Saturday, January 5, 2019

Fee for Service: A Viable Health Care Alternative - Keith R. Jackson

by Keith R. Jackson

"Fee for service" may be one of the best ways to slow down our accelerating health care costs.

Fee for service, especially when it involves your health care, has acquired a bad name. "Why should somebody make money off of you being sick?" is the refrain from leftists when espousing their single-payer, government-controlled takeover of the United States health care economy. They complain that we should be spending money on wellness, not giving money to those who act like parasites, feeding off the misfortune of others. But "fee for service" may instead be one of the best ways to slow down our accelerating health care costs.

"If the financial incentives are removed from the equation, maybe those greedy doctors will care more about the patients and less about their pay." At least that is what is constantly drilled into or heads with the left's media onslaught. TV shows like "New Amsterdam" advertise plot lines in which specialists who bill are kicked off of the medical staff because of their obtuse priorities, apparently caring more about money than people.

The reality of how the economics of medicine have gotten off the rails is a complicated mess, not the least of which is the absence of transparency in cost. Many of the players in the game of getting paid to treat the sick have a vested interest in keeping the actual costs a big mystery. The real power players in medicine aren't the doctors; they are the government, the insurance companies, and the hospital corporations, all of which act incestuously and wield power that dwarfs the actual people who provide your care.

Certificate of need laws that were ostensibly created to protect hospitals from bankruptcy are in fact a huge factor in facilitating escalating costs. It is against the law to attempt to open a fee for service facility to compete with the existing and entrenched local hospitals. As an example, if a group of doctors want to open a center that dramatically undercut the prices charged by the hospital for outpatient surgery, they cannot. Without competition, the rates that the hospitals charge are not challenged.

Laws have also been created that directly allow hospitals to charge and collect much higher rates than standalone doctors. These advantages are justified as an attempt to help the hospitals financially because they take care of the indigent. Unfortunately, they have dramatically affected the finances of medicine and the viability of private practice and have driven a majority of physicians to join hospital corporations.

As an example of how this has affected costs, a gastroenterologist currently gets around $200 for a colonoscopy if he is billing out of his private practice. If the hospital employs the physician, he gets around $2,000 billing at the higher allowable hospital rates. As doctors' pay has gone down and their overhead has gone up, the hospitals come in and offer stabilization of income for the physician in exchange for getting to bill for the doctor's service. The doctor doesn't realize the extra $1,800 for the procedure; the hospital corporation does. Hence the dramatic increase in huge medical and hospital corporation buildings in many areas of the country.

This cabal of the government that desires more power and control over health care and the hospital corporations that are rapidly expanding is having untoward affects on doctors. Over half of doctors are now hospital employees rather than owning their own businesses, up from 25% in 2012. Not having control over your own business in addition to all of the associated electronic medical record burdens and the bureaucratic time sink of tasks associated with belonging to a corporation is wearing down doctors. These are some of the reasons why almost 90% of physicians are not recommending medicine as a career.

As for the need to focus on paying for wellness rather than rewarding doctors for preying on the misfortune of the sick, this is a noble idea that is flawed at its core. The focus of health care education, especially medical specialist training, is to rescue the patient from ill health. 
Recommending healthy living is always a goal, especially among primary care providers. But the real advances in medicine and the ability to demonstrate talent in treatment are when the patient is very ill. Reminding the patient that he wouldn't be so sick if he just took care of himself is a non-starter.

It is not out of the range of comprehension to consider giving fee for service private practice another try when considering keeping down costs in health care. After all, the number-one health issue in humans is their teeth, and dentists seem to be able to exist outside the government, health insurance, and dental corporations. If doctors could open their own hospitals, surgery centers, and radiology facilities to compete in terms of price, free from certificates of need, it is not hard to see that costs could and should go down.

Keith R. Jackson


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