I learned about the sordid history of health care and health insurance while writing a paper in college for a two unit class that was pass/not-pass (and therefore useless to my GPA.) It forever opened my eyes to the lunacy that we loosely term health care in America.
Back in the Dark Ages, before penicillin was available, doctors had free reign to charge their patients whatever they wanted. There was no such thing as health insurance. This is pretty much how most undeveloped and developing countries function. You have to pay cash, or you die.
Which, if you think about it, sucks big time, because most of the time they couldn’t really take care of your problem anyway.
Some ethical, socially-minded physicians charged reasonable fees and actually took care of their patients, but all it really takes is a few asshats to make a stereotype stick. So when the snake-oil salesmen came to town, a lot of people started figuring that most doctors were asshats.
Fast forward to the Great Depression, and FDR’s administration. The Social Security Act is created. It doesn’t have any provisions for health care. But a curious thing evolved. The government decided that employers were responsible for their employees health.
Which, I guess, makes some sense. I mean, it’s not too ethical to work your employees to the bone, and then discard them when they get sick from all the stress you put them under. In most civilized places, that is usually called exploitation.
This is where the bullshit gets really interesting.
So the corporations make deals with the insurance companies (which in some cases were merely one branch of a horizontally integrated corporation dealing with another branch of said company.) The corporations said, you give us cheap rates, and we’ll sign up all our guys with you. And when the choice is taking cut-rates, and not getting paid at all, the choice is pretty easy to make.
So the nascent health insurance companies get all this volume from the corporations, but their bottom lines aren’t doing so hot. Part of this is because it’s ridiculous to offer insurance on something that’s going to definitely happen more than once. I mean, not everybody loses their house in a flood, a fire, or an earthquake. Not everybody gets into a car crash. And while everybody dies, it’s generally a one-time event, so life insurance still makes sense, too. But health insurance? C’mon. Everybody gets sick. And the sicker you are, the more often you’re going to get sick. To bet on that (because if you think about it, providing insurance is just another way to gamble) is absurd.
At the same time, the insurance companies are trying to make a profit. So they go to the doctors, saying that if you accept our insurance for payment—even though it’s cut-rate—then we’ll refer all these patients to you. Win, win! So while the doc is only getting paid 50% of their normal fee, their volume goes up.
Then the Great Society opens up the late 1960’s and passes Title XII. Medicare and Medicaid are created. Health insurance for those who paid their dues, and for those who for various reasons can no longer make a living. This was a great idea! And then the piranhas came to town.
So my dad has apocryphal stories of this doc he used to work for. Let’s call him Dr. B. So Dr. B paid my dad a fixed salary and loaded him up with 30 patients a day. Meanwhile, he’s going on cruises, jetting off to Europe, driving his Mercedes, sailing his yacht. The secret to his success?
“All right. Today, we’re going to bill these people for their monthly visit.” Which seems pretty normal until you realize that he never really saw any of these patients.
In the end, my dad was subpoenaed to testify against Dr. B in the civil suit alleging Dr. B of insurance fraud. Fun times.
But this is where the on-going stereotype of the doctor who orders unnecessary procedures to fill their pockets comes from. Now, the insurance companies are in this to make money, and they looked at all this bogus billing as basically theft. The federal government and the different state governments were none to happy either. So the feds got busy with raiding doctor’s offices and fining them millions of dollars because they forgot to dot all their i’s and cross all their t’s. The guys who continued to make money made sure their charts were fully buffed, and sparkly/shiny, especially the notes for the bogus visits, and they never got called out. They may even be practicing to this day.
Meanwhile, the insurance companies came up with another idea entirely: HMOs. The docs were completely out of the loop on this one. Basically the insurance companies and the corporations colluded. The insurance companies were like, “All right, we’ll cut the rates you’re paying even more if you sign your employees up for this new plan we’re trying. It’s designed to cut costs by promoting preventive care, providing an incentive for making sure that people stay well (and prevent docs from billing for bogus visits.) The corporations were all like, “Deal!” and the rest is history.
Oh, sure, a lot of HMOs pay on the old fee-for-service schedule. Maybe 25% of your “customary charge.” But a lot of them do the whole capitation thing. What is capitation? In an effort to reduce the chances of billing for bogus visits, what this meant is that they paid you a set amount every month for every patient of theirs you followed, even if they never got sick and never came to your office. On the surface, it’s a pretty sweet deal! And when they show up and need to be seen, they pay a token fee ($5-$10, maybe) so that patients aren’t tempted to show up every day.
The problem is if you have to see them more than once a month. Because, guess what, you don’t get paid any extra. If the capitation fee is $10 a month, it doesn’t matter if they come zero times, once, or 30 times. You still only get $10. This can become a problem, particularly if you service an area full of needy people who feel entitled to health care.
A word about “customary charges.” Initially, the logistics of billing would go like this. You send a claim for $150 for your office visit. The insurance company will give you $75. You are expected to accept this payment as payment in full (you did read the fine print on the contract, right?) You can’t bill the patient for the difference. That’s all there is, there ain’t no mo’. So what some clever asshats did was figure they should charge $300 for their office visit, and then they’d get paid $150, and in some cases this actually worked. Of course, if a patient didn’t have insurance and paid cash, you’d only make them pay $150, because they’d probably kick your ass for asking for $300 for doing almost nothing.
When the government decided to get involved in all this, they weren’t amused. So the law of the land became that you could only ever charge your “customary” charge. So if you charged cash patients $150, you better charge Medicare $150, even if they only pay you $45. If they ever find out that you charge your cash patients less than you charge Medicare, or if you charge insurance companies differently as well, well, they figure you’re a lying piece of shit, and you have to go to jail. Do not pass go. Do not collect $200. Whoops.
But the docs of that era were a tenacious bunch. All they did was increase their volumes. 10 minutes, 7 minutes maybe of face-time with patient. Thirty to forty patients a day. They had grown accustomed to their incomes.
Fast-forward to the 21st century. The average health care CEO is now far wealthier than any doctor, when you correct for the number of hours worked. The average doc starts the game off in a big hole, on average $150k of educational debt, and climbing. And then there’s the malpractice game. Oh boy. Luckily, some states (like California) have come to realize that it does no one any good if every doc leaves the state because of astronomical malpractice insurance premiums. Look what has happened to Florida and Nevada, after all.
Don’t get me wrong. No doc is ever going to starve. You’re probably still going to be making six figures. Of course, no one ever points out that not only is that before taxes, that’s before you pay your student loans (at least a couple of G’s a month) and your malpractice (starting at $1k, and going up the more invasive and dangerous the procedures you perform.) But, hey, the American Dream!
Now I never did get into this for money. Part of it is the idealistic part of me that I never managed to kill, that actually finds joy in helping people. Even in small, unmeasurable ways. Even if whoever I’m helping doesn’t give a shit. I mean, I get to use my knowledge and skill to at least improve someone’s quality of life. It’s kind of cool.
The other part is that I was destined for a career in health care. My dad is a doc. My mom is a nurse. All my aunts are nurses. My brother is a nurse. It was what I knew. The hospital and the smell of Pseudomonas brings me back to my childhood, it does.
So my career choice was not made as some sort of compromise. I knew what this would entail. I knew the bullshit I would have to deal with. Most of the time, it’s worth it. Seriously. Even just a little thank you is actually rewarding.
So it gets me bummed out when I read stuff like this:
You can’t make me feel pity for Doctors - sorry. They choose that life, and they are generally very well rewarded for it.
And I’m like, great. Just what I need. Yet another guy as an adversary. Instead of someone I could co-operate with, to make their life a little better. The modern doctor-patient relationship is about partnership, these days. But if we approach each other as enemies from the onset, it’s just going to go wrong, sometimes in really terrible ways.
Oh, I don’t blame you for feeling this way. The old school asshat docs who were into fraud really screwed all of us. And now we have to pay for their sins.