As I See It

When the Middleman Rules

What happens to a healthcare system where insurers make the decisions for doctors?

By Paul S. Koch, M.D. Editor Emeritus

Imagine for a moment that you practice in Connecticut where a company that funds a risk pool insures your patients. Ten percent of your earnings are withheld until after all the bills are covered and the company executives receive their checks. They get paid first; you get paid second.

Imagine also that you are a glaucoma specialist in the same state and that you obtain all the necessary tests to evaluate and monitor each patient. You are proud of the wonderful care you provide, but not so the insurance company. The company informs you that your testing utilization is higher than the average ophthalmologist's and so the company decides to keep the withheld earnings. You are penalized 10% of your income because you practiced the standard of care. Too bad you did all those visual fields tests.

But, you argue, I am a specialist providing specialty care. "That's not our problem," they reply. Our computer says your specialty is ophthalmology, not glaucoma. You decided to accept patients who need a lot of testing. That's your problem."

Time to Move

Piqued, you move north to Taxachusetts and begin seeing some of the 1.2 million state employees. They have an incentive to see excellent doctors like you. They pay lower co-pays when they see Tier One doctors (those who provide quality and efficiency) and higher co-pays if they see Tier Two doctors (lesser quality and inefficient).

A colleague refers a difficult glaucoma patient to you for a filter, sending along all the tests obtained during the year. You review the tests and perform the surgery, quickly and efficiently. To your surprise, you are reassigned to bad-doctor Tier Two. Why? Because when you treated that patient, your "account" was assigned all the tests the previous doctor performed. And as the testing utilization rate of the previous doctor was at a rate higher than the average ophthalmologist, the company pushed you into the high-testing group.

No good, so you move down the road to Rhode Island where there's a new plan to help patients see family practitioners. They pay $30 a month retainer to the doctor, and after that office visits are only $5 each. Unfortunately, those patients don't realize that the program only works for the doctor getting the retainer, so when that patient gets glaucoma and comes to see you, they expect you to charge them only $5.

Middleman Economics

People want food; they buy it. They want a house; they pay a mortgage. No matter where they go, people pay for the products they receive.

Not so in medicine. We have middlemen who receive no value from the services they purchase. The business of the insurance company is to maximize what it gets in premiums and minimize what it pays out. It's simple economics: The premiums are revenue; the doctors are expense.

Meanwhile, the patients are isolated from the money exchange. Their employers give them medical benefits — your services — and naturally, they want to take advantage of every benefit they have. To them, you are an entitlement.

Caught in the Middle

Patients expect you to work, and the insurers scheme to pay you less. You are caught in the middle. You know the drill. "Doctor, we aren't telling you how to practice medicine, we are telling you only what we will pay. Do whatever you think is in the patient's best interest. We just won't pay you, and don't forget, you're not allowed to charge the patient either."

Will the political candidates who are successful this fall push for a health system that fairly compensates providers for their work, or will they perpetuate a system that considers us an entitlement ("… affordable healthcare that you deserve!")

What am I, hallucinating? Ha! Nine years to retirement. OM