About 18 years ago my son Pete had a big accident that took him to the Sutter Roseville Medical Center, the designated trauma center for the American River area where the 4,700 pound live oak tree fell on him. It was a very rocky course, he lost a kidney and had multiple fractures to the lateral processes of his lumbar spine and had a prolonged recovery lasting months, but the spinal cord was intact, his other kidney works fine, and he is alive and well and just gets a sore back sometimes. God smiled on us, is the way we looked at it.
What didn't smile on us was the surprise bill we received from the Sutter Roseville trauma surgery team. They obviously have no competition, since they are the only trauma surgeons at the only trauma hospital in the area. So why should they sign agreements with health insurance companies to join their approved networks, thus agreeing to a fee schedule that generally calls for lower payments for their services than if they had no restraint at all? Why should the hospital insist that they do so when they contract with them; what's in it for them? Fairness to patients? Don't be naive, we're talking about money here.
Despite the fact that we were well insured, we were then faced with many thousands of dollars of fees that the insurance wouldn't cover. This is called “surprise billing.” We protested – I'm a doctor and I don't take these things lying down – and eventually Blue Shield paid since it was an emergency and we really had no choice. Which didn't prevent them from claiming tens of thousands of dollars from the payments Peter received from the insurance companies that covered the liabilities of the parties who were responsible for the tree's having fallen. But that's insurance companies. No wonder they are hated. It is a hatred well earned.
We found out later that our situation was not unique, and today, all these years later with so many families having suffered, “surprise billing” has at long last become an issue to be solved. There are obvious very directive solutions available, such as requiring that all doctors with hospital contracts be part of the networks with every insurance company that the hospital has contracts with, but that has not been our governmental style, when special interests are well represented but people in general are not.
There is another out-of-network issue that is somewhat related and also troublesome. Sometimes you need a doctor or a facility that is outside of your insurance network. It might be a specialized service available only at a university, for instance. Or it might be just a specialist who is of decidedly higher quality than who is in your network. Your insurance company is supposed to negotiate with the needed out of network service provider and pay the bill, but they will predictably object that you really didn't have to go out of network, that the adult oncologist would have been “good enough,” and your child really didn't need a pediatric oncologist, or that their network member was good enough despite the opinion of your primaryc are doctor. Patients might have to fight for this to be covered, it can take a long time, the result is not preordained, and isn't that just what you need when you are dealing with illness, uncertainty about finances? It's really a disgrace, IMHO.
The issue can actually be rather subtle. The best primary care doctors want to act as the patient's medical fiduciary, looking out for the patient's best interest in every way, beholden only to the patient, not to the company who employs him or her, or to the payer. Sometimes, that means finding the best person and facility for the patient with every condition and for every test. Networks, based on who signs up for whatever reason, and those who don't sign up for whatever reason, constrains the ethical duty of the health fiduciary. What can be done to enable the doctor to refer the patient for the patient's best interest, despite network relationships? Something should be done.
In a recent paper in the New England Journal of Medicine, Prowell et al. suggest some remedies for the surprise bill in emergency care, and for paying for the necessary out-of-network care with “inadequate networks,” “without squelching desirable market dynamics,” as the saying goes. (https://www.nejm.org/doi/full/10.1056/NEJMp1815031)
What they propose is “streamlined dispute resolution.” This depends on the health plans and providers submitting to binding arbitration to determine what charges are “reasonable.” Admirably, they turn to the final offer method employed by Major League Baseball for a model.
“In this approach the arbitrator must choose one of the two parties’ final offers, rather than determine the “right” amount independently. Although arbitration has some administrative costs, narrowing the options and disseminating precedents simplifies the process and encourages the two sides to reach a settlement on their own.”
They suggest that this technique could be used in each case when an out-of-network provider who rendered a service refused to accept the insurance company's offered payment, or it could be done prospectively.
While what they suggest would be an improvement over the current restrictive and patient-unfriendly non-system, it's really ridiculous to approach such a systematic problem on a case-by-case basis. Patients just should not be subjected to all this pressure, all this decision-making when they have such limited information. And primary care docs shouldn't have to waste time in fulfilling their fiduciary duty, time that could be better used inputting data to their EHR's. The law and organizations should work for this vital duo, not the other way round.
So, here's what I suggest. One, we need to compel hospital-based doctors to belong to the same networks that their hospital does. That's just got to be the law. What should be the rate of their pay? Well, why not use that same final-offer method? It's true that rates can't just be standard throughout a state or a region; sometimes there are scarcities and sometimes plethoras, and the market needs to be used to find proper rates. I would think the final-offer method should serve that purpose quite well. Exit the surprise billing problem.
Two, out-of-network ambulatory consultations, tests, and even prolonged care needs to be available to the vital duo (primary doc and patient) on a routine basis. One way to do this would be to introduce a law that out-of-network providers be paid at 110% of the rate they are paid by their highest paying network of which they are a member (or maybe second highest?) Not only is this obviously better for patients, but with this increased competitive pressure on networks providers who are currently protected by the assured in-network referrals, the quality of the network providers themselves should improve. It's true that a few providers are members of no network at all; for them, a percentage of Medicare rates could be established, or they could just be generally unavailable ( but only if there were an adequate number of similar providers available.) Presto! Free choice of patient and primary care provider would become much more of a reality, and market competition would be enhanced.
Freedom is a precious thing, but the time for freedom in medicine is long past. It is ruled by oligopolistic insurance companies, oligopolistic providers, and to a lesser extent by government. Our system will be replaced neither completely nor soon; what we need are rules and regs that progressively move it toward true competition in price and quality, and which progressively give patients a better deal. That's what my proposed new rules would do.
It's time to think straight and stop kow-towing to outdated concepts and imperfect understandings, and to show a little courage. Time's a wasting.