Price Rationing for Primary Care
Doctors are free to repackage and reprice their services afterall — at least for items insurance doesn’t cover:
A growing number of doctors across the country are boosting revenue by asking patients to pay new fees for services they say insurance doesn’t cover… The extra payments include no-show fees of $30-$50 for missed appointments, widely varying charges for filling out health forms for school, work or athletic teams, and annual administrative fees of $35-$120 or more to simply be a patient in some practices.
Full article on new doctor fees that insurance does not cover.
What’s more interesting here is that doctors are able and willing to repackage and reprice their services. The only apparent thing holding them back is an antiquated payment system.
If price rationing is superior to nonprice rationing (wastes fewer resources) then these developments should be viewed as a good thing.
I agree with Tom. Plus, what’s wrong with having doctors charge fees for their servies just like every other professional?
We’re going to see a lot more of this in the future. And I bet it’s going to be like the fees that show up on your bill when you buy a car. None of them make any sense. But, since most consumers are willing to pay, people go along with it.
The fees described in the article are not related to the marginal cost of providing the service in question, e.g. signing a letter to a school about a child’s fitness to participate in an activity. Rather, they are a way of implicitly increasing the out-of-pocket share of costs of insured services which are not directly addressed by these fees because they’d violate physicians’ contracts with insurers.
This type of bundling is very inefficient. Nevertheless, we’ll see more of it because it is simply not possible for a 3rd-party payer to value the services of a primary-care practice. There are examples where the shared culture of providers and patients, coupled with excellent leadership, can deliver managed care that bundles primary, specialist, and hospital care (e.g. Kaiser Permanente during certain periods of its history, perhaps even today), but this is rare.
History demonstrates that most Americans want choice, and therefore are more likely to prefer independent primary-care practices that operate on a (perhaps modified) fee-for-service model.
Because insurers can never accurately observe what goes on in a primary-care practice, they can never value it properly. Generally speaking, insurers need to get out of business of negotiating fees of primary-care doctors and let patients do this directly. The status quo makes as little sense as auto insurers negotiating gasoline prices with service stations.
ObamaCare will make this worse: We will not get a better “balance” of primary versus speciality care, but a shortage of both, as demonstrated in Canada.