Sunday, September 16, 2012

Cogs in the Money Machine: Money and Trust

Everyone has to make money of course, and there’s not one thing wrong with that.  But, encountering our medical and payment systems, patients now (accurately) perceive that money is the primary object for most of the institutions involved (insurance companies, pharmaceutical companies, hospitals) and for a few of the individuals one encounters (and probably for more than a few of the individuals one does not meet).

Although patients seldom articulate this, they sense what Dr. David Belk accurately states at his interesting website, that prices are deliberately confusing and obscure. It's a scary situation when one cannot know what costs one is incurring.  As Dr. Belk states, this byzantine non-system is designed to benefit someone -- because “[w]hen [it is so difficult to determine costs and prices], you have to ask how much trouble someone has taken to hide it.” (Patients, of course, do not generally understand that prices are as confusing and unknowable to most doctors as to most patients, a point Dr. Belk makes well.) As Dr. Belk notes: “This is a big problem - any cost that is hidden or confusing is easy to inflate.”

That the obscurity is deliberate is underlined by recent developments in Texas. Prompted by patients who had had unpleasant billing surprises, the insurance regulator had put out proposed rules for insurance companies that would require them to disclose on their provider directories whether in-network facilities had in-network anesthesiologists, ER doctors, pathologists and so forth. In-network facilities with ample in-network ancillary-service providers would be labelled “approved,” and those with few or no providers “limited.” As well, insurers would be forced to post a web notice if this situation changed markedly – when there was a 75% or greater decrease in in-network providers available at a facility. This would assist patients to minimize their chances of out-of-network billing.

But recently, Perry’s Texas Insurance Commissioner appointee firmly quashed these provisions before they took effect. Eleanor Kitzman disingenuously claimed that these requirements would “not provide substantial benefit to consumers and [might] lead to increased premiums,” saying it would confuse consumers. “I just don’t believe that consumers, the average consumer, is really going to be able to use that information in a meaningful way.”

A personal experience of deliberate obscurity makes this particularly interesting to me. Last fall, I had cataract surgery at Bailey Square, a day surgery center in Austin, Texas. Bailey Square got all my insurance details beforehand; then they informed me to the penny of the exact amount to bring in during a detailed phone conversation several days before surgery.  I brought the check with me the day of surgery, and was then surprised to be asked to sign a form stating that anesthesiology charges might be out-of-network and they were my responsibility regardless. That was of course too late for me to do any checking. In the event, the anesthesiologists were on my insurance, so I owed only $25 rather than their full $500 charge – but I am sure than not every patient is so fortunate. However, I thought it was sleazy that, when it concerned my money, they chose to spring the news on me too late for me to do anything, but when it concerned their money, they made sure they provided full details well in advance. I wrote the head of the facility complaining about this. I suggested they disclose this in the advance phone conversation when a patient is told how much money they will owe. Unsurprisingly, he never responded.

Another Austin example of charging obscurity is when patients who hoped to avoid ER charges by going to an “urgent care center” found that some urgent care centers are charging as hospital ERs. (Some of  the yelp  reviews indicate that some of the generally good doctors and nurses at these centers are embarrassed and apologetic about this.)

But this post is not a plea for financial transparency. I want rather to reflect on how it affects patient trust when people feel like cogs in a money machine (I could write another post but won’t about the effects on physician morale of constantly playing insurance games in this darkness, after all they too are cogs in other people’s money machines). When one needs to be constantly suspicious about the bizarre charge system, this also affects patient attitudes in other ways and creates a general suspicion, which sometimes is warranted and sometimes is not. Either way, it is corrosive to good relationships and good care.

To see the impact, read this very harsh post about colonscopy: A Tough Love Colonoscopy Dream. The author writes:

Q. Who can perform a colonoscopy?

A. Watch out. Studies have shown that the experience and quality of the scope user (we now use the term endoscopist more frequently) is essential. You want a GI specialist who has performed hundreds or thousands of these. Of course we used to say that you always wanted a physician for all your medical care, not one of those Nurse Practitioners or Nurse Anesthetists, until we were able to employ Physician Assistants in our practices to increase patient care, and coincidentally, our income. Money is not a factor in our decisions. But make no mistake about it. A Physicians Assistant is no doctor. . . .

Q. How come I don’t know any of this?

A. Because we do not want you to. It could ruin business, but we do not make decisions based upon financial gain. And of course it would limit the help we can give our beloved patients. And then there are the Porsche payments. . . .

He concludes:

It is too bad for you that you are getting into the [medical] system. But you have to get used to it, as you are not getting any younger. And no one can get by without medical care. The healthcare industry controls that at every level. For profit. And you cannot change it, so you had better learn to navigate it if you want to avoid the most horrible outcomes.


Steve Lucas said...

Excellent post. My attorney wife recently had a routine test done and the hospital charge was $250, the insurance company paid $87 and she had no out of pocket. Go figure, we have no idea how these numbers are calculated.

The real losers in this system are those with no insurance, as they are usually those with the least income and are hounded to pay full retail. I live in an economically depressed area with low education levels and the horror stories would make any reasonable person cringe, if not angry.

Steve Lucas

Anonymous said...

Great post, thank you. I did a study of charges and 'costs' about 8 years ago, For a long time charges were 3x cost, then over a few years they raised slowly to 4x cost. Then the hoospital cried poor and raised costs without raising charge, increasing what Medicare paid.

They justified this by buying failing hospitals. They paid a few bucks and put the full book value on their balance sheet, far more than the failing hospital was worth. In a year or two they wrote down the investment creating a loss on paper. This loss could be attributed to the 'hospital operations division' and was used to justify the reimbursement hike.

All of it seemed to planned to me (create a wider spread of charge to cost simply by changing the charge higher (no one pays 'charges' really). Then the justification came with the paper loss (not read cost in an out of pocket sort of way). Too calculated and cooincidental to be an accident.