American College of Physicians: Internal Medicine — Doctors for Adults ®

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Monday, February 11, 2013

Gouging

It has always been my assumption that my new practice will be as "digital" as possible. No, I am not going into urology, I am talking about computers.

[Waiting for the chuckles to subside.]

For at least 10 years, I've used a digital EKG and spirometer that integrated with our medical record system, taking the data and storing it as meaningful numbers, not just pictures of squiggly lines (which is how EKG's and spirometry reports appear to most folks). Since this has been obvious from the early EMR days, the interfaces between medical devices and EMR systems has been a given. I never considered any other way of doing these studies, and never considered using them without a robust interface.

Imagine my surprise when I was informed that my EMR manufacturer would charge me $750 to allow its system to interface with a device from their list of "approved devices." Now, they do "discount" the second interface to $500, and then take a measly $250 for each additional device I want to integrate, so I guess I shouldn't complain. Yet I couldn't walk away from this news without feeling like I had been gouged.

Gouging is the practice of charging extra for someone for something they have no choice but to get. I need a lab interface, and the EMR vendor (not just mine, all of the major EMR vendors do it) charges an interface fee to the lab company, despite the fact that the interface has been done thousands of times and undoubtedly has a very well-worn implementation path. This one doesn't hurt me personally, as it is the lab company (that faceless corporate entity) that must dole out the cash to a third party to do business with me.

Doing construction in my office, I constantly worry about being gouged. When the original estimate of the cost of construction is again superseded because of an unforeseen problem with the ductwork, I am at the mercy of the builder. Fortunately, I think I found a construction company with integrity. Perhaps I am too ignorant to know I am being overcharged, but I would rather assume better of my builders (who I've grown to like).

Yet thinking about gouging ultimately brings me back to the whole purpose of what I am doing with my new practice, and what drove me away from the health care system everyone is so fond of. If there is anywhere in life where people get gouged or are in constant fear of gouging, it is in health care. Here are some obvious examples.

Prescription drugs are priced at a level that none but the wealthiest can afford to pay. Seriously, if health insurance did not subsidize the price of brand-name drugs, who would ever buy them? The argument has always been that the research needed to develop new drugs is staggeringly high, but that rings hollow when granny hears about the record profits by the drug company who makes the $150/month cholesterol drug she takes. The truth is, the drug companies can gouge because the subsidies enable them to do so (see a previous post on this).

The argument of why prescription drugs cost so much rings even more hollow when one looks at generic drug costs. These companies don't have to do the R&D to develop the drug (although now many of the brand manufacturers also make the generic). Why then does the cost not drop for many drugs when they go generic? The FDA, in limiting generic manufacturers and hence limiting competition, as well as the deals between pharma and the insurance industry, allows gouging to flourish after patent expiration.

Hospitals are famous for charging $10 for a Tylenol tablet. Why? Because the patient has no choice and the insurance company (inexplicably) pays for it.

Then I turn my eyes to my old practice, and what I used to do. There is plenty of gouging going on there as well.

To run the business successfully, we must charge the highest price possible for any given service we offer. We do this because different insurance plans pay different amounts for the same procedure (be it an office visit, a laceration repair, a strep test, or an immunization).

The differences are often very large. If we overcharge a given procedure for an insurance plan, they simply pay what we agreed to accept from them and we write off the rest. But we still charge much more than we expect to get from 99 insurance plans if 1 will pay us the high amount. So what happens to people who don't have insurance (or have high-deductible plans)? They get gouged at the rate we don't expect out of the 99 insurance companies. If we discounted them, we'd be breaking contract with the insurance plans (and perhaps committing Medicare fraud).

Another way to run the business successfully is to charge for everything possible associated with a visit. When I saw a child for wellness and immunizations, for example, I billed for the following:
--I code for the Well Visit itself;
--If there are any sick complaints (stuffy nose, etc) I can tack on a sickness charge for some insurance plans;
--I can charge for each vaccine administered, as well as an "administration fee" for the nurse giving it; and
--I can also get paid by many plans for counseling regarding the immunizations and documenting the counseling given.

The end result is a long list of items the patient sees on the bill, most of which are there for the sole purpose of getting everything I can out of the insurance company. While many (including me) would argue that this is just me getting what I deserve from the insurance company, to the patient it looks an awful lot like I am gouging.

I could go on, and the list would be quite long and very damning, but I probably should get to my main point.

As I near the opening date of my new office, I am faced with decisions about what services I am going to offer my patients for their monthly fee. Whatever I feel about the value of what I am offering, a patient's commitment to pay even $30/month comes with the obvious question: what will I get for my money? My initial list included:
--office visits,
--office labs,
--management of problems over the phone or via online services,
--my health education site,
--access to medical records, and
--a personal health record.

Yet these don't convince many people who are basically healthy and want to avoid doctors' offices. They see the reality; it's cheaper to be healthy. Yet they also realize that they don't control this, and so they look for more value. This has been a big part of my mission over the past month: to justify the monthly fee for patients. Here are some additional savings I have found.

I can draw labs in the office and send them to a local lab, which charges me much less to run them. For the 37 tests on the list, the sum total cost for 1 of each is $530, compared to the $3,100 it would cost if the patient went to the lab.

I am negotiating to do the same with radiology tests, having patients pay me directly to get a discounted rate from the radiology facility.

I can do the same with generic drugs, dispensing them at a wholesale price, saving a whole lot over what they would pay at most pharmacies.

Each of these entities pointed out that I could mark up the price and make a tidy profit on each of these services. This is what most docs do when they bill labs, X-rays or dispense drugs. But if my goal is to give value to my patients so they feel the monthly fee is justified, these profits would likely hurt me in the end.

And this is when I understood.

Charging the monthly fee puts me in a position where I am no longer motivated to gouge. I am already paid for the month, so now I have to prove value. I have no motivation to bring people to the office for visits they don't need; I can handle them on the phone or online. I don't have to charge for every little thing I do. Heck, I can lose money on things like drugs or labs and still come out ahead. The better value I give to my patients, the happier they are, and the more likely they will continue to pay the monthly fee.

And I don't have to apologize any more for every additional charge. It's a really nice change.

Imagine that: a doctor actually trying to save money for his patients.

After taking a year-long hiatus from blogging, Rob Lamberts, MD, ACP Member, returned with "volume 2" of his personal musings about medicine, life, armadillos and Sasquatch at More Musings (of a Distractible Kind), where this post originally appeared.

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Blog log

Members of the American College of Physicians contribute posts from their own sites to ACP Internistand ACP Hospitalist. Contributors include:

Albert Fuchs, MD
Albert Fuchs, MD, FACP, graduated from the University of California, Los Angeles School of Medicine, where he also did his internal medicine training. Certified by the American Board of Internal Medicine, Dr. Fuchs spent three years as a full-time faculty member at UCLA School of Medicine before opening his private practice in Beverly Hills in 2000.

And Thus, It Begins
Amanda Xi, ACP Medical Student Member, is a first-year medical student at the OUWB School of Medicine, charter class of 2015, in Rochester, Mich., from which she which chronicles her journey through medical training from day 1 of medical school.

Auscultation
Ira S. Nash, MD, FACP, is the senior vice president and executive director of the North Shore-LIJ Medical Group, and a professor of Cardiology and Population Health at Hofstra North Shore-LIJ School of Medicine. He is Board Certified in Internal Medicine and Cardiovascular Diseases and was in the private practice of cardiology before joining the full-time faculty of Massachusetts General Hospital.

Zackary Berger
Zackary Berger, MD, ACP Member, is a primary care doctor and general internist in the Division of General Internal Medicine at Johns Hopkins. His research interests include doctor-patient communication, bioethics, and systematic reviews.

Controversies in Hospital Infection Prevention
Run by three ACP Fellows, this blog ponders vexing issues in infection prevention and control, inside and outside the hospital. Daniel J Diekema, MD, FACP, practices infectious diseases, clinical microbiology, and hospital epidemiology in Iowa City, Iowa, splitting time between seeing patients with infectious diseases, diagnosing infections in the microbiology laboratory, and trying to prevent infections in the hospital. Michael B. Edmond, MD, FACP, is a hospital epidemiologist in Richmond, Va., with a focus on understanding why infections occur in the hospital and ways to prevent these infections, and sees patients in the inpatient and outpatient settings. Eli N. Perencevich, MD, ACP Member, is an infectious disease physician and epidemiologist in Iowa City, Iowa, who studies methods to halt the spread of resistant bacteria in our hospitals (including novel ways to get everyone to wash their hands).

db's Medical Rants
Robert M. Centor, MD, FACP, contributes short essays contemplating medicine and the health care system.

Suneel Dhand, MD, ACP Member
Suneel Dhand, MD, ACP Member, is a practicing physician in Massachusetts. He has published numerous articles in clinical medicine, covering a wide range of specialty areas including; pulmonology, cardiology, endocrinology, hematology, and infectious disease. He has also authored chapters in the prestigious "5-Minute Clinical Consult" medical textbook. His other clinical interests include quality improvement, hospital safety, hospital utilization, and the use of technology in health care.

DrDialogue
Juliet K. Mavromatis, MD, FACP, provides a conversation about health topics for patients and health professionals.

Dr. Mintz' Blog
Matthew Mintz, MD, FACP, has practiced internal medicine for more than a decade and is an Associate Professor of Medicine at an academic medical center on the East Coast. His time is split between teaching medical students and residents, and caring for patients.

Everything Health
Toni Brayer, MD, FACP, blogs about the rapid changes in science, medicine, health and healing in the 21st century.

FutureDocs
Vineet Arora, MD, FACP, is Associate Program Director for the Internal Medicine Residency and Assistant Dean of Scholarship & Discovery at the Pritzker School of Medicine for the University of Chicago. Her education and research focus is on resident duty hours, patient handoffs, medical professionalism, and quality of hospital care. She is also an academic hospitalist.

Glass Hospital
John H. Schumann, MD, FACP, provides transparency on the workings of medical practice and the complexities of hospital care, illuminates the emotional and cognitive aspects of caregiving and decision-making from the perspective of an active primary care physician, and offers behind-the-scenes portraits of hospital sanctums and the people who inhabit them.

Gut Check
Ryan Madanick, MD, ACP Member, is a gastroenterologist at the University of North Carolina School of Medicine, and the Program Director for the GI & Hepatology Fellowship Program. He specializes in diseases of the esophagus, with a strong interest in the diagnosis and treatment of patients who have difficult-to-manage esophageal problems such as refractory GERD, heartburn, and chest pain.

I'm dok
Mike Aref, MD, PhD, FACP, is an academic hospitalist with an interest in basic and clinical science and education, with interests in noninvasive monitoring and diagnostic testing using novel bedside imaging modalities, diagnostic reasoning, medical informatics, new medical education modalities, pre-code/code management, palliative care, patient-physician communication, quality improvement, and quantitative biomedical imaging.

Informatics Professor
William Hersh, MD, FACP, Professor and Chair, Department of Medical Informatics & Clinical Epidemiology, Oregon Health & Science University, posts his thoughts on various topics related to biomedical and health informatics.

David Katz, MD
David L. Katz, MD, MPH, FACP, is an internationally renowned authority on nutrition, weight management, and the prevention of chronic disease, and an internationally recognized leader in integrative medicine and patient-centered care.

Just Oncology
Richard Just, MD, ACP Member, has 36 years in clinical practice of hematology and medical oncology. His blog is a joint publication with Gregg Masters, MPH.

KevinMD
Kevin Pho, MD, ACP Member, offers one of the Web's definitive sites for influential health commentary.

MD Whistleblower
Michael Kirsch, MD, FACP, addresses the joys and challenges of medical practice, including controversies in the doctor-patient relationship, medical ethics and measuring medical quality. When he's not writing, he's performing colonoscopies.

Medical Lessons
Elaine Schattner, MD, FACP, shares her ideas on education, ethics in medicine, health care news and culture. Her views on medicine are informed by her past experiences in caring for patients, as a researcher in cancer immunology, and as a patient who's had breast cancer.

Mired in MedEd
Alexander M. Djuricich, MD, FACP, is the Associate Dean for Continuing Medical Education (CME), and a Program Director in Medicine-Pediatrics at the Indiana University School of Medicine in Indianapolis, where he blogs about medical education.

More Musings
Rob Lamberts, MD, ACP Member, a med-peds and general practice internist, returns with "volume 2" of his personal musings about medicine, life, armadillos and Sasquatch at More Musings (of a Distractible Kind).

Prescriptions
David M. Sack, MD, FACP, practices general gastroenterology at a small community hospital in Connecticut. His blog is a series of musings on medicine, medical care, the health care system and medical ethics, in no particular order.

Reflections of a Grady Doctor
Kimberly Manning, MD, FACP, reflects on the personal side of being a doctor in a community hospital in Atlanta.

The Blog of Paul Sufka
Paul Sufka, MD, ACP Member, is a board certified rheumatologist in St. Paul, Minn. He was a chief resident in internal medicine with the University of Minnesota and then completed his fellowship training in rheumatology in June 2011 at the University of Minnesota Department of Rheumatology. His interests include the use of technology in medicine.

Technology in (Medical) Education
Neil Mehta, MBBS, MS, FACP, is interested in use of technology in education, social media and networking, practice management and evidence-based medicine tools, personal information and knowledge management.

Peter A. Lipson, MD
Peter A. Lipson, MD, ACP Member, is a practicing internist and teaching physician in Southeast Michigan. The blog, which has been around in various forms since 2007, offers musings on the intersection of science, medicine, and culture.

Why is American Health Care So Expensive?
Janice Boughton, MD, FACP, practiced internal medicine for 20 years before adopting a career in hospital and primary care medicine as a locum tenens physician. She lives in Idaho when not traveling.

World's Best Site
Daniel Ginsberg, MD, FACP, is an internal medicine physician who has avidly applied computers to medicine since 1986, when he first wrote medically oriented computer programs. He is in practice in Tacoma, Washington.

Other blogs of note:

American Journal of Medicine
Also known as the Green Journal, the American Journal of Medicine publishes original clinical articles of interest to physicians in internal medicine and its subspecialities, both in academia and community-based practice.

Clinical Correlations
A collaborative medical blog started by Neil Shapiro, MD, ACP Member, associate program director at New York University Medical Center's internal medicine residency program. Faculty, residents and students contribute case studies, mystery quizzes, news, commentary and more.

Interact MD
Michael Benjamin, MD, ACP member, doesn't accept industry money so he can create an independent, clinician-reviewed space on the Internet for physicians to report and comment on the medical news of the day.

PLoS Blog
The Public Library of Science's open access materials include a blog.

White Coat Rants
One of the most popular anonymous blogs written by an emergency room physician.

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