Changes in healthcare insurance is on everyone’s mind. Its in the media, the papers, the posts, the blogs, everywhere. With the turn of the new year and Obama Care in action, it seems that for the moment, the health insurance industry is at the forefront of many conversations.
As a physician, who has been involved on the “other” side of the fence, there is a harsh reality that is slowly coming to the surface for the public. Your doctor may not take your new Obama Care card.
I will try to describe as simply as possible the inner working of your doctors office and the realities of this business. Yes, this is a business and as hard as it is for some to wrap their minds around this idea, we are in a free market society and medicine falls into this role.
In the traditional insurance medical world, your doctor has a team of individuals that does nothing medical whatsoever. This team is there for one purpose… to make sure that promised money makes it from the insurance carrier to the office. Here’s how it works:
First- If a medical practice decides that they want to take insurance, the insurance carrier will negotiate very strongly about the rates onto which the practice will get paid. These rates typically will follow Medicare rates (Medicare is government run health insurance typical given to those over 65 years of age). Medicare rates are determined by a group of individuals who represent all of the medical subspecialties (cardiology, family medicine to neurosurgery) that sit in a room and assign monetary values for treatment; everything from the flu to removal of a brain tumor. This is done on an annual basis. The insurance carriers will review this data and then based on their business practice will follow the trends set by Medicare. Some pay more that Medicare rates. Some pay less. As a family medicine doctor for example, a patient who comes to see me for a strep throat infection, the medicare payout is about $40. If the system was simple and clear, the story would stop here and we could move forward. But alas, the story gets more complicated.
The financial team for the doctor- is comprised of a biller- to bill the insurance company, a coder- to make sure that the right code was entered and every i was dotted and t was crossed, and then an accounts receivable person to make sure that money is coming in. That’s 3 people needed just to make sure that we get our $40. The charges that are billed out to insurances can take anywhere from 30 to 45 days to actually receive payment. If there was any discrepancy in the form that was submitted to the insurance carrier, an extra dot, an extra dash, any mark that they don’t like, the insurance carrier will refuse payment. The financial team then has to catch that refusal of payment and then resubmit the charges for reimbursement. This can take an additional 30-45 days.
So at this point, for the patient that was seen, the practice has not received any money, however, the practice needs to pay for the three individuals for the work they have done, as well as the medical personnel that help the doctor- the receptionist, the medical assistant or a nurse.
This too common of a scenario is already a losing proposition for the practice. How does the practice try to cope with this truth? The practice increases the volume of patients seen per day, in the hopes that more payment claims will go through and get paid timely, to offset the ones that are not getting paid. This is why studies show the average time a doctor will spend with a patient is less than 10 minutes.
What does this have to do with your brand new Obama Care card? Obama Care will pay even less than Medicare. Currently, the safety net health insurance for some Americans is called Medicaid. The payout to practices from Medicaid are far less than Medicare. Why? Medicare has its own funding (look at your paycheck deductions). Medicaid funding comes from state tax funds. For the same sore throat patient, Medicaid will pay about $30. The practice still needs to jump through the same hoops and procedures for payment. Obama Care is essentially Medicaid for the masses, a safety net for the general population.
A great question that a business person asked me is “why take Medicaid at all then?” Financially, he told me “this makes no business sense”. For some doctors, there is still a feeling of altruism of taking care of the sick who don’t have money to pay for their care. Many practices will limit this to a percentage of their practice, about 5 to 10%. Large hospitals systems and academic centers who see many Medicaid patients receive state funding to help offset their financial loss. However, with the addition of millions of people on a stressed system, there are not enough dollars to offset this cost.
Through my many conversations, most of the public assumes that Obama Care gives them access to healthcare. I know of many medical practices that are starting the process of opting out of Obama Care insurance. Financially speaking, they tell me it would bankrupt them. I was recently switched from my health insurance carrier to Obama Care, which I currently have. Obama Care should be viewed as a safety net in case you get really sick or really injured. That is not healthcare. Don’t assume that your favorite doctor will take your brand new Obama Care card. Would you?