Doctors Opting Out
Opting out of Medicare and Medicaid, that is:
More and more of my fellow doctors are turning away Medicare patients….. One of the top mammographers in New York City…… no longer accepts Medicare and charges patients more than $300 cash for each procedure……
The problem is even worse with Medicaid. A 2005 Community Tracking Physician survey showed that only 50% of physicians accept this insurance.
I think this is going to become a major problem — getting worse and worse thru time.
And it will get much worse if 100 million additional people join a young person’s Medicare plan, as the Obama administration seems to advocate.
The article also talked about doctors opting out of private plans, although it was unclear whether they were Medicare private plans or just regular private plans.
Clearly, such solutions as: “Increase Medicaid funding!”; “Add coverage to Medicare!”; “Cap insurance premium increases!”; “Share the costs!” – All such solutions implemented or proposed over the past 30 years have unintended negative consequences: costs keep rising, administration becomes more complex, providers increasingly opt-out, and millions continue to lack basic medical insurance coverage. The piecemeal approach is demonstrably ineffective and just plain wrong.
But NO – I am not suggesting a broad-based government-run “solution” that is unworkable and has been rejected in the past. What I am suggesting is a program that gives everyone something they can support.
Medicaid does not exist in an insurance vacuum. For one, it is an integral part of the severe problems facing Medicare. The high cost of private health insurance, in part, reflects the low reimbursement rates of Medicare and Medicaid. Each of these programs is in some way related to the other two.
We need a medical coverage program that addresses the full range of concerns expressed by virtually everyone. We need an approach that covers everyone while doing what each sector does best: competition in the private sector to drive down costs, maintain and/or improve quality and bring more efficiency to the system, and government to assure compliance, effectiveness, and fairness. This is what we currently face:
Health insurance coverage is a highly fractured and inefficient system. Covered groups vary in size from a few dozen to thousands, each with different coverages, different deductibles, different premium structures, different exclusions, and these hundreds of policies are split and fractionalized among dozens of competing companies and systems, etc.
Our health insurance “system” is further fragmented by state, by region within state, by group membership which crosses geographic boundaries, by size of group, as well as student coverage and individual coverage. There is a multiplicity of plans, eligibility requirements, pricing formulas, restrictions… you name it. Performance statistics (underwriting data) overlap incompletely so that it is difficult to cull out meaningful numbers. Group underwriting varies considerably by insurance company, location, size, etc. All of these introduce complexity, with its consequent inefficiencies and inability to identify problems, let alone pinpoint significant high-cost health care providers and services.
Medical providers spend thousands of wasted hours and millions of wasted dollars just filing the myriad forms, and then correcting them when this chaotic “system” produces so many filing errors and the need for explanations and re-explanations. Diagnoses often vary according to the coverage of the patient. Why? Because most physicians really are kind people and they don’t want their patients to bankrupt themselves as a result of uncovered medical care. On top of this is Medicare and Medicaid with similar complexities and inefficiencies. CHIP only chips away at a small piece of the problem yet adds complications to administration.
By simplifying the insurance part of our health care system we can save millions, cover more individuals, and produce more efficiency and, therefore, better results.
I offer the following medical coverage program, different from current AARP discussions, the solutions in the National Coalition on Health Care report, the Massachusetts program, and most programs offering to “adjust” Medicare, and Medicaid. It addresses all the major concerns expressed by virtually everyone, which no other program I have seen does (possibly with the exception of the PNHP plan):
Maintains private competition
Covers everyone
Keeps costs in check while maintaining and/or improving quality
Maintains effective oversight and reports performance statistics
While I describe a nationwide solution, it is easy to adapt this program to individual states until such time as the problem is taken up in Washington.
(1) EVERYONE IS COVERED
Several population-equal geographic health districts of the country should be defined, based on the official U.S. census, and redefined after every new census, as required. Everyone will be a group member… no exceptions.
This is key because today’s multiplicity of thousands of groups, each with their own policy details and pricing, leaves many people ineligible and without coverage, and makes analysis of health and cost statistics and policy coverage pricing impossibly complex and inherently unfair.
The creation of this limited number of large groups allows the law of large numbers to function. No longer will there be groups of 500 or 100 or even as few as 10, which we find today. Why is this important? It’s because the larger the group the more valid the statistics on mortality, morbidity, medical services used, and medical service costs.
Moreover, since everyone is covered and each group is so large, there is no possibility of adverse selection skewing the group’s statistics even though everyone will be free to choose the plan they feel has the greatest cost/benefit to them.
And most importantly, each group is so large that the insurer has great leverage in negotiating acceptable charges and reimbursements (government oversight and reporting described in Item 4 below complements this leverage).
(2) ALL INSURANCE IS PRIVATE
Everyone must be a member of a health district based on their official home residence, so that group underwriting and group rates will apply. In other words, there will be no individual coverage since ALL coverage will be group coverage.
All premiums will be privately paid, whether paid for by employers, organizations or by individuals, with but one exception.
Premiums for those certified as earning below the poverty line will be paid for by the government.
There must be no free ride – persons who can afford the premiums but do not register for and pay their premiums will have their Social Security Accounts or their Income Tax Bill pay for this coverage.
Several coverage packages, government defined, will be offered as consumer-chosen options:
High deductible – no well-care, no prescription drugs
Low deductible – no well-care, no prescription drugs
Well care Plus high Deductible, no prescription drugs
Well care Plus medium deductible, no prescription drugs
Catastrophic Only (separate or add-on coverage)
An HMO may be selected as one’s service provider, with premiums matching the winning bid in its health district for
“Well care plus medium deductible with no prescription drugs”
Prescription Drugs (add-on coverage)
Separate packages in the above categories will be defined for children and adults
Individuals are free to add their own private supplemental coverage to any of these packages.
(3) COMPETITION IS RETAINED
Each insurance company which chooses to bid in a given health district must bid on every one of the coverage packages.
Winning (lowest premium) bidders of each package will have a three year contract (5 or 10 years may be arguably better).
The winning bidder may subcontract out administrative functions to losing bidders but will retain ultimate responsibility for performance. Subcontractors may be removed by the contractor for cause.
Should there be no bidder in a given health district, the government will be the bidder of last resort, with its bids (the premiums) for each package defined as the average of the winning bids in all adjoining health districts.
This accomplishes three things: (1) No district will remain without coverage; (2) the government will need to perform its own statistical analyses, which will give it the capability of reviewing all bids for reasonableness; and (3) government last-resort bids will be in line with cost-efficient bids in other districts.
(4) BOTH GOVERNMENT AND PUBLIC OVERSIGHT IS MAINTAINED
Prospective bidders will make application to the government to be on a bid list
Government will approve members of a bid list and publicly disclose their reasons for rejecting any application
The final bid position (not the bid itself) of each bidder in each category will be made public.
Basic cost, quality and performance statistics will be made public toward the end of each contract period for each category in each district
SO, WHAT GETS ACCOMPLISHED?
With this proposal the flaws, inconsistencies, and complexities of the current health insurance “system” are eliminated. The goal of fair, efficient, simple universal health insurance coverage without intrusive government interference and control is achieved.
Because of the effective use of the law of large numbers and the periodic bidding process, government will have no need to mandate or “suggest” treatment plans and will not need to legislate unreasonable reimbursement levels.
EVERYONE IS COVERED,
ALL INSURANCE IS PRIVATE,
COMPETITION IS RETAINED
WHILE BOTH GOVERNMENT AND PUBLIC OVERSIGHT IS MAINTAINED AND PERFORMANCE STATISTICS ARE REPORTED.
Plan coverages can be changed to coincide with the expiration of the contract. Members can change their plan at the same time.
There is one other problem that this plan may help to alleviate. The current “system” is doing nothing to alleviate the problem of poor health care in areas of the country with monopoly or near-monopoly providers. There’s no evidence that traditional health insurance coverage has in any way been a directing force in dealing with the negative aspects of non-competitive markets. I can’t say this proposal will absolutely alleviate the problem but it may be of some value.
Because most medical care payments to providers will, under this proposal, be operating under a different and, hopefully, more geographically equitable system, perhaps that will have a positive effect on the distribution of health care providers. With some confidence I can project that under this proposal the situation is extremely unlikely to become worse than it would be under current conditions. Some other mechanism than breadth of insurance coverage and insurance reimbursement is more likely to be necessary to fully address this problem.
Certainly there are details to be worked out, such as how to maintain the presence and viability of multiple insurance carriers in a region so that they are able to be bidders in a later bid period. Perhaps concerned organizations and think tanks can offer thoughts about this problem – once the basic principle is accepted of having a single non-government system that covers everyone, maintains private insurance as the primary coverage, maintains competition among carriers (with its positive effect of reining in costs and maintaining and/or improving quality), and keeps government in the loop through its oversight role.
In summary: the current system is broken and can’t be fixed. Medicare, Medicaid and the current system of private health insurance no longer meet today’s needs. Any proposal for replacement of the current system must be truly comprehensive and address ALL of the public concerns while keeping administration relatively simple.
In closing, my plan offers certain advantages over every other plan I have reviewed. Everyone is covered. Private enterprise is kept in the loop where it functions best. Government stays in the loop where its resources are most efficiently utilized.
Check out surgerycenterok.com…..prices(including physician fees) for outpatient surgical procedures published online. Hope that we can opt out of all third party payment…also hope to begin a deflationary pricing war for these services and maybe others.
Dr. Smith,
Your prices far outstrip the actual reimbursements in many marks for the package deal you provide. Yes the bills are higher at other centers but the actual payments are quite a bit lower. So good luck with your endeavor!
AHW