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Size matters: Study shows big difference in office visit reimbursements

jaeger19 said:
The major flaw in your argument is the assumption that in HC we would use the power to get better deals for pharma.

You got it. When George Bush signed the bill to cover prescriptions it contained a rider that forbid medicare negotiating the price of drugs. That was a bipartisan bill.

Its seems unreasonable to assume that a universal healthcare system would negotiate when they did not negotiate for medicare coverage.
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It is not "bi-partisan" when the GOP congress would not pass it and Bush would not sign it without that rider forbidding price negotiation. So yes I thnik there would be price negotiation if it was not forbidden. Why shouln't the US govt. get tha same deals as other nations do? You do know why it is cheaper to source many drugs in Canada don't you?
 
Greenbeard said:
That hits on one of the great tensions today. You could have a sort of ZocDoc world where you use an app to find the next available appointment (and if you imagine a world where you could incorporate relative price of different docs, then that can factor into decision-making as well) and surf the medical system like any number of other on-demand industries.

But you bump up against the (evidence-based) philosophy that having a regular source of care and better coordinating care is ultimately better for people's health and can avoid unnecessary or duplicative service delivery. In other words, the notion that there are responsibilities that belong to the system itself and that could fall by the wayside in a ZocDoc world. A philosophy that's been driving not only clinical models built around the primary care provider as your "medical home," but also financial models that regard the primary care provider as the entryway into an entire system of interconnected providers that takes on responsibility for your health, the quality of care its providing you, and the health care costs you incur.

These are very different approaches and they have significant potential ramifications for care delivery, health, and pricing, among other things.



Yet the whole idea of a network--really, one of the pillars of managed care competition--is that network management can help keep down price growth. If you can credibly threaten to exclude a provider from your network then you've got some ability to push back against price increases.

And we see that in the OP: relative negotiating clout matters. Can the payer offer an adequate and attractive network without that provider vs. can the provider attract revenue and volume without that payer? The answer will influence the prices the payer agrees to pay the provider.



That might wipe out most of what people would generally call "unwarranted" price variation between providers, but you'd likely need to have a public conversation about when and why prices should be able to vary. That's a conversation my state is in the middle of having and it's likely going to generate some controversy.
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Two points.

On this:
financial models that regard the primary care provider as the entryway into an entire system of interconnected providers that takes on responsibility for your health, the quality of care its providing you, and the health care costs you incur.
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the problem with these financial models is that the primary care provider If they are a part of a network of interconnected providers... then they have a financial incentive for overutilization.

Yet the whole idea of a network--really, one of the pillars of managed care competition--is that network management can help keep down price growth. If you can credibly threaten to exclude a provider from your network then you've got some ability to push back against price increases.
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the irony here is that the network philosophy has also created an environment where there is less competition among providers. Insurance negotiated hard for lower reimbursement rates. Larger providers were inherently more efficient, controlled the patient flow and could drive utilization, and had larger volume. So they could offer lower reimbursement rates.

the insurance then gave them an advantage over smaller independent providers. Over time.. those providers found they could not make it in with lower or stagnant reimbursement rates and so eventually sold out or simply retired. Giving the larger providers more marketshare.. until the point where the insurance company had little negotiating power anymore... because they had driven smaller competitors out of business.


That might wipe out most of what people would generally call "unwarranted" price variation between providers, but you'd likely need to have a public conversation about when and why prices should be able to vary. That's a conversation my state is in the middle of having and it's likely going to generate some controversy.
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It would be interesting to see that conversation. There are many elements to prices. So the state sets a reimbursement schedule. That schedule could be to low for rural providers because of extra costs being rural. OR it could actually be too high for rural areas that have more volume because of fewer providers. Inner city schedule may be too low because of indigent care.. and increased costs for cities (like cost for space). or they might be too high.
 
jaeger19 said:
The problems is.. a medicare for all plan is unsustainable. Its not a fiscal reality.

What americans would find is that instead of medicare for all.. they would have Medicaid for all. Which is far inferior than what they have.
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Why would it be unsustainable? Every other country makes it work and it is cheaper than what we have now. What is unsustainable is the system that makes profits for insurers the most important part when they don't treat a single patient.
 
iguanaman said:
It is not "bi-partisan" when the GOP congress would not pass it and Bush would not sign it without that rider forbidding price negotiation. So yes I thnik there would be price negotiation if it was not forbidden. Why shouln't the US govt. get tha same deals as other nations do? You do know why it is cheaper to source many drugs in Canada don't you?
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Again.. why do you think there would be price negotiation. why didn't Obama and the democrats fix it with the ACA? Gee.. whats their excuse.

The problem with you liberals is that despite all evidence to the contrary.. you assume that government is going to operate for the benefit of the average American.. and not for the wealthy and connected corporations.

Why won't the US get the deals that Canada gets. Lets see.. because our government is beholden to those corporations like big Pharma that gets them elected.. that's why.
 
iguanaman said:
Why would it be unsustainable? Every other country makes it work and it is cheaper than what we have now. What is unsustainable is the system that makes profits for insurers the most important part when they don't treat a single patient.
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no.. every country does not have medicare. Our medicare IS AWESOME. Miles better than what Canadians have, miles better than Australians have and miles better than the Brits. It covers way more things, like outpatient therapy and durable medical equipment.. it provides more choice of treatment.. no preauthorization, and more choice of providers.

IT only works in America because you pay your whole life for Medicare. you pay in every paycheck and don't take out until you are old enough. And even with that.. with the baby boomers.. medicare is financially strapped.

And now you think that if you add millions of americans onto the program.. who have not paid in.. who might not even be able to pay in.. and yet.. all these americans will start being able to get medicare benefits immediately? With the program already financially strapped? Watch medicare collapse.

so it might be called medicare.. but it would actually be more like American Medicaid. WHICH for americans is about the worst insurance you can have (the VA is a close second).

(the real irony when you compare other countries is that our MEDICAID is pretty much better than most other countries single payer).
 
jaeger19 said:
Again.. why do you think there would be price negotiation. why didn't Obama and the democrats fix it with the ACA? Gee.. whats their excuse.

The problem with you liberals is that despite all evidence to the contrary.. you assume that government is going to operate for the benefit of the average American.. and not for the wealthy and connected corporations.

Why won't the US get the deals that Canada gets. Lets see.. because our government is beholden to those corporations like big Pharma that gets them elected.. that's why.
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You are right about the over 200 million spent every year by big pharma to lobby Congress. but that does not make it right or un-fixable and it is not a problem in other countries.
 
jaeger19 said:
Again.. why do you think there would be price negotiation. why didn't Obama and the democrats fix it with the ACA? Gee.. whats their excuse.

The problem with you liberals is that despite all evidence to the contrary.. you assume that government is going to operate for the benefit of the average American.. and not for the wealthy and connected corporations.

Why won't the US get the deals that Canada gets. Lets see.. because our government is beholden to those corporations like big Pharma that gets them elected.. that's why.
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No there were no new pricing measures of drugs in the ACA. There were attempts to pass bills to overturn the restriction in Medicare part D though and they could not overcome Republican dissent. when you say Govt. you really mean corrupt members of Congress who are bought off with lobbyists money.
 
iguanaman said:
You are right about the over 200 million spent every year by big pharma to lobby Congress. but that does not make it right or un-fixable and it is not a problem in other countries.
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Its about not getting a system that's WORSE for the rest of America.

I know you love the idea of big government healthcare. Tell me.. do you want Donald Trump in charge of your wifes healthcare. How about Mike Pence? How about a michelle Bachman.. or a Rick Perry?

You do know that currently there is a prohibition on government programs paying for abortions right (with a few caveats here and there). That prohibition has lasted BOTH republican AND democrat administrations.

Just about all single payer systems are WORSE than our private system... in most cases.. their system is worse than our MEDICAID.

What you are going to see in America if you go to a single payer system? Is a terrible system for the poor and middle class. With private insurance for the wealthy and upper middle class. Which is what most countries have. And the big corporations will love it.. because all those negotiated benefits go "poof" away.

The insurance companies love it.. because they will administer the government system for a nice fat profit. (like they do medicare and Medicaid).. and then they will offer expensive but Cadillac insurance to the rich and supplement plans to the upper middle class.


bac
 
iguanaman said:
No there were no new pricing measures of drugs in the ACA. There were attempts to pass bills to overturn the restriction in Medicare part D though and they could not overcome Republican dissent. when you say Govt. you really mean corrupt members of Congress who are bought off with lobbyists money.
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What I mean is the way the US government works. Members of congress who are bought off with lobbyist money is nothing new in our history. Its why we have to be very careful about what we hand over to the government.
 
Risky Thicket said:
But the point is the system can and does work in some places.
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But isn't that a problem?

It's pretty much the nut of my argument. What's to stop the federal government from horking up the payment side as much as they have with Medicare, or the treatment side as much as they have with the VA? Sometimes and some places doesn't instill a lot of confidence in me. And that's looking at their track record...not what we think might happen in a rosy future, but what already happened in the past and is currently happening in the present.
 
iguanaman said:
Because the lowest bidder is always your best choice when your life is at stake? It is like you come from another planet. Healthcare is not a free market commodity and the lowest common denominator does not apply. Removing the insurers "cut" is the only logical way to reduce costs. They do not treat anyone.
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Do auto insurance companies cause auto body shops to increase their prices? It's not like insurance companies actually fix cars, right?

And I don't necessarily want the lowest priced doctor, just like I don't want the lowest price mechanic... but the fact that cheaper ones are out there influences the price of more expensive ones.
 
jaeger19 said:
What I mean is the way the US government works. Members of congress who are bought off with lobbyist money is nothing new in our history. Its why we have to be very careful about what we hand over to the government.
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Or we can simply take the money out of politics and make politicians taking money from special interests illegal. It would solve a myriad of problems. Giving up is the suckers way out.
 
jaeger19 said:
the problem with these financial models is that the primary care provider If they are a part of a network of interconnected providers... then they have a financial incentive for overutilization.
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In this scenario it's not just a PCP out there by himself, that PCP sits under an overarching financial umbrella (some corporate entity) along with hospitals and other providers. That corporate structure is what enters into risk-based contracts with payers and that structure is responsible for translating those external financial incentives for cost containment, quality improvement, appropriate utilization, etc into internal incentives for frontline providers.

If providers in that organization are pointlessly running up the tab and the organization has downside risk, the organization will have to pay some of that money back to the payers. Which, if the internal financial incentive scheme is designed well, the responsible providers will feel the most.

the irony here is that the network philosophy has also created an environment where there is less competition among providers. Insurance negotiated hard for lower reimbursement rates. Larger providers were inherently more efficient, controlled the patient flow and could drive utilization, and had larger volume. So they could offer lower reimbursement rates.

the insurance then gave them an advantage over smaller independent providers. Over time.. those providers found they could not make it in with lower or stagnant reimbursement rates and so eventually sold out or simply retired. Giving the larger providers more marketshare.. until the point where the insurance company had little negotiating power anymore... because they had driven smaller competitors out of business.
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That's usually the argument large provider groups use: their scale and cohesion allow them to offer better care at lower cost than than unconnected providers in a fragmented market. The million dollar questions have always been: (1) is that true, and (2) if so, how do you ensure that the cost savings are passed on to payers and consumers in the form of lower prices. No definitive answers have emerged yet.

It would be interesting to see that conversation. There are many elements to prices. So the state sets a reimbursement schedule. That schedule could be to low for rural providers because of extra costs being rural. OR it could actually be too high for rural areas that have more volume because of fewer providers. Inner city schedule may be too low because of indigent care.. and increased costs for cities (like cost for space). or they might be too high.
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The conversation in this state is specifically about variation in commercial prices privately negotiated by different providers in the same market. Discussion of state rate-setting may come out of it but that isn't where it's starting.
 
iguanaman said:
Or we can simply take the money out of politics and make politicians taking money from special interests illegal. It would solve a myriad of problems. Giving up is the suckers way out.
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Good luck with that.

Or we could deal with the reality that our government is and has been and all government around the world are for thousands of years. And be careful what and how much of our lives we turn over to our politicians to control,
 
jaeger19 said:
Good luck with that.

Or we could deal with the reality that our government is and has been and all government around the world are for thousands of years. And be careful what and how much of our lives we turn over to our politicians to control,
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So we should throw ourselves at the mercy of the corporations and special interests and hope they won't try and ruin us? It is either Govt. or them, there are no other alternatives.
 
Carjosse said:
You would not need a national program, even here in Canada it is administered provincially to varying results. I imagine you could probably just group states together.
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In the states I expect one state would offer very low or poor health coverage, while a neighboring state might offer very high levels of care. Leading to people living in one state and using the services of the other, to take advantage of the probable lower taxes in one while using the services of the other
 
Lord Tammerlain said:
In the states I expect one state would offer very low or poor health coverage, while a neighboring state might offer very high levels of care. Leading to people living in one state and using the services of the other, to take advantage of the probable lower taxes in one while using the services of the other
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Well here what would happen is that the province that is receiving all these patients would just bill the other state for their care. This would incentive the other state to actually provide good healthcare.
 
Greenbeard said:
In this scenario it's not just a PCP out there by himself, that PCP sits under an overarching financial umbrella (some corporate entity) along with hospitals and other providers. That corporate structure is what enters into risk-based contracts with payers and that structure is responsible for translating those external financial incentives for cost containment, quality improvement, appropriate utilization, etc into internal incentives for frontline providers.

If providers in that organization are pointlessly running up the tab and the organization has downside risk, the organization will have to pay some of that money back to the payers. Which, if the internal financial incentive scheme is designed well, the responsible providers will feel the most.
.
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nobody said its "pointlessly"... Its very pointed on running up the tab. the issue is... 1. Utillization plays a role in that reimbursement. There is NO model where it doesn't. No one is going to pay a provider for not providing care. Even in PPS models.. utilization plays a role.
2. There is little mechanism to decides what is "pointless utilization". When a general practitioner in a system refers a patient to a "pain specialist"... basically to get a referral for a tens unit.. or medication management that BOTH could have been done and should have been done by the GP himself... there is no mechanism that catches this overutilization.

That's usually the argument large provider groups use: their scale and cohesion allow them to offer better care at lower cost than than unconnected providers in a fragmented market. The million dollar questions have always been: (1) is that true, and (2) if so, how do you ensure that the cost savings are passed on to payers and consumers in the form of lower prices. No definitive answers have emerged yet.
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Yep. Been there done that. The first is whats the definition of "lower cost". This is where it gets sticky. Because per procedure? Yes.. they can be lower cost. Its the efficiency of having more volume per amount of infrastructure.
On the flip side is "the better care".. and generally no.. they don't provide better care. Being in a bigger group doesn't make you a better provider. It doesn't make you better at differential diagnosis.

It tends to make it appear that you provide better care. One is from overutilization that occurs.. so patients perceive better care. And because problems can be solved "in house".

so the patient that crashes in an outpatient surgery center or a small hospital during a total knee surgery gets sent to the regional center for advanced care. And they say "they (the smaller hospital) almost killed me.

Meanwhile.. in the regional center.. the same thing happens in a total knee surgery.. but they can take care of it right there and the patient says " they (the regional center) saved my life.".

The second caveat is that a larger care organization can manipulate the numbers because it controls patient flow.

Back in the day.. A hospital would admit a person in the hospital and keep them until they were better. Longer in the hospital and more money it made.

then their was the DRG system... so hospitals eventually pushed patients from the hospital, under the DRG to a swing bed or their own snf.. after three over nights. And they pushed costs out of the DRG.. and into the SNF. So an MRI the patient needed was ordered when they were in SNF. Or swing bed. Expensive medications, treatments.. ordered when in swing bed or sNF.

Then PPS for snf started. So hospitals ditch swing beds and snf or started cherry picking patients so uncomplicated rehab patients with little cost stayed in the hospital snf.. for the magical 20 days that medicare pays 100%.. and then dumped more costly patients on independent SNF's.

And now we have bundled payments... now hospitals send patients appropriate to rehab.. to assistive livings instead. and Pressure the home healths (especially if they own them) to not refer back to the hospital.

the whole point is that large provider networks have the ability to control patient flow to maximize their reimbursement and in some cases that causes increase in utilization or a decrease in needed services. The problem is rarely are their mechanisms in place that can catch this.
 
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