Aug 14, 2009

Dr. Ornish is Right: Reimbursements a Major Determinant in the Way Medicine is Practiced

Dr. Dean Ornish, new Medical Editor at the Huffington Post, in an article entitled Resuscitating Health Care Reform, suggested that physician reimbursement is a major deterrant in the way medicine is practiced. He's right, but I'd go a step further and say, reimbursement is THE major determinant. Unfortunately, the overwhelming trend in managed care has been to pay primary care physicians (PCPs) very poorly for their services.

Managed care companies, through their self-serving provider agreements, shortchange PCPs on office visit fees and other primary services. That removes all incentive for these "front-line" doctors to spend time with patients, let alone offer them additional treatment or medical education. Whatever additional services a PCP might otherwise provide a patient by virtue of the doc's additional training, or sub-specialty, are derailed by inadequate reimbursements. So the PCP refers the patient away to a more costly specialist for treatment he might have handled himself.

In my experience negotiating direct agreements between employers and medical providers, cutting out the managed care middleman, we've found that "win-win" agreements based on fair reimbursements to PCPs are the best way to gain their support for employer-driven preventive care initiatives. Higher reimbursement of primary services also removes the disincentive to spend more time with patients and provide additional treatment. In the process of paying PCPs more, employer health plan costs have actually gone down, not up.

To create a healthcare system that removes disincentives for providing prevention and education, managed care companies will need to pay primary care doctors more, not less, for their services. Any public option will also need to do the same thing.

Ironically, most services provided by PCPs are relatively low-dollar evaluation and management (E&M) procedures, such as office visits, so the difference between a fair and unfair reimbursement is often just a few dollars. But that adds to a big loss of income, especially for PCPs who have lots of HMO and PPO patients. Until managed care companies stop gypping PCPs through unfair agreements and inadequate reimbursements, how can things possibly change?

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