Years ago I practiced cardiac electrophysiology in an “EP-only” practice in Cincinnati, Ohio. There were three of us in our practice at the time, providing EP services to cardiologists who were not part of the larger 50-man cardiology group. I was credentialed at 11 hospitals and worked out of three different hospitals’ EP labs. Needless to say, I tried to make it work, but found myself running between hospitals so often and being called back to hospitals where I had already been, that the practice model did not work for me. After trying to make the practice model work for three years (I was not very bright then and was SURE my challenges were because I was a neophyte to private practice medicine), I left.
From that experience, I learned what it took to be a private practice cardiac electrophysiologist and just how hard it was to generate revenue with only professional and technical revenues from EKG’s, event recorders, and Holters, and the evaluation and management (E&M) codes as we rounded on our patients at each of the hospitals each day. It was virtually impossible to run a viable practice, since paying the receptionist, the billing and collection clerk, the nurse or medical assistant and office overhead came well before our salaries. Only our professional fees collected from invasive electrophysiology procedures generated a high enough amount of cash flow to survive. These, I came to find, were one tenth of the amount that hospitals collected for the use of their lab facilities. This was almost 10 years ago and that practice no longer exists. It was eye-opening to say the least.
But was even more eye-opening was watching how prices were negotiated between hospitals, insurers, and employers. Hospitals had the facilities, insurers had the money, and employers had the potential patients. First came the negotiation between the insurers and the employers, as “products” with varying deductibles were offered to employers to garner their business and “trust.” To win those contracts, insurers commonly presented low-cost options attractive to employers. The insurer would then come to the hospital with a promise of 10,000 or more potential patients, but would want the lowest possible price, otherwise they’d take their patients to another hospital in the city. Hospitals, eager to grow their patient referral base, would bitch and barter, and finally a deal was struck. Only then did they report to the physician the deal that they had hatched and the amount the physicians could expect to see for each procedure. Doctors then had to decide if they were “all in” and willing to accept an individual carrier’s patient volume. If so, they would agree to see patients from that insurance panel at the negotiated rate. Usually, they had to accept a lower price for larger groups of patients without any ability to negotiate the terms agreed upon. The problem with Cincinnati was there were too many hospitals and too few big employers, so the negotiations were particularly challenging for insurers there: they had to offer really low prices. Suffice it to say, the intermediaries got theirs while doctors and patients were left to make due with the fees paid and the services paid for, often creating a vicious cycle with more patients seen in less time, higher patient deductibles and all-too-often patients that were unhappy with their patient care experience while paying more for the pleasure. Needless to say, Cincinnati has had trouble retaining doctors for this reason.
But this cycle is not unique to Cincinnati. The annual courtship between insurers hospitals and employers recurs countless times across the country. Insurers, hospitals, employers offering prices, patients, negotiation terms that doctors and patients have no hope of deciphering.
And now, to maintain their stronghold on the bureaucracy, we see the same negotiations going on at a national scale happening behind closed doors with our Congressional leadership.
No real change where patients and doctors know what’s going on.
Just the same old “same old.”