Same Doctor Visit, Double The Cost

On August 26, 2012, the Wall Street Journal published a story describing a situation whereby a patient who sees a physician employed by a hospital essentially pays double out-of-pocket what they would have paid for the same exact office visit with a physician NOT employed by the hospital.

I actually wrote about this situation in January 21, 2012.

Beyond what the Wall Street Journal reported, what's going on?

Assuming all things equal whereby a private practice physician and a hospital-based physician are equally competent and the supporting staff for each are both equally good (such assumptions are debatable in some circles, but will be ignored here), it all comes down to money.

When a patient sees a private practice physician, the government-established fee schedule only incorporates payments to the physician.

When a patient sees a hospital-based physician, the fee schedule not only incorporates physician payments, but also additional payments to the hospital.

Now, the patient doesn't pay what insurance covers in either scenario, but typically there is a copay or coinsurance payment that the patient is responsible for that typically is 20% of the total charges.

Here's an example using the Medicare fee schedule from 2002. I elected to provide "old" 2002 data as this information can be found easily and corroborated, but rest assured, the numbers are starkly different and perhaps more lopsided today. Medicare was selected as it is the bar to which all other insurance plans are typically based on.

In a physician run private practice, the only charges that are incurred is from the "Physician Fee Schedule". In a hospital-based practice, a patient incurs not only the physician fee schedule, but also additional charges based on the "Outpatient Prospective Payment System".

As you can see, the physician fees are slightly higher in the private practice setting compared to hospital-based practice... BUT, given the additional hospital charges involved with a hospital-based practice, the patient ends up being charged more per service for a simple clinic visit ($16.48) than if they had been seen in the private practice office ($10.06).

The cost differential for the patient is far worse with any procedures ($62.62 versus $342.47).

For the same exact procedure or service, a patient automatically ends up paying more to be seen in a hospital-based practice.

This payment system is the same whether you go to a tertiary care teaching hospital like Massachusetts General Hospital or a tiny 98-bed community hospital.

As an aside... for any physicians employed by a hospital, it behooves you to consider this differential payment in terms of how a hospital determines your salary and productivity. Do they consider ONLY the physician fee schedule or do they also take into account the outpatient prospective payment system?

I should also mention that Congress is considering abolishing the outpatient prospective payment system for clinic visits only. Click here for more info.

Source:
Same Doctor Visit, Double the Cost. WSJ 8/26/12

Hospital-Based Practice Versus Physician Private Practice. Fauquier ENT Blog 1/21/12.

Elimination of Differential in Medicare Payment for Clinic E&M Services Furnished in Hospital-Based Outpatient Departments Proposed. Martinedale 12/10/11

Medicare rules for hospital-based clinics. American College of Surgeons. Vol 87, No 4

Medicare Physician Payment Updates and the Sustainable Growth Rate (SGR) System. Congressional Research Service. 8/6/2010

100% Patient Satisfaction Scores

What if I told you this 100% patient satisfaction score was due to a survey of only two people... that I personally picked?

Welcome to the big bad world of patient satisfaction scores.

Often (well... pretty much all the time), I come across an article, bulletin posting, or meeting where patient satisfaction scores are announced... but no background information to back it up. HOW many people completed the survey? HOW were the people selected? WHO administered the survey?

HOW many people completed the survey?

The number of patients who actually completed the survey is very important. Mainly, because of the variance that may occur month-to-month as well as ease in manipulating the results.

Let's assume only TWO people completed the survey. The first month, both give me a thumbs up giving me a score of 100%.

However, the following month, another TWO people completed the survey, but only one gave me a thumbs up giving me a score of 50%.

NEWSFLASH!!! "Patient satisfaction scores plummeted 50% over a 1 month period of time!"

In order for meaningful interpretation of patient satisfaction scores, enough survey results MUST be obtained, especially when comparing scores across time.

HOW were the people selected?

Let's pick on the emergency room...

If I wanted to "pad" my results, I would tend to provide surveys to patients who had simple problems and who were seen quickly.

Child with an earache? Let's seem them immediately in Fast-Track ER. [Look in the ear! There's an ear infection.] Here's some antibiotics. Can you also complete this survey?

As opposed to...

55 year old narcotic-addicted patient with fibromyalgia demanding a prescription for 500 percocet pills for his chest pain. I would probably not want this patient to fill out the survey. Neither would the patient as he would probably toss it.

Granted these are extremes, but if performance bonuses are provided to departments with the best patient satisfaction scores and the ER staff were the ones providing the surveys, one can easily manipulate the results in their favor.

WHO administered the survey?

As mentioned above, survey results can be manipulated depending on who provides or gives the survey, ESPECIALLY if money is involved based on the results of the survey.

In order for survey results to be meaningful, a third uninvolved party should be the one to administer the test.

Survey Fatigue

Now even if the survey was done dispassionately and adequate number of surveys were completed, there's still the problem of survey fatigue...

What's that?

I don't know about you all, but I get about 3-4 letters per week and at least one phone call per day asking me to complete a survey on my car, toothbrush, tater tots... etc. You name it... there's a survey for it now.

Now add how many questions are asked... Hopefully one so it's quick.

But also HOW the questions are asked (yes/no versus a scale of 1-10).

As a person completing a survey, if I had my way, there would only be one question that is a yes/no question.

The more questions there are and if they are scaled rather than yes/no, the less likely I'm going to do it.

Now add if you are sick and in pain... How likely are you going to actually complete a 50 question survey on a scale of 1-10???

Probably not...

In fact, it's probably only going to be healthy individuals who tend to give better scores giving a skewed result.

Also, given the survey fatigue I and I bet most people have, it will be a rushed completion without much thought given. The default being five stars all the way down (I may not even bother to read the questions).

A decent way to look for survey fatigue is to have 2 randomly buried questions where rather than 5 stars being the best, 1 star is the best. Surveys where everything is 4 or 5 stars INCLUDING the reversed scale questions should be thrown out.

Summary

Whether good or bad, patient satisfaction scores can be VERY misleading if not completely wrong...

I should also add that whenever money is involved, NO test is going to be 100% accurate due to cheating that WILL happen one way or another.

I predict that this problem is going to get MUCH worse because health insurances will soon base how much reimbursement hospitals and physicians get based on patient satisfaction scores. We are talking about millions and millions of dollars.

Just read about the "no-child left behind" from the Bush era where student test scores influenced teacher pay leading to teachers allowing cheating on tests.

Hospital-Based Practice Versus Physician Private Practice

The other day, an astute patient of mine asked what the difference is between a physician who works for a hospital (hospital-based practice) versus a physician run private practice.

After all, a patient still sees a physician in either case...

Is there an actual difference from a patient's perspective???

Assuming all things equal whereby a private practice physician and a hospital-based physician are equally competent and the supporting staff for each are both equally good (such assumptions are debatable in some circles, but will be ignored here), it all comes down to money.

When a patient sees a private practice physician, the fee schedule only incorporates payments to the physician.

When a patient sees a hospital-based physician, the fee schedule not only incorporates physician payments, but also additional payments to the hospital.

Now, the patient doesn't pay what insurance covers in either scenario, but typically there is a copay or coinsurance payment that the patient is responsible for that typically is 20% of the total charges.

Here's an example using the Medicare fee schedule from 2002. I elected to provide "old" 2002 data as this information can be found easily and corroborated, but rest assured, the numbers are starkly different and perhaps more lopsided today. Medicare was selected as it is the bar to which all other insurance plans are typically based on.

In a physician run private practice, the only charges that are incurred is from the "Physician Fee Schedule". In a hospital-based practice, a patient incurs not only the physician fee schedule, but also additional charges based on the "Outpatient Prospective Payment System".

As you can see, the physician fees are slightly higher in the private practice setting compared to hospital-based practice... BUT, given the additional hospital charges involved with a hospital-based practice, the patient ends up being charged more per service for a simple clinic visit ($16.48) than if they had been seen in the private practice office ($10.06).

The cost differential for the patient is far worse with any procedures ($62.62 versus $342.47).

For the same exact procedure or service, a patient automatically ends up paying more to be seen in a hospital-based practice.

This payment system is the same whether you go to a tertiary care teaching hospital like Massachusetts General Hospital or a tiny 98-bed community hospital.

As an aside... for any physicians employed by a hospital, it behooves you to consider this differential payment in terms of how a hospital determines your salary and productivity. Do they consider ONLY the physician fee schedule or do they also take into account the outpatient prospective payment system?

I should also mention that for 2012, Congress is considering abolishing the outpatient prospective payment system for clinic visits only. Click here for more info.

Source:
Elimination of Differential in Medicare Payment for Clinic E&M Services Furnished in Hospital-Based Outpatient Departments Proposed. Martinedale 12/10/11

Medicare rules for hospital-based clinics. American College of Surgeons. Vol 87, No 4

Medicare Physician Payment Updates and the Sustainable Growth Rate (SGR) System. Congressional Research Service. 8/6/2010