Health Insurance Issues With Dave has interviewed doctors, hospital executives and other members of the health care industry. Today is the first time I’ve handed the keys to a guest columnist.
I am proud to introduce my high school friend Gregg M. Gaylord MD. Dr. Gaylord is a Fellow in the Society of Interventional Radiology and is in the independent practice of medicine in Milwaukee, WI. He graduated U. of Cincinnati College of Medicine in 1981, and is Board Certified in Diagnostic/Interventional Radiology.
“I’m mad as hell…”
This famous line from the movie “Network” pretty much sums up how I feel about the now ubiquitous health care “network”. Nearly every health insurance plan comes with some form of network that either pays only for services provided by physicians, hospitals, and other providers in-network (IN), or has a higher copay and deductible if you choose to go out-of-network (OON).
Networks of providers are formed by payers such as Medicare Advantage and health insurance plans who solicit special pricing from major medical centers and professional medical groups as well as medical labs, surgery centers, hospitals and other entities. In exchange for accepting what are usually lower fees, the IN providers gain exclusivity under the insurance plan. If you aren’t accepted into the network or won’t accept their contract, you can’t treat patients and expect to get paid by the insurance plan. Independent individual providers are often excluded from networks, particularly on the individual “Obamacare” exchange plans. Some plans will pay for OON benefits, but at a much higher cost to the patient. Deductibles are often doubled and depending on the type of plan, coverage can also be reduced by a significant percentage. In many cases, a plan pays ZERO for out-of-network care except for emergencies. And many of these plans have no network providers – therefore no coverage – outside of the state where you purchase the plan (again, unless there is an emergency, though once the emergency subsides you once have to use an IN provider).
Not every plan has a narrow network. Some plans still offer a broad choice, but these are often group policies provided at your job or through Medicare and Medicaid programs that offer a variety of options though at vastly different premium pricing. If you are fortunate enough to have a broad choice of providers, you can usually keep your doctor. But this is not always the case, and many employers are also limiting their plans to those with a narrow network in order to stave off – at least temporarily – large premium increases.
So what’s the beef? Purchasing a plan in the individual market usually comes with a narrow network plan with a narrow list of IN providers that has no OON benefits. If your doctor is not in the network, too bad. Pay for your own care out of pocket. Don’t like the hospitals in your plans network? Again, too bad. Pay for it yourself. The sales pitch is that your plan will reduce costs and therefore reduce premiums, and that by narrowing the network, health care providers will work together to provide higher quality of care.
But is it working? No one is sure at this point. Some plans are showing a relative premium reduction of 6-7% compared to plans with broader networks. But premium prices are still headed up. Predictably, by narrowing networks there is an incentive for hospitals and health providers to merge and consolidate services – a trend that started during the early Clinton years but is now accelerating. This has led to upward price pressure in many markets. And perhaps even worse, these consolidated models have yet to prove long-term quality improvement on a broad scale. Unfortunately, we know that failure to prove better quality has not prevented this model from moving forward. One example of failure to prove benefits prior to implementation of policy is the requirement for nearly all physicians and hospitals to utilize Electronic Health Records. The benefits of EHR’s have yet to fully materialize, but the unintended consequences have included physician burnout, less time for nurses and doctors to interact with patients, and more and more reporting requirements that seem to add nothing to quality health care at this point.
Will narrow networks also lead to unintended consequences? In 2017 for the first time in the United States, independent physician-owned practices are no longer the majority. Employed physicians and independent physicians each constitute about 47% of physician practices. In many cases, employed physicians are seeing drastic income reductions – something that may or may not prove beneficial to the system as a whole. But a disturbing trend is the loss of autonomy in decision making which is being replaced by decision-making algorithms, management economic decisions, and incentives to increase referrals and therefore income “within the network”. Worse yet, in some cases physicians are being punished for not generating sufficient income to the system. Perhaps this will end with newer models of health care that shift responsibility and risk to the providers and the incentives will be to provide less care at lower cost. Will higher quality result? No one knows.
Bottom line? As networks narrow there is an incentive for providers to merge, and there will be fewer and fewer networks and hence physicians and hospitals to choose from. The doctor-patient relationship is being fractured ever more by third party payers and managers. Patient choice might become a thing of the past, and in some case already has.
What will the response be by the very human providers? There seems to be a reversal brewing from the employed physicians who are seeking to go back to the independent physician or independent physician group model as they feel less and less valued in a system that places remote management in charge of decision making. Some call this the “corporatization” of medicine – something that is already highly developed in the United States.
Until then, many providers are “Mad as hell”. And at some point – I wonder – will they “Not take it anymore”?
Gregg M. Gaylord MD
Special thanks again to Dr. Gregg M. Gaylord for providing us with his insight to the changing landscape of the health care industry.
Picture provided by Dr. Gaylord