Friday, May 3, 2013

Healthcare and Billing Practices

I just got my tonsils out two days ago and will be graduating dental school in a couple weeks, so I've been thinking a bit about healthcare lately. I just got a bill today from an ENT. I had gone to the ENT to have her look at my tonsils. In the process of the exam, she checked my ears (not my chief complaint). She said something along the lines of "Hold on, I'm going to just get a bit of earwax out," swung some sort of scope over, and within a minute the earwax was removed and the exam continued.

At the time I thought to myself, "That's a nice gesture. She saw something that needed taken care of that I wasn't really aware of, and she did it." Then the skeptic in me thought, "I wonder if I am going to be billed for that." Sure enough today I got a bill showing that $179 was billed to the insurance, while only $55.03 was allowed. Since I hadn't met my deductible, my portion was $55.03.

Alexia and I were just talking the other day about how odd it is that providers bill a large amount and then it always seems to be adjusted to a "contractual discount." So is the insurance shortchanging the provider by reimbursing less or only allowing a lower amount to be billed? Or is there fee inflation going on causing uninsured people to subsidize the contractual "discounts" insurance companies have?

Furthermore, should you as a provider inform patients of every fee they are going to get charged with? I struggle with this as a dental student. Do you inform the patient about the cost for radiographs and give them an option as to whether they want to get them or hold off for another six months, or do you make your opinion and perform the procedure? Will you be stuck with indecisive patients, who may be unable to understand and weigh the cost/benefit of a preventative radiograph vs. a possible cavity? Should a patient be financially counseled before all billable procedures? And what about billing not for service, but for complexity/time spent plus materials like a mechanic? My procedure to me did not seem like a $55 ear wax removal, certainly not a $179, but then again, I can't judge ENTs, the cost of equipment, cost of schooling, and complexity of procedures.

I guess overall the question is, what level of autonomy and trust should patients be given in their health care? As a patient, I feel capable with my medical knowledge, and the resources available to me, to be fairly autonomous in my cost/benefit analyses and to largely decide what I should and shouldn't have done if given the appropriate diagnoses and professional opinion. Many others may feel differently and may prefer to have the provider take the wheel. However, overall I am in favor of more transparency on pricing, procedures to be performed, potential risks, and especially complications that happened during the procedure, so that the power is in the patient's hands. If the patient decides that they would like to be less involved in the process, at least they were informed.

The difficulty with this is the implementation. I've heard of providers posting prices online, which sounds like a good idea. I feel like there needs to be some informed consent from a financial aspect where the patient either agrees that he or she will either not be aware of every billable procedure before it is performed, or where they are provided with prices and indicate that they would like to be informed of what procedures will be happening and that the onus is on them to get involved if they have a concern. Ultimately, providers shouldn't be expected to unreasonably compromise care because a patient wants to apply their Slickdeals mindset to their healthcare, but I think patients are currently losing a battle against autonomy, confusing medical codes, and convoluted insurance practices. What do you think?


Nate and Julie said...

This reminds me of a good friend of mine who was of the opinion that when you go to the ER there should be a menu board similar to what you would find at a restaurant outlining the price of every procedure. Then you could pick and choose just the services you want. I think this is ridiculous for so many reasons and in a way cheapens the value of good health care. However, I do agree that there should be a little more transparency in healthcare. For instance, it would have been nice if the ENT would have said something along the lines of "I can remove that wax for you, for a small fee of which your insurance will most likely cover." Unfortunately, doctors get sued way too much in this country and in order to cover their backsides they tend to provide more service than is sometimes necessary. That's my 2 cents. I think you'll be a great dentist. Want to move to Idaho so you can take care of our family's teeth at a transparent cost?

Gabe said...

Funny story about the ER board. However, as crazy as that sounds (and would be), when you think about how it actually runs, it is also equally crazy. With the way it often runs now, it is similar to you hiring a tailor to make you a suit, yet you have no reviews on the tailor (most doctors have no reviews, so it is a grab bag), the suit is un-returnable (medical procedures are usually non-reversible), and you have absolutely no idea what he is going to charge (fees aren't disclosed). No one would do it. Unfortunately, if that is pretty much the only way to buy a suit, you end up playing along.

So, there has to be some middle ground. It is different because this is someone's health we are talking about, and it is an area in which the patient often doesn't have expertise. The problem in my situation isn't so much that I don't think an ENT should get paid $55 for one minute of work. But for me what made it hard to palate was the stark transition of understanding from first thinking she was doing a thorough job and going the extra mile, to then getting an unexpected bill and wondering if I had fallen victim to what I often hear people in dentistry talk about, little procedures that can be large income builders.

It is difficult because everyone is different and has different values and expectations. But, it is a crazy system right now. And I guess it makes sense that it bothers me, because I am the type of person who wants to know if refills are free (the best parallel to the dining industry this has). The cost of a refill has a large impact on how I drink my drink, yet I often feel cheap asking if they are. But it could be solved with a simple line on the menu indicating what they cost.

Thanks for your comment. I don't think Idaho is in the cards for us, but I appreciate the blind vote of confidence from you. You don't even know if I'm a good dentist.

Rachelle said...

Since I have some experience here I thought I'd give my two cents, especially since my husband and I will be in the same situation as you (in 5 years-after the military.) So about 2 years ago I had the opportunity to work as a office manager for a dental office for a small 1 Dr practice. I thought it would provide invaluable experience for when Cody and I have a practice of our own. Because the office was so small I did all the billing, insurance, claims, scheduling, reception, etc. When patients would come to check out with proposed treatment plans. I would always ask if they would like to know fees, an estimate on what their insurance would cover, etc. Sometimes they would say no, but often, probably 90% of the time, they appreciated that. There were several patients who would opt to not do treatment if the price was to expensive. Of course a filling is only going to turn into something worse if not fixed in a timely manner. But at a certain point the patient has the information and will have to make an informed decision about their care. It was a very frustrating thing to see patients decline treatment but the reality is if you do the work, you wont get paid. I could go on on.

I did find it extremely irritating that every insurance company has its own contractual billing amounts. It gets very confusing when you are "in network" with 10 different companies and everyone is paying different amounts. And yes, those patients that do not have insurance are paying insane amounts. Probably nearly 3x times more than patients with insurance. The allowed amounts for in network services often are less than half of your standard fee. So it can certainly feel like you are getting short changed. But if you decide to be in network then you are agreeing to that fee, so I guess you are agreeing to be short changed. A lot of dentists look at being in network, and the discounted reimbursement, as a advertising expense. So you have to view the trade off.

Anyway I have lots of opinions and advice on this topic. Feel free to ask me questions if you want more info.

And congrats on your graduation!! Cody's graduation is May 11th one week away!! He found out he passed the WREB earlier this week! We are so thrilled, we are moving back to Utah for the summer and then our first station will be at Nellis Air Force Base in Las Vegas for a 1 year AEGD.

Taylor said...

Ah, Gabe. This is what I will spend my career fixing. You asked a ton of questions, and I can try to answer all of them if you want, but that would be easier over the phone.

Here's a couple key points to get you started. First, individual doctor practices and larger practices/hospital systems make prices differently. I explain how individual doctor practices make their prices in this blog post: This fits exactly with what Rachelle said above.

As for larger practices/hospital systems, they actually have some bargaining power with insurers, so they don't just accept prices like the small doctor practices. Bargaining power is important! It pretty much determines the prices large practices and insurers agree to.

And they can use one of two anchors from which to start their bargaining process: their "chargemaster" or Medicare rates.

A chargemaster is the hospital's internal list of prices for every single thing they provide, from triple bypass surgery down to alcohol swabs and individual pills. How are these prices determined? I'm not totally sure. But they're not based on costs, nor are they made with the intent to actually charge many people the full amount. They're more just to use as an anchor from which price negotiations with insurers can start. And if you set a really high anchor, you're more likely to end up with a higher final price! The crazy thing is that if someone comes in without insurance, these chargemaster prices just get sent as is to the unlucky patient.

If they use Medicare rates as the anchor, they are bargaining over what percent of medicare prices will be paid, and they could end up getting more or less than Medicare prices depending on their relative bargaining power.

The terms you're looking for when talking about how a doctor should lay out the options and help the patient decide are "informed consent" and "shared decision making." You can google those and learn all about them pretty quickly.

And if you're not already tired of reading the words of Taylor, this blog post about the whole price transparency thing in healthcare might be interesting:

And if all these problems in healthcare are getting you down, I have two words for you: Monson shaft.

You're awesome man! I miss seeing you.

Gabe said...

Rachelle, congratulations! That's exciting. Good to hear your experiences. I think giving patients the option is the key, as every patient is different. Even when you aren't considering finances, some patients want to be informed about steps along the way and diagnoses, others just want to show up and be told when it's done. I think financially it can be the same way.

Taylor, thanks for your comments. I was curious to hear your thoughts, and I think it'd be interesting to discuss these issues further. I remember reading a few posts of yours letting me know you were interested in these types of issues. I'd certainly be open to becoming involved politically or publicly in some way to address some of these issues, because things are quite broken.

I am familiar with informed consent, since it certainly is part of dentistry as well. However, unfortunately we were never really educated on it. And I guess I usually view it as only regarding health risks and complications, not financial ones as well. Consent is another whole issue that is so poorly implemented in healthcare, but I think that is a whole separate, though related, beast to be tackled in another post of mine. For example, I had my tonsillectomy two days ago. Before I went in to surgery, someone came up to me and said "We need you to initial here and sign here. This says that we can bill your insurance." Well, I try to read what I sign, and it actually said very little about billing insurance, but did have a section about lawsuits and mediation and my rights as a patient should I decide to take legal action. There is this dangerous area where the worst of law and healthcare mix to form a very perverse system of consent forms, lack of transparency, and situations where you have no choice often but to consent. But anyway, that's another issue that I'd like to discuss.

But yeah, so I had considered that informed consent may play a role here, but usually understand that to deal with health risks and complications. Shared decision making is a new term to me, I'll have to look that up. I'm very fascinated by this topic though. We've got some big issues and I'd love to be a part of the solution. If not a global or national solution, at least a local solution where I can run a transparent, ethical practice where I am proud of the work I perform. I think patients want that, and that that business model would sell itself.

So Taylor, what are your plans post graduation? Also, have you read anything by Atul Gawande? He has some excellent pieces that cover these type of medical conundrums. I'd recommend "Complications" and "Better," or any of his New Yorker articles.

Monica Proulx said...

You wouldn't go to a restaurant and order off a menu that had no prices listed, (and we're talking about pretty inexpensive stuff compared to medical and dental care). So why should we do it when going to the doctor or dentist? Citizens need to revolt!! If I had to have an expensive medical procedure done I'd want to know up front how much it would cost and what portion I would be responsible for before I decided to have it)!