Twice As Expensive Doctor Visits, and Maybe Unnecessary Surgeries – A Tale of Two Stories

Two recent articles highlight the challenges we will face as our healthcare system changes with regard to how care is delivered and reimbursed. The first article from the NY Times, Medicare Panel Urges Cuts to Hospital Payments for Services Doctors Offer for Less, notes that large hospital-centric systems of care do not necessarily serve patients well in terms of cost and sustainability. The second on the front page of USA Today, Doctors Perform Thousands of Unnecessary Surgeries, shines a light on unnecessary surgeries and the need for patients to be vigilant about their own care, especially when procedures are recommended that are potentially only marginally helpful at best and mortality raising at worst. 

The NY Times article rightly points out concerns by CMS on the apparent dramatic rise in cost associated with simple office visits and procedures after private physician practices are acquired by large health systems. The tale goes as follows: what once cost a patient $58 dollars for a simple office visit now costs almost twice that, $98, as a hospital charges a “facility fee” on top of the physician office visit.

It is a system used throughout the country with the justification that costs are so much higher when provided in a facility based setting such as a hospital. The logic is extremely flawed, as there is really no difference in providing primary care and simple office based procedures like stress tests and echocardiograms in an outpatient setting as opposed to a hospital setting.

Billions of dollars in excess charges are paid annually through these arrangements. They are borne both by insurers and increasingly individual patients as co-pays and high deductible plans become more common. The issue has been magnified as more physician practices are acquired by larger hospital systems with the promise that bigger must be better. But sometimes bigger just means more costly.

The USA Today piece is a call for patients to be more vigilant when procedures are recommended for what ails you. Let me say I have the utmost respect for surgeons and those that perform life-saving procedures on patients. It is unfortunate that a few bad apples really do color the sense that doctors are only out for more money by doing more procedures. I have personally witnessed good surgeons having very difficult conversations with families when loved ones are critically ill and likely not to survive or benefit from a procedure.

Ultimately, patients do bear some part of the responsibility for pushing doctors to do something for them or their loved one, when doing nothing or medically treating a condition or living with a condition is the more reasonable course of action.

There is, however, a perverse incentive in our fee for service world to perform a compensated procedure rather than recommend medical management as a course of action. The larger question is how should we can structure a reimbursement system for procedural based specialties which fairly compensates them for consciously making a decision not to operate or perform a procedure. As one of the (many) sayings in medicine goes, how do we make the change from “don’t just stand there do something,” to “don’t just do something stand there” when the latter is better for the patient and our system.

So bigger is not necessarily better when it comes to medicine. Ask whether that office visit costs twice as much now that your doctor is affiliated with that new hospital system. And the next time someone recommends a surgical procedure the right decision may be to take the time, if you have it, to seek one more opinion before heading to the operating room. The money you may have to spend yourself for the knowledge of a second surgeon may save you the money spent on that operation.