Audacity of Reality: Patients must pay for health care

03 Mar Audacity of Reality: Patients must pay for health care

Audacity (ô-dăs’ĭ-tē) n.

  1. Fearless daring; intrepidity.
  2. Bold or insolent heedlessness of restraints, as of those imposed by prudence, propriety, or convention.

I read with amusement this article on the idea that doctors have the audacity of to be charging for their services at the time they provide them. Just think about that for a minute – people upset about the fact that they have to pay for a service they receive.

  • “How dare the movie theater demand I pay before seeing the movie?”
  • “Can you believe I had to actually pay for this suit before they let me wear it home?”
  • “Man, the airlines are killing me by asking me to actually pay for my flight before I have actually flown!”
  • “My lawyer asked for a retainer before she agreed to take my case – can you believe it?”

Of course, these are absurd notions. So why is health different? Why should we think about it differently than we do anyone of our assets that is valuable enough to warrant financial protection (insurance), active management (you wish you knew what to do with your portfolio), and even a trusted advisor (you wish yours knew what to with your portfolio as well!) to guide you through the decision making process.

The article reveals the fundamental, deep, and pervasive misalignments in how we pay for health care. Highlights are mine:

When Nicole Atkinson, 29, of Baltimore scheduled the first obstetrics appointment of her pregnancy last year, she knew the experience would come with its share of surprises. But Atkinson wasn’t at all prepared for a financial one: a request to pay up her full deductible — $600 — before the doctor would see her for the exam.

“So, I fired her,” says Atkinson, who then switched doctors to one who charged only a co-pay for each visit.

But if Atkinson decides to have another baby, she may not be able to avoid that balloon payment. More and more physicians are asking for the patient’s share of that day’s medical fees, including any deductible set by the insurer, at the time of the visit.

“It’s a paradigm shift from what most consumers are used to at their doctor’s office,” says Red Gillen, a San Francisco-based analyst with consulting firm Celent, who last month published a report on doctors seeking upfront payment from their patients . . . According to Gillen, consumer out-of-pocket spending as a percentage of all health-care spending rose to 12 percent last year, and is expected to continue rising.

A survey published by the Kaiser Family Foundation in September, found that 18 percent of people who responded were covered by insurance plans with deductibles of at least $1,000, up from 12 percent the year before. “Until now,” Gillen says, “insured patients would see a doctor, leave a co-pay and then watch a series of insurance and physician envelopes come through the mail over weeks to months, until finally one detailed the actual amount, if any, to be paid by the patient.” Now, largely through new software programs that assess both a patient’s insurance coverage and the day’s charges, those weeks to months are often collapsed into just minutes for an estimate, or even a full adjudication of the bill.

Owe, say, $90 for a sore throat checkup with at least that amount of a deductible still to be paid, and an increasing number of practices will request $90 that day, plus a co-pay if your insurance includes one.

At one doctor’s office, just blocks from the White House, a video screen in the waiting area tells patients that if they don’t have their insurance card, the practice would be happy to “reschedule your appointment.” That practice also asks that the co-pay be coughed up before the patient sees the doctor and calls patients in arrears to a window in full view — and earshot — of other waiting patients.

Those are more draconian measures than many doctors follow. But few providers let patients head home these days without either some payment or a definitive plan for how to pay their share of the bill.

“This combined information is gathered prior to preregistration and is presented to the patient,” says Faria, who adds that “once a patient has a clear idea of what their coverage will cover and what their cost will be, a meeting with our financial counseling office is arranged.”

Mark Rukavina, executive director of the Access Project, a health-care advocacy group in Boston, says finding out how much patients owe right away, rather than hanging in limbo for weeks to months, is a positive.

One payment option will be a credit card. “It’s a myth that people only use their credit cards for flat-screen TVs,” says Tim Westrich, a research associate who specializes in credit issues at the Center for American Progress, a D.C. think tank. “If you’re already financially stressed, a credit card could be your only pressure valve,” Westrich says.

But some guidance on use of the cards for medical expenses, especially unexpectedly higher ones, could help prevent extra charges and higher interest rates. Rukavina advises patients to never use a credit card that must be paid up monthly unless they are prepared to do so. If they don’t pay on time, a $30 flu shot can cost an extra $30 or so for the late fee, plus trigger higher interest rates.

Celent’s Gillen says that as consumer share of medical expenses increases, he expects banks to issue interest-free health-care-specific credit that might be linked to payrolls for deductions and even offer discounts for users. (Some health-care-only cards exist now but are generally intended for elective health expenses such as Lasik and plastic surgery. They generally start with 0 percent interest but trigger a percentage increase if payment is late or missed.)

Bottom line is we need to transition our health care system to one that pays for value – including patient’s paying for value at the time of service just like they do with their clothes, their TV’s, and their cars. Insurance plays a key role by preventing catastrophic loss but we need to be prepared to pay the maintenance fees on our health assets. We need to save, plan, work toward goals, and be accountable for our health care.

Moving toward a value based health system that competes based on results (instead of zero sum cost shifting gimmicks) will help achieve the audacious goal of creating the next generation health care system.

6 Comments
  • Evan Green
    Posted at 20:56h, 04 March Reply

    Oops! All this time I thought Doctors were not interested in money – at least that’s what most of them will have you believe. I recommend that patients make a concerted effort to negotiate fees and investigate services before they finalize an appointment. Bt the way, why don’t doctors consider paying their vendors in advance for services? It seems to me that doctors for the most part have the most difficulty purchasing products/services for their offices – they nickel and dime vendors all the time while taking forever to make a decision. Doctors have to be the cheapest group of people I’ve met but they seem to take good care of themselves – most make over 100k while many make 400k and others well over that.

  • R Sosa
    Posted at 05:22h, 10 March Reply

    Of course doctors are interested in money…they’re in business just like you, with bills to pay and families to feed. Unlike you, they also have devoted over a decade of their lives beyond high school to learn the skills necessary to improve your quality of life, twenty-four hours a day, seven days a week. Someday one might even save your life. No one is forced to choose medicine as a career but you should certainly be thankful that some do…for the extraordinary sacrifice they make to provide those services, they are more than entitled to whatever income they can achieve. The Hippocratic Oath does not include a vow of poverty. Do Michael Jordan or Tom Cruise contribute anything nearly as valuable to you and your family? Your comments betray some jealousy of those in the medical field…perhaps your energies should be applied at being a better salesman.

  • Donald Noit
    Posted at 17:32h, 24 March Reply

    OK, the problem is not that the doctors charge money upfront. Doctors have a right to that. The issue is that they cost so much more than the average person can afford. The average US resident earns $22000 p/y or $423 per week before taxes, maybe $300 after taxes. A 15-20 minute encounter with a physician costs $120 and medicines cost another $50 on average.
    So if an average person has to go to the doctor twice a month for a visit (say for self and a child), the family has exhausted a full week’s income: a QUARTER of their monthly earning. Only in a few countries like the US does one see such an absurdity. Contrast a doctor’s service cost to that of a PhD in Engineering who earns on avg about $100,000 p/y after significant expenses and time in University education like a doctor. The PhD’s services cost society (his/her employer) $1923 per week or $384 per workday or $48 per hour or $12 for 15 minutes. Even if he provides consulting service at $100 per hour (near the top), the doctor’s cost of service would be three to four times as much per hour.

  • Health Care
    Posted at 05:05h, 03 April Reply

    Great ! i going through the whole article i find it very interesting and informative,the patient should take care of themselves and obey the doctors advice.

  • Jeremy M
    Posted at 20:49h, 18 July Reply

    I love this blog! A few things to consider for those that posted.
    1- Understand that practices that accept insurance are PRICE FIXED by Medicare Allowables. And, in most markets, commercial insurers contract at BELOW Medicare rates. Which, while our vendors increase their prices, from suppliers to professional liability insurance companies, WE CANNOT ADJUST our fees for inflation. Furthermore, CONGRESS has legislated reductions in reimbursement. So while other companies can raise fees for COGS, we cannot. BTW, CONGRESS has legislated further paycuts.

    2- The notion that doctors are getting rich on the 6-figure salaries we earn is rediculous! Take a look at the annual salaries report by the AMA. Understand most of us work 60-80 hours per week, are on call 24/7! So if a Family Doc makes $120K for 60 hrs/week, with at least 11 years of post high school training, that’s hardly “getting rich.” Yes, while some will make much more than that in specialty practices, for the most part, we earn less, dollar-for-dollar, hour-per-hour than our salespeople, hospital administrators, airline pilots, and some public servants. Oh, and BTW, just cause you’ve been on the job 15 years doesn’t mean you make more, less in fact.

    3- Liability. Do you realize the internet, the yellow pages and the newspaper is littered with ads from personal injury attorneys that practically scream “sue your doctor!” So let me get this straight, I go to schol until I’m 30, rack up enourmous debt, do my very best to provide the best care possible, and if you don’t like your outcome, you sue me. And I get a trial of my “peers” who know nothing of science, medicine, or standards of care and risk everything. I’ve heard it said that the average Primary Care doc gets sued every 7 years, or 4.5 times over a 30 year career.

    4- Overhead expense- To Mr. Noit above, again I will state that physician fees are not set by the physician, they are set by Medicare Fee Schedules- by CMS and by OIG, not by the docs. Keep in mind that 50% of my fees go to employing my support staff, keeping the lights on, paying for health insurance for my staff, paying the ever-increasing rent. Our costs are not going down, but our reimbuirsement is! Therefore, we have to think faster, make faster decisions,”move people through” our offices.

    Today’s Family Physician earns the equivalent income as one did 25 years ago!
    Here’s what’s to come: The landscape of medicine is changing so rapidly. The best and brightest are no longer choosing medicine. Today’s Gen Y’ers are more interested in lifestyle. They are unwilling to do the delayed gratification, and hard work it takes. The practicing doc, like me, is unwilling to sacrifice time spent with their children and spouse. Unwilling to accept the 75% divorce rate, 10 year reduced life expectancy, increased rate of alcoholism and addiction. What you will see in the future is more nurse practitioners, PA’s. You will see more “walk-in” clinic care in Wal-Mart. Your employer sponsored health plan will probably prefer you to use the “look-out falling prices Wal-Mart health care.” You will see more physicians here on work visa’s from other countries. You will see LESS care being delivered. Oh, and yes, you will have to pay MORE for your health services, because your employer will be paying LESS, if at all.

    So, if you have a good, affable, well-trained primary care physician. Thank them for working long hours, thank their families who put up with 20 years of educational loan repayment, thank them for spending a few extra minutes with you, or asking about your wife, your kids, or how you are faring in this ecomony. Pay them what they are worth! And quit complaining about it, because chances are, you have no clue how it is on this side of the fence!

  • doctors pension plan
    Posted at 04:36h, 04 November Reply

    Excellent blog here! Additionally your web site lots up very fast! What web host are you using? Can I get your associate link to your host? I wish my web site loaded up as fast as yours lol

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