A Letter to My Physician Colleagues: The State of Medicine 2014

Bob Nelson, MD

There is an old German proverb that states, “Whose bread I eat, his song I sing.” That saying was a colorful way to explain the loyalty or service that was due a benefactor from a debtor. It encompassed everyone from traveling musicians to the serfs performing and serving at the behest of a gracious, or often a demanding, lord.

As we gradually assumed the role of “providers” for insurance networks over the past 40 years, physicians have been obliged to sing someone else’s tune due to the precariously lopsided terms of our once ostensibly beneficial contractual agreement with managed care payers.  We have essentially become subcontractors for, or de facto employees of, the insurance company as evidenced by the reality that every interaction with a patient falls under the purview of a third-party who dictates the terms of the encounter.  Doctors are obligated to document our compliance regarding charting criteria and “quality” measures that have nothing to do with making our patient better.  To be considered as “worthy” members of their provider group, we must submit to expensive and time consuming re-certification exams every 7 – 10 years, despite having passed our boards following a rigorous training program in our chosen specialty.  It seems obvious to me that have lost nearly all professional autonomy in this arrangement.

Primary doctors, more than most, have become captives to the reimbursement schedules and provider contracts foisted upon us the managed care cartels, with 90% of our revenues being tied to the billing cycle that they control. Physicians are required to file a claim for every encounter, regardless of how minor the problem.   It has become more about shuffling papers, than about serving patients.  Charting has become a billing ritual, rather than documenting an accurate history or a tool to help solve a clinical conundrum.  It is about making sure enough “work” was done to justify the code, as opposed to doing worthwhile work for the patient’s benefit – even when that means no testing or prescribing was needed.  So often, the patient visit turns into an inconvenient prerequisite in order to get paid – the focus often being on the claims process, not the client.  The perverse incentives for both patient and doctor are obvious within the third-party shell game that we call the billing cycle. We sing the song that we are coerced to perform in order to get paid.

The difficulty of representing our patient’s best interests in this perverse system are obvious.  435 billion was added to the cost of treating patients due to how the provider of care gets paid (in our current system). And this does not include what is not collected, which is another 15% from insurers and 49% (going uncollected) from patients directly, putting the actual cost of the way we bill at nearly 40% of all costs to treat patients.

Taking all this into account, it is obvious that we no longer control our own destiny, nor do patients, as long as we continue down this road.  The third-party payment system, that for too long has focused on “coverage” instead of real costs, has ironically made access to healthcare more difficult to navigate and more expensive.  When I ask new patients why they stopped their blood pressure medicine, the answer is nearly always the same; “I could afford the generic medication, but I couldn’t afford the office visits and lab tests my doctor wanted me to have.” These treatment and follow up lapses are a direct result of the inflated charges, balance billing and a lack of price transparency that the third-party payment system has produced.  Regarding advance pricing and transparent pricing, here is an apropos quote from Dr. Keith Smith from his closing remarks at the first annual Free Market Medical Association meeting: “I have come to the conclusion that it is the ethical and moral obligation of the seller of health care services to provide the prospective buyer a price in advance of the provision of the service. Any other way of conducting medical business affairs has the feel and characteristics of a bait and switch. While many maintain that the provision of advance pricing is impossible, those of you gathered here now know without a doubt that this claim of impossibility is a lie, an excuse to fleece the buyer and an excuse that is no longer credible.”  

The practice of medicine is the only profession in existence today that is subjected to this degree of professional and economic control.  All of this has put a huge strain on doctor’s professional satisfaction and resulted in a massive migration out of private practice over the past several years.  “In 2011, The New England Journal of Medicine reported that fully 50 percent of the nation’s doctors had become employees—either of hospitals, corporations, insurance companies, or the government. Just six years earlier, in 2005, more than two-thirds of doctors were in private practice. As economic pressures on the sustainability of private clinical practice continue to mount, we can expect this trend to continue.”

The good news is, we do have choices.  We can take back our practices and delight our patients.  There is a better way and it is called Direct Primary Care or Direct-Fee medicine.  I prefer the term “third-party free medicine”.  Whatever you call it, it allows doctors to work for the only payer that we should have a contract with: Our patients!  You can liberate your practice and your patients from the bureaucratic trappings of third-party payers and devote more time, resources and attention to clinical problems instead of insurance claims!

download (13)Direct Primary Care, or DPC, is really nothing new.  Some have called it the “oldest new idea in healthcare”. Doctors and patients working directly together without an intruding third-party was the norm for a long time in this country; it was also an era where healthcare costs accounted for less than 6% of our nation’s GDP.   In 1960, using inflation-adjusted 2010 dollars, people spent on average about $1,100 per year per person on healthcare vs. over 8,200 per person per year now.  This “old-fashioned” system that pre-dated managed care served us well for many generations and we didn’t have the rampant runaway price inflation that we have now.

Then came Medicare, with HMO’ and PPO’s following shortly thereafter. These largely prepaid health plans (not really insurance) brought us impersonal networks, mountains of regulation, red tape and soaring costs that now consumes 17% of GDP!  Just look at the divergent increase of medical costs compared to the consumer price index following the advent of Medicare/Medicaid in 1965 and the HMO act of 1973.

DPC-Efficient-Direct-Primary-Care-Medical-HomesTransitioning to direct care practices allows us to restore and reclaim the way patients access routine physician services in the outpatient arena; one which allows the doctor and patient to engage directly in a meaningful exchange of value based on trust and respect without third party interference. The result will are lower outpatient costs, a higher level of service and better access for those previously reluctant to seek care due to lack of insurance coverage.  Kind of like going “back to the future”.

From one primary care doctor to another… I say let’s create our own healthcare reform!  Start singing your own song, instead of someone else’s.  Work for your patients again and re-discover the joy of being a doctor. One Patient – One Doctor – No interference.

Wishing you fulfilling practices and satisfying careers in the New Year and beyond,


Bob Nelson, MD

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