Disgruntled Docs Go Out of Network

Hundreds of pissed off MDs gathered at a seminar in New York recently to find a way to beat the healthcare system, specifically the managed care system that they say underpays, overmanages and cheats both doctors and patients. New York has the highest percentage of doctors per patient in the U.S., 328 per 100,000 versus the national average of 281 per 100,000, and the highest concentration of world class hospitals. It’s a good place to be a patient, but apparently a lousy place to run a medical practice.

Doctors, lawyers and consultants shared their views on patient care..

"Out of Network Practice: Opportunities and Benefits," sponsored by the Business Development Institute and Castle Connolly Medical, Ltd., showcased doctors who operate outside of the managed care system. Their patients pay on the spot and later file with their medical insurance carriers for reimbursement — usually partial reimbursement. Patients get the doctor they want and therapies that are not subject to the care restrictions cooked up the the managed care beancounters; doctors charge what they need to make a living, do without expensive medical billing staff, give more time per visit to a smaller patient roster, and — to hear them tell it — get a better quality of life as the healers they always wanted to be.

The panelists represented solo practioners, small medical groups and hospital-affiliated faculty. The moderator, healthcare consultant David Schimel, began the seminar with an overview of managed care in New York over the last 10 to 15 years. Schimel noted that the value of a medical practice — the equity that doctors build in their  businesses – has been transformed: Instead of a doctor having loyal patients/customers, the insurance companies that manage the care now own the patients, and retiring doctors have little value in their customer lists. A panelist noted that practioners experience a "January Syndrome" in which employers shopping for better deals change their managed care providers at the beginning of the year so that long-time patients are forced to move to the new physicians in  cheaper plans. Big faculty practices and larger physicians groups have more leverage in negotiating fees; independent doctors are prevented by anti-trust law from collaborating on fees with managed care payers.

Under pressure from Wall Street, insurance companies are merging and consolidating: 15 to 25 managed care companies used to compete in the market, now 5 or 6 cover the vast majority of enrolled patients. As their power increases, it was speculated that they won’t just be chiseling down payments but soon would be mandating expensive innovations like electronic medical records, telemedicine options, evidence-based reimbursement and Pay for Performance schemes that further impinge on a physician’s freedom of action and a practice’s profitability. On the other hand, managed care is important to support rural caregivers, help new doctors with predictablle volumes, referrals  and growth, and provide disease management for older patients or more complicated cases.

The family doctor is going the way of the family farm; uncompetitive in a corporatized, MBA-managed, investor-driven, deregulated economy.


What Others Are Saying

  1. Jack Powers Dec 6, 2006 at 3:11 pm

    No, no, no: I’m the last person to knock evidence-based medicine, and evidence-based reimbursement is a good thing. The point of the post is that doctors don’t like to be told what to do.
    The family farm is generally not the most informed, most efficient, most accountable, most competitive or most open-minded institution. Maybe the solo family practioner is in the same spot, these days with pressure from third-party payers to reduce costs and pressure from first-party payers — patients — to deliver better results. Ultimately the second group will have the bigger impact, I think.

  2. Joan Dec 6, 2006 at 1:46 pm

    While I agree with many of your comments and observations. I want to know what will drive the independent physician to stay current with evidence-based findings? Some of these constraints were added because of this gap in research and practice. Case in point. My dear friend was only recently (2 weeks ago) tested for H pylori, even though he had complained for 10 years and been prescribed for 10 years, medicine for an ulcer. His test was positive. This is not new cutting edge information. While physicians are desiring to practice and heal as they have wanted to, patients wanted to be given the most current relevant health care. I work with physicians every day who tell me their diabetic patients are sicker than everyone else’s and they are treating them properly, yet we have numerous patients who have not had LDL-C, HgbA1c or microalbumins test on patients in years. The system is broken, no doubt, but all the issues needed to be addressed, must be addressed or the cycle will start over.