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Monday Dec 09, 2019

In Business -- Including Health Care -- Someone Has To Pay

I love Sunday mornings. As a rule, I don't plan anything on Sundays. My calendar stays empty. If I need to run errands, have a meeting, etc. -- it's on Saturdays. Sundays are my sacred time to sit, think and drink coffee.

[man holding final notice paper]

(And yes, as you've surmised, I don't have kids. Intentionally. I am selfish -- at least for now.)

Which is why I was a little frustrated on a recent weekend. As I was ramping up to cook a Pinterest-worthy breakfast and take in the snippets of news from the Sunday morning shows, the first story I heard pulled me out of my kitchen and into the reality of the outside world. The soft tones of public radio floated above the crackle of onions sautéing in my pan: A group of physicians from the University of Virginia Health System were angry.(www.npr.org)

They were fighting against their hospital's practice of aggressively pursuing payment for unpaid medical bills.

As first reported by Kaiser Health News, the University of Virginia Health System "had filed 36,000 lawsuits against patients, seeking a total of more than $106 million in unpaid bills"(khn.org) during the last six years. The hospital had gone after patients' wages, their savings and their homes, and forced many into bankruptcy. And -- in a perverse twist -- some of these patients were also UVA employees.

I listened as Michael Williams, M.D., his voice sounding a bit nervous and unsteady, explained the basic ethical tug: As a physician, he noted, he took an oath to do no harm -- and this includes financial harm.

I set down my spatula, my gaze focused beyond the wall in front of me, and listened intently.

I know this feeling. I live this feeling.

I am a direct primary care physician. I am well trained and served as chief resident at one of the most prestigious family medicine programs in the nation. And after completing that training, I left the traditional model of health care because I felt the rub Dr. Williams was describing. While working in the hospital system, I had become keenly aware that while I held the power to sustain life, I simultaneously had equal power to destroy a patient's future financial situation with the simple click of a button. In ordering a treatment or a seemingly simple test, I had the power to push someone over a financial cliff.

What grabbed my attention on that morning was the fact that the story plainly laid out a massive problem: Most physicians aren't aware of the cost of their recommendations. Or the basic business operations of the institutions in which they work.

"None of the faculty that I know were aware of the depth and breadth of the situation and/or how much harm had been done," noted Dr. Williams.

The interviewer quickly jumped in and raised an obvious point: Shouldn't they have been aware?

Theoretically, yes.

But physicians have no ability to determine -- much less control -- pricing in the systems in which they are employed. Furthermore, there are layers upon layers of complexity that intentionally preclude the possibility of price transparency -- a phenomenon I've previously written about in this blog.  

Dr. Williams attempted to give his own explanation, suggesting, "It is one of the more complex systems that you'll come across. The physicians at UVA, like many other health systems, actually don't work for the medical center. It's a separate business entity. So we are, as physicians, not privy to the billing and collection practices of the hospital."

Let's unpack this exchange for a second because I think it lays out the foundational problem of the U.S. health care system. Plainly stated, doctors are, largely, no longer in charge of running hospitals. We abdicated our duty to watch over the business practices of hospitals after insurance and policy mandates required someone at the helm who understood the business of health care.(www.athenahealth.com) And once a businessperson took over, the therapeutic relationship and core mission of the hospital became secondary to the business of health care.

(Which, by the way, makes sense: It's their job to run a business, and a quick look at health care spending and revenue trends shows that they've done a good job in this department -- even as we continue to rank poorly in health outcomes when compared to peer nations.)(www.oecd-ilibrary.org)

This progression naturally led to the following situation: Those UVA doctors are not only not working for the medical center -- listen to the language Dr. Williams used -- they are also not working directly for their patients.

In the University of Virginia situation, physicians are employed by a physician employer group that is contracted by the hospital to provide care-related services. The hospital, in turn, is paid by private and governmental insurance companies. The insurers largely work for either the taxpayer (Medicare/Medicaid) or employers who coordinate and select the insurance plans for employees (with help from health insurance brokers). The insurers are largely paid by employers but provide their product to the individuals -- the patients -- who use their product.

And if you don't have insurance (and sometimes even if you do), the hospital will bill you for whatever is not paid by an insurance company, which is where collections and predatory practices come in. The hospital provided a service and you signed paperwork when you arrived that contractually affirmed your commitment to pay for any and all services provided.

If you're confused, it's because the business of health care is confusing.

This is the crux of the problem: Health care is a business. And it's one of the largest sectors of the U.S. economy, with 17.7% of our GDP being spent on health care services.(www.cms.gov)

And it's a business that has to pay its bills. Dr. Williams undoubtedly makes a paycheck for providing services to his patients. So do I. That paycheck has to come from somewhere. Someone has to pay.

In fact, someone has to pay for everyone involved in the health care ecosystem -- everyone from the frontline clinicians to pharmacists to the transporters and custodial staff; from coders and billers and those managing the data and technology to those in administration(www.nytimes.com) and the C-suite.(www.beckershospitalreview.com) They are all paid by this huge machine of health care.

Although private and governmental insurance programs provide the vast majority of the revenue for any given hospital system, we're moving into a world of increasing deductibles and rising premiums. Hospitals will start to see lower collection rates as out-of-pocket spending increases(www.healthsystemtracker.org) with tandem increases in deductibles. And we're all going to feel the pinch -- as patients, as citizens and as employees. We all pay for health care one way or another. We've got to rethink the way the business of health care operates -- and policies touted on the campaign trail and made by executive order give us plenty to think about.

As the news story ended on the radio, I picked up my spatula -- jabbing the bottom of the pan where the onions had started to burn -- and sighed. We've got a long way to go. But hearing that physicians are taking note and starting to speak up is a huge step in the right direction.

Allison Edwards, M.D., founded and cares for patients at Kansas City Direct Primary Care,(kansascitydirectprimarycare.com) provides locums coverage at rural hospitals in Missouri, Kansas and Colorado, and is volunteer faculty at both the University of Colorado and the University of Kansas. You can follow her on Twitter @Dr_A_Edwards.(twitter.com)

Read other Fresh Perspectives posts by this blogger.

Posted at 01:51PM Dec 09, 2019 by Allison Edwards, M.D.

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