Frivolous Lawsuits.

[Phoenix44]

HMOs can pay doctors so little because they negotiate contracted rates on a massive scale. This is a natural act in the free market that so many conservatives claim to worship.

This is actually a fallacy that is misunderstood by the public. HMOs do not "negotiate contracted rates." They set fees, and doctors must accept them. It is NOT a free market.

Suppose Aetna Health Plans pays $27 for a 1-hour new patient medical evaluation. Now you know full well that an hour of doctor time, including rent, staff, and overhead costs the doctor more than $27. Hell, it costs more for a nice haircut. Doctors cannot "negotiate" that fee. They can take it or leave it. In other words, they can choose to participate in Aetna Health Plans or not. But if they don't, then the 10,000 patients with Aetna insurance that live in their town will not be coming to those doctors.

Maybe you're thinking, well, OK, they can participate in Oxford Health Plans, or HIP. But THOSE plans also pay a non-negotiable $27, and they "own" another 23,000 patients.

What happens is that doctors can't spend an hour on an evaluation, and the patient feels that they've been given the bum's rush.

And, BTW, it is illegal for doctors to organize into groups (ie "unions") to negotiate fees.

And here's where the lawsuit part comes in: if the HMO denies a service, and the patient is harmed because of that, the DOCTOR gets sued...the HMO is exempt.

 

[PeachMonkey]

Melissa,

The articles you quote are a press release from a Republican governor claiming that his version of tort reform will work, and a list of rural doctors who are going out of business. Neither of these correlate malpractice suits to malpractice insurance costs, and we've seen data that malpractice insurance costs go up regardless of tort reform.

(3-10 years of training after medical school, making $30K if you are lucky.

It's a shame that starting doctors' salaries in some fields are so low, particularly given their training expenses. Many medical specialties, however, have starting salaries beyond what most people can expect to be paid in their lifetimes.

After all the debate, what I see is that it doesn't matter whose fault it is, skyrocketing malpractice rates are a real problem. Whether it is the doctor or insurance company, there needs to be a solution.

Agreed. And here's a solution: a National Health Service. Publically funded health care, medical training, the works. The rest of the industrialized world manages to pull it off and maintain excellent standards of health care; why can't the wealthiest, most powerful nation on earth?

Think that's too extreme? Here's another solution: single-payer health insurance. Eliminate the insurance industry's proft motives, and publicize health insurance and malpractice insurance.

Those who say everything is fine with the current legal/justice system, I respectfully disagree with you.

Are you suggesting anyone on this thread has said "everything is fine"? If so, would you mind pointing out where that was said? Thanks.

 

[PeachMonkey]

Phoenix,

I did not realize that doctors were not allowed to organize in order to negotiate with HMOs. Can you point me to more information about that?

While many doctors likely are in no position to negotiate with the larger HMOs, I know for a fact that many doctors negotiate with health insurance organizations, because a surgeon who has worked on me does it every year with my university's health plan.

Keep in mind that in addition to the small fees paid by insurance, doctors are also receiving a co-payment directly from the pocket of the insured party.

In the end, tort reform won't solve this issue either. HMOs are a whole other problem, with a powerful lobby (much like malpractice insurance companies) whose interest is profit, rather than the health of their customers.

 

[Phoenix44]

Peach Monkey, doctors are only permitted collective bargaining if they are employees of let's say, a hospital; or if they are for instance, a large group practice. Doctors in independent practices are not permitted to group together for the purpose of negotiating fees. For example, a county medical society could not negotiate fees for their member doctors. The Federal Trade Commission considers this an anti-trust violation, and it will prosecute 100% of the time. So doctors have no sway whatsoever with HMOs fees.

If your surgeon can negotiate with a university's plan, that means either that it is probably a self-insured plan, rather than a large HMO, he's the only surgeon in a large geographic area, OR that there are very few surgeons associated with the plan, so they have to deal with him.

BTW,when an HMO cites a fee, the patient's co-pay is subtracted from the total, and the physician collects it from the patient. The copay is not in addition to the stated fee.

Here's the FTCs statement:
http://www.ftc.gov/reports/hlth3s.htm#8.

Here's an easier to read version: http://www.objectivemedicine.org/antitrust_crisis_in_healthcare.htm

But I'm off topic, sorry.

 

[PeachMonkey]

Phoenix,

I can understand why anti-trust legislation comes into play here... it would be extremely dangerous if doctors were allowed to collude in order to set fees, since they could form monpolistic blocs and truly hose patients. Clearly, however, HMOs are taking advantage of this situation, and further regulation is needed to tune this disparity... as one of your links suggests, health care has not been a free market for some time.

You're right that the patient's co-pay is subtracted from the total, but I think it's important to bring up in the context of the "$27" fee you mentioned. For instance, my health care plan pays my general practiioner $60 for a level one evaluation. I pay a $25 co-pay, so while the insurance company pays only $35, the doctor still sees $60.

Moreover, I see my doctor for nearly five minutes for this evaluation, and a nurse for another five minutes. $600/hr isn't bad, though I'm sure expenses are also quite high. Since my doctor works in a group office, that probably helps with said expenses.

 

[SMP]

what about insurance companies - you dont see too much competition there.

 

[Flatlander]

OK, I totally stole this from thesemindz, he posted it in the Gun Forum. I thought it applicable here, as it seems that Bushmaster settled in order to prevent the legal costs from getting out of hand, and their insurance company would pony up some of the damages.

Definitely something wrong in a system where some one (or company) who in no way bears responsibility must pay out of pocket for the idiocy of others.