Posts Tagged health care costs

The Downward Spiral

By C.H.E. Sadaphal, MD, FACEP

As I recently finished another year of working shifts in the Emergency Department, I reflected on the up-coming wide-ranging implementation of the majority of the programs and regulations mandated by the government’s Affordable Care Act (ACA). As a whole for Emergency Physicians, from a financial standpoint the year 2014 will bring us many reasons to cheer: millions who were previously without some form of health insurance will now have coverage and thus the ability to pay. This is a win as any emergency department is required by law to see and treat anyone regardless of their ability to pay; those without means will now have means.

But, if one digs deeper several flaws become apparent. The two most notable is the fact that the ACA maintains the outdated link of health insurance to employment (after all, what does being healthy or sick have to do with being employed? The two are independent of each other) and it shields the healthcare consumer from the real costs of services, leading to over-consumption.
To elaborate on the second point, let’s take a step back. The healthcare industry is the only business in this country where access to basic, routine services requires insurance coverage. If you need on oil change, you don’t call your automotive insurance carrier, but go to the mechanic of your choosing and then pay for the aforementioned services. There is no middleman, just you and the automotive shop. Your insurance only kicks in, let’s say, if you’re in an accident or if a major component of your vehicle breaks down and requires a costly fix. This is a valid, functional model. But, when this model is applied to all encounters, problems arise. Costs will inevitably have to go up, because the scope of services the insurance covers is vastly larger. This inescapably puts the cost of basic care out of reach for an expanding group of people. The fact is, the very existence of health insurance is what’s pushing rates into the stratosphere and causing costs to skyrocket.

How can this be so, you ask? Very simple. In a normal “insurance” circumstance, you, the payee, is given a fixed sum in the event of a catastrophe. So, if your 5-year-old car gets smashed in half by a falling tree, you get a check for a fixed sum. For this benefit, you would be required to pay a fixed annual fee. In the healthcare industry, instead of the insurance company paying a fixed rate for a service, guess who sets the price? You got it, the doctors and hospitals do. Hence, demand (the price of a service) is set by the doctors and hospitals, which is a perversion of normal economic principles. This allows healthcare personnel to increase prices without any limits, causing an exponential increase in healthcare costs.

This is so because the patients are shielded from the real costs, and the third parties (insurance companies) pick up the tab. Moreover, any system that is fee-for-service incentivizes doctors to do the procedures that yield the highest insurance reimbursement (and as often as possible). Therefore, something that should be aimed at making people better has transformed into a business transaction where physicians have become “providers” and the patient’s “consumers.” The ubiquitous use of said language is not accidental.
Let’s say you walk into Jiffy Lube and the clerk tells you an oil change is $10,000. Any sane person would walk out and find a better price at a reasonable shop. But, what if everyone had automotive “insurance” and no matter what you had done at Jiffy Lube, you would only pay a “co-pay” of $10. Now, the shop charges your insurance company $10,000 and perhaps “only” receives $3000, for a “cost-saving” of $7000. And guess what? The poor old schmuck who has no coverage better learn how to change oil for himself or fork over ten grand.

From this example it is clear to see that since you don’t have to pay the full cost of service, you have an incentive to go to this shop as much as possible and have as much done as possible.
Accordingly, I wholeheartedly support physicians in the medical establishment and all the work that they do. After all, it is the diligent and meticulous work of these fine individuals who assist in the care of the nation as a whole. A mobilized legion of doctors, each attempting to “do no harm” forms the backbone of a healthy society, and no one can deny that without physicians and their know-how we would all be living in the dark ages when it comes to health and well being. I specifically have to tip my hat to everyone who provides emergency medical care, for these exceptional individuals serve on the front lines and provide for the acutely ill and those patients who are most in need.

However, that being said I will be blunt: the financial process described above has the potential to corrupt us, the doctors. It’s the natural consequence of a flawed system. We are incentivized not to deal with the patient and their problems but to maximize every encounter from the standpoint of billing for our own economic gain. If an admirable doctor refuses to obey this perversity, he will certainly write his own fate. Most people don’t know this, but every time a patient sees a doctor, the interaction is boiled down to a series of billing codes, referred to as ICD (International Classification of Diseases). So, if John Doe visits Dr. Brown, the office visit results in a series of codes dependent on Mr. Doe’s diagnosis and the procedures performed.

The more codes and the more complex the codes, the higher the billing (The art of billing has now become so integral to the practice of medicine that medical schools offer courses whose sole purpose is to teach how to bill more efficiently and effectively. For instance—did you know physicians are paid more the more body parts are examined?).

In the emergency department for example, all encounters are broken down into levels 1 through 5, and each has a corresponding five-digit code. If you jam your pinky finger, that’s a level 1; if you’re having chest pain and need blood work, an ECG and a chest x-ray—that will be a level five.
People who are terribly ill and require even more attention have even more extravagant codes assigned to them called “critical care”. Now, let’s think about this realistically: if the doctor has a patient’s chart and can dress it up to a higher level of billing, what is he incentivized to do?
Ironically, the government has pushed, and even paid for, the use of Electronic Medical Records (EMRs), and created requirements for documentation (the doctor’s chart) that can only be met by using an EMR. This has forced some physicians to direct energy away from patient care and hire individuals and consultants whose sole purpose is to master the EMR in order to maximize billing.

The government, then, has subsequently turned around and penalized doctors and hospitals when they ask to be compensated for caring for patients! Essentially, the harder you work and the more productive you are, the greater chance of scrutiny and penalty.
There’s another side to this issue. There are millions of family practitioners, general practitioners, pediatricians and internists who perform an invaluable service as the primary gatekeepers in the delivery of medical care to their patients: wellness management. They spend countless hours counseling, obtaining histories, education and many other things of the sort that equip patients with the tools they need to actually get better. But guess what?

All of these wonderful services are not procedures, so these docs are reimbursed peanuts or not at all. Case in point, my wife is a pediatrician who spends countless hours counseling young girls on what to, and what not to do in order to place them on a path towards wellness.

If she spends 60 minutes for each patient going over eating habits, sleep habits, medication counseling, social support networks, contraception management, general education, safety in the home, nutrition, drugs, exercise routines, depression screening – guess what she gets? Next to nothing. Now, if the same young patient were to have an echocardiogram (ultrasound of the heart) or a broken bone fixed, then the dollars start coming in.

Alas, this entire bureaucratic system had mechanized the entire doctor-patient relationship by adding a layer of complexity that consumes time and takes away from the physician’s real purpose, which is to sleuth out a problem and initiate the appropriate treatment. With his energies focused elsewhere, the physician will spend less time actually caring for the patient.

At the end of the day, the ACA should be renamed the pay the healthcare industry act, because now millions of uninsured will have their bills paid by the government, and line the pockets of doctors, hospitals and pharmaceutical companies. Remember, the main goal of the ACA is to provide coverage, which has nothing to do with promoting health. I could also “create jobs” by paying people to dig a hole to nowhere in my backyard, but that does not increase wealth or produce anything of value.

And let us not hide the truth: can any rational person expect a bill that increases the size of the healthcare industry to make people healthier?

Absolutely not. If people aren’t sick, there’s no market for the medical field and no money to be made. Realistically, the medical field is very good at disease management but not wellness management. If you walk into my emergency room, I can do many things to make you better but have little to offer if you ask, “How do I stay well?”

The single greatest factor that determines whether we go to see a doctor is if we have health insurance. A little more than half (57%) of adults 18-64 who don’t have insurance will not go to see a doctor. Compare that with 10% of Medicare recipients and 6.5% of private insurance carriers. One can now see what will happen when millions more people have coverage and the number of physicians remains relatively the same: rationing of care, longer wait times, ER overcrowding, and a redistribution of wealth to the healthcare industry. If anybody thinks healthcare is pricey now, wait until it’s free.

The solution you ask? End the government’s subsidization of the healthcare system, allow patients to be directly responsible to pay the cost of routine care subsequently having the market drive costs down, allow the allocation of pre-tax dollars into Health Savings Accounts (HSAs) for a rainy day fund, and leave “insurance” for what it was meant for—extreme and unexpected circumstances in the untimely illness of yourself or a family member.

In the end, we all live in a so-called free society, but my freedom should never infringe upon anyone else. As such, no one has the right to healthcare, just as no one has the right to a Mercedes or a beach house in the Florida Keys. What we all have is the responsibility to ourselves and families to keep the end in mind and to lead healthy lifestyles; to act wisely by engaging in behavior that promotes longevity, and destroying the self-destructive and immature concept that someone else should take care of us all. That is how we can do no harm.

(This blog is an early release of blogs posted at



ACEP and the Choosing Wisely Campaign

ACEP President Dr. David SeabergA campaign called Choosing Wisely has gotten some attention of late because of its stated goal of reducing health care costs by eliminating tests and procedures that are not “necessary.” Since Choosing Wisely launched, nine medical specialty organizations have offered up their top five items for the chopping block.  These range from CT scans for fainting from the American College of Physicians to antibiotics for chronic sinusitis from the American Academy of Allergy, Asthma and Immunology.

ACEP was asked to join the campaign in 2011, and after extensive review and discussion at the Committee level, ACEP declined.  There are several reasons for our initial response:

  • Emergency physicians have no right of refusal with our patients and often pick up the slack for other members of our esteemed profession. A recent member poll showed that 97% of us report seeing patients on a daily basis who are sent to the emergency department by their primary care physician. Many of these patients have been sent in with expressed instructions from the family physician to have this or that test ordered either because their office practice is swamped, the office is closed, or they lack the facilities to perform these tests. 
  • ABIM, the organization sponsoring the campaign, refused to allow any discussion of liability reform as a component of the Choosing Wisely campaign. To quote from the letter ACEP Past President Dr. Sandy Schneider sent to Daniel Wolfson, ABIM’s Executive VP and COO: “This is a significant issue in emergency medicine and a critical factor as to why emergency physicians order the number of tests and procedures they do.  Unlike primary care physicians, emergency physicians are not chosen by their patients, who have a greater tendency to sue for any perceived untoward event. In addition, we often lack prior care information. It is simply not possible for emergency physicians to talk about reducing ‘unnecessary’ testing without including messages about the need for medical liability reform.”
  • Emergency physicians approach our patients with the goal of eliminating anything life threatening. We cannot afford to miss anything, even something that seems like a long-shot. The consequences may be life or death for our patients. A test that is unnecessary for 99 patients may save the life of patient number 100.
  • Emergency medical care constitutes just 2 percent of all health care spending in the United States, no doubt in part because so much of the care we deliver is uncompensated. We are masters of efficiency and improvisation but there is only so far a dollar can be stretched. Emergency departments have been closing at an alarming rate across the country because so much care isn’t paid for. This is not the place to cut costs any further.
  • Lastly, should ACEP participate in this campaign, it very well may assure that emergency physicians will not receive reimbursement for the five identified procedures or tests.

ACEP is dedicated to advancing emergency care and promoting evidence-based quality improvement measures for its patients. To that end, we are reevaluating our response to the Choosing Wisely campaign by developing a workgroup, comprised of members from the Reimbursement, Medical-Legal, EM Practice, Clinical Policies, Quality and Performance, and Public Relations Committees to examine the issue and prepare a proposal for ACEP Board consideration.

President, American College of Emergency Physicians