitlements, now seeks to stem the rising waters by sandbagging the banks rather than repairing the dam.

Each player in this dysfunctional drama plays their part, driven in no small part by incentives which drive up costs and increase inefficiency and complexity. Health insurance, while necessary to avoid financial disaster in a health crisis, serves also to buffer patients from the cost implications of their health care decisions. Costly and sometimes unnecessary tests, drugs, or treatments are demanded because “insurance pays for them”–and because media and internet hype inflate their usefulness while minimizing their risks and costs. End-of-life care is extraordinarily expensive in part because patients and families refuse to accept the inevitability of death. Physicians play along, fearing lawsuits if they do not–while themselves refusing to recognize their own impotence against death and the futility of their own technological railings against the darkness. Government, desperately trying to reign in rampaging health care costs, responds by increasing regulation and complexity while decreasing reimbursements–greatly escalating pressure on physicians to manipulate the complex rules for their patient’s welfare and their own financial survival–and compounding the risk that by doing so they will run afoul of its legal and ethical clutches.

To restore a measure of sanity to this system we must return to core principles and truths, long since lost in the maze of regulations and rules we have allowed our health care system to become. In attempting to arrive at a better way to deliver health care, it may be best to start first with doesn’t work–and why:

 ♦ Managed care: Managed care works–or at least it used to–as long as you defined its success as the reduction of health care costs. Managed care uses several models. Most involve the use of a gatekeeper–a primary care provider who is the übermeister of who, when, and where you as a patient get care. Need a specialist? No go, unless Herr Pförtner approves. Got to see that specialist (finally), who recommends you have an MRI or CT scan? Gotta get a piece of paper from the Gatemeister before you go. And in many arrangements, the primary care gatekeeper has strong financial incentives to Just Say No–or strong disincentives should he break down and say Yes. So for you to see that specialist, your family doctor has to: 1) do extra work, filling out and sending more paperwork and forms, and 2) lose money. Bet he or she finds some way to treat you without that visit or test. Even good, ethical doctors get beaten down by such a system.

Another variation on managed care makes the insurance carrier the gatekeeper, making decisions about what care you may have, under what conditions, by which doctors. If you like having your primary care physician giving a thumbs up or down on your tests and referrals, you’ll just love having this process run by insurance clerks, secret policies, and computer algorithms. Of course, the carriers constantly remind us they don’t practice medicine. They’re right, of course: no one would call making regular decisions about your access to referrals, tests, and medications purely for financial gain practicing medicine, no siree. Malpractice of medicine would be a better description.

Managed care saves money by restricting access to care–and hence it resulted, after its introduction, in a significant drop in health care costs. But patients got wise to the game, and became more demanding–and media stories about kids denied cancer treatment and women with breast cancer denied bone marrow transplants, made the managed care companies pariahs. And so, managed care was forced to become more flexible, allowing more specialty visits and looser restrictions on certain tests and procedures. The result? The savings melted away, and after several years of declining costs, premiums and costs for managed care are on the rise–at about the same rate as health care costs across the board.

 ♦ More regulations and harsher penalties for their violation: So here’s the plan: Medicare costing taxpayers tons of money, having covered all those eligible regardless of ability to afford care and opened the entitlement floodgates? Time to micromanage where all that money goes. Create highly complex rules about what services can be provided, under what circumstances, and then change them constantly based not on medical need or progress but simply to stem high cost areas. Make the rules so complex no one can understand them–then go after the bastards who are “cheating” the system by violating the rules. Well, fear works–up to a point. Most doctors will try to ignore the rules and simply code at lower service levels to minimize their risks and the time needed to master the maze; others will buckle down and try to master them. Then, when even this doesn’t work to stem costs, it’s time to lower reimbursement levels. Eventually, this brilliant plan–increasing the costs of providing care while paying less–will result in payments which fall below the costs of providing the care–and doctors either have to game the system to stay afloat, or stop seeing federally-insured patients. The end result: more “fraud”–and rapidly shrinking health care access for covered patients (the elderly, disabled and the poor). Brilliant theory, Einstein. Got any more like that?

 ♦ Paying for quality: This is one of the latest gimmicks the health care policy wonks have dreamed up, more commonly known as pay for performance. It’s based on the (highly disputable) notion that bad doctors are running up the cost of care by ordering unnecessary tests, recommending unneeded procedures and surgery, practicing costly medicine which lies outside the mainstream–renegades all, ransacking the health care treasury. The good guys in the white hats, on the other hand, walk carefully between the lines, following established standards of care, don’t cost the system nearly as much–and should be rewarded with better reimbursements.

Ten solid seconds of thought by anyone with an IQ over 50 should see problems with this idea. A superbly-trained physician saving the life of a desperately ill patient, on a ventilator in an ICU, will be spending a whole pile of money–whereas ol’ Doctor Feelgood, passing out antibiotics for your sniffles and pain pills like candy may not be spending many health care dollars at all. High quality — while not invariably more expensive–is often so. And what about those guidelines? Well, one problem is, by and large, they don’t exist — except in a few relatively straightforward areas of medicine. The reason, in no small part, is that quality medical care is a complex and constantly moving target: what was excellent care ten years ago may be marginal or even poor care today. Once you ossify guidelines into regulations governing payment, you run a great risk of freezing health care advancement. You will be paid for care meeting the guidelines–but not for better care, based on advances in medical knowledge and technology, which will tend to fall outside the guidelines. And any physician who thinks they’ll get paid more for following the guidelines needs a long session on Dr. Sanity’s couch: they will pay those physicians not meeting the guidelines a lot less, and the “good guys” better than them — but still less.

I could continue, but enough of bad ideas. More of the same is not the answer to our health care system. In my next post I hope to lay out a few ideas which are based, I believe, more solidly on reducing complexity and aligning our health care more solidly along the lines of simplicity, accountability, and transparency. Stay tuned, back soon.

The Maze – Pt 6
The Nigerian Health Care Plan

This is a continuation of a series on medical coding, billing, and reimbursement.

Previous posts are here:

See no evil
OK, I have a business deal to offer you:



With due regards, I take the liberty to contact you for an urgent business transaction which will be of immense benefit to all parties concerned. I am Mr Kingsley Chiugo, the Chairman of the contract Tenders Board of Nigeria National Petroleum Corporation, (NNPC).

My committee has the responsibility for the recommendation and award of contracts and supplies for the NNPC. In the course of our assignment, we did over-inflate the contracts for some supplies to the NNPC as a result of which the sum of USD $25.8m (Twenty five million, Eight Hundred Thousand United States Dollars only) is now outstanding. The original contractors who executed the jobs have since been fully paid off, leaving this outstanding sum. Unfortunately, we as civil servants are not allowed to own or operate a foreign account and it is also not possible for us to withdraw the money here locally.

We therefore need your kind assistance to transfer this outstanding sum of USD $25.8m to your account anywhere very safe. We shall compensate you with 25% of the funds for your assistance after the transfer. We the officials here shall have 65% while 10% will be set aside for any incidental expenses.

Oh, wait–you know about that one, and you’re not interested… OK, so here’s another–and this one’s for real:
Continue reading “The Maze – Pt 6
The Nigerian Health Care Plan”

The Maze – Part 5
Medical Coding: Compliance Penalties

This is a continuation of a series on medical coding, billing, and reimbursement.

Previous posts are here:


As most folks still drawing breath know, health care spending is rising at an alarming rate. The reasons for these spiraling costs are manifold: the introduction of expensive new technologies; an aging population; the detachment of financial responsibility for health care from the individual and positing it with employers and the federal government–just to name a few. The health care system in the U.S. is highly complex–scientifically, socially, and financially–and therefore finding workable solutions to such problems would be daunting even in a perfect world. But in a political world, creating functioning complex compromises, or fundamental redesign of programs, payment methodologies, and incentives, has become an utterly unachievable goal. So when constituents demand an instant, painless “fix” for skyrocketing budgets and health insurance premiums, there is one apparition which can always be called forth like Hamlet’s Ghost: stamping out fraud and abuse.
Continue reading “The Maze – Part 5
Medical Coding: Compliance Penalties”

The Maze – Part 4
Medical Coding: Compliance Programs

This is a continuation of a series on medical coding, billing, and reimbursement.

Previous posts are here:

GorillaThere–glad you’re back. Hope you enjoyed your lunch. I know after a meal we all tend to get a little drowsy. So to keep you from dozing off, I thought I’d tell a really, really scary story.

A number of commenters have asked the question, in so many words: “How did physicians ever allow this crazy system to come to pass?”

Good question.

And the answer is easy: when you dance with an 600-pound gorilla, the dance ain’t over ’til the gorilla says it’s over.

The gorilla, of course, is the federal government, and the dance, the provision of health care services covered under federal programs such as Medicare and Medicaid. For most medical practices treating adult patients, Medicare constitutes a significant percentage of total patients in a practice–and therefore a substantial percentage of income. One cannot accept federal reimbursements for medical services without being subject to federal regulations and restrictions. Since the vast majority of patients over the age of 62 are covered by Medicare, you’re pretty much stuck with the gorilla. She ain’t pretty, but she’s the only gal available–and she sure can dance.
Continue reading “The Maze – Part 4
Medical Coding: Compliance Programs”