Managed care is forcing patients to get creative. Last year, I got a letter from an internal medicine colleague who practices just a few blocks from me. She and two other women internists took the step a few years ago that many of us find tempting: they stopped accepting medical insurance and see patients on a cash-only basis.
This eliminates all the hassles insurance companies bring to a medical office: insurance verification, authorizations, referrals, billing forms, chasing unpaid claims, figuring and collecting copayments and deductibles, determining which services are and are not covered, ad nauseam. They can see half as many patients in a day as I do and have a higher income because their “boutique” has almost no overhead costs. They do not spend hours on the phone discussing problems with patients who could not come in because there are not enough appointments available. They do not have to operate like supermarkets, maximizing the volume of services to make the tiny marginal profits that allow us to stay in business. My practice has enough loyal and wealthy patients for me to stop accepting insurance, but to close my practice to people who can- not afford to pay cash violates my ideals about universal access to medical care, so I could never do it, nor could most of my colleagues in the Berkeley area. Knowledgeable advocates for the poor would call me a hypocrite and point out that I do not accept MediCal insurance for adults (I do for children and pregnant women). My response would be that I need to keep my doors open if I am going to help anyone, and MediCal for adults does not pay enough to fund my overhead and keep me in business.
The letter read: “Dirk, our mutual patient, has had problems with diarrhea for almost two years,” she wrote. “If the lab [tests] I ordered do not reveal the cause, could you please refer him to Dr. J. [a local gastroenterologist]?” I swallowed a string of expletives and put down the letter to reflect upon what it meant.
A hardworking attorney in his 50s, Dirk had been my patient for nine years, as had his wife Connie. I did not know he had consulted another primary-care physician, and I therefore thought it best to call him before honoring his other physician’s request.
“I saw her because Connie recommended her,” he revealed. I felt a bit as though he were talking to a former lover. “It’s just easier to get in to see her, Jim.” I knew he was right.“I don’t have to deal with your front office to get in. When I call, the doc- tor calls me right back. I can come in within a day or two, and I know she has the time to listen to me. I go there because I can afford it. I would pay for the time to see you, too, but my insurance doesn’t allow me or you to do that.”
It was all true, and my guts sank as I put it all together. Dirk’s idea of a doctor–patient relationship has a long tradition in Western medicine and is the way most of my colleagues and I would prefer to practice, but it does not have any place in the healthcare scheme the insurance industry has created for us. On a typical day at the office, 70 to 90 charts cross my desk. I see 20 to 28 patients, and the other 50 charts have mes- sages from patients, prescription-refill requests from patients and pharmacies, or forms to fill out. I finish every chart every day, because patients expect, with good reason, that we will take care of their problems promptly and because I know the next day will bring just as many. My patients get 15-minute appointments, and there are no breaks between appointments during the three-hour morning and afternoon sessions. We schedule patients this way to make the best use of staff time; I can do paperwork and return calls while my staff members take lunch breaks. All of this takes me an average of ten hours every full day. I work three full days, one three-quarter day (afternoon and evening), and one half-day. This does not count the time I spend seeing patients in the hospital and in nursing homes, nor the time I spend on call, in meetings, and doing administrative work for my practice. If I changed my pace and spent 30 minutes with each patient, that alone would take 10 to 14 hours per day. If I saw fewer patients, the practice would not be able to pay our overhead costs, which are 60 to 65 percent of the money patients and insurance companies reimburse us.
Overhead costs continue to soar out of control because of what managed care makes us do to get our patients what they need and to get the insurance companies to pay us. When I took over another family practitioner’s practice in Berkeley in October of 1992, the other full-time doctor and I shared three employees. One worked the front desk and did all the billing, another split time between the front and back office, and a third managed the back office. Ten years later, with the equivalent of three full-time family practitioners seeing patients in our office, we have five employees working the front, three in the back, a full-time office manager, and a separate office doing the billing. The front-office staff spends much of its time verifying patients’ insurance because employers and patients change insurance plans, and therefore change doctors, much more often than in the past. One full-time employee handles only managed-care referrals and authorizations. So the boutique doctors need one full-time employee each; the rest of us need about three and a half.
Which is why most of us are grumpy these days. While I do not believe that any- one should shed tears for the poor underpaid doctors, I would like to provide some income information that many will find enlightening. I bill about $50,000 per month for seeing about 350 patients and delivering an average of three babies. Insurance companies and patients reimburse about 58 percent of what we bill (do you know any other professionals who accept that?), and after overhead expenses I get about 40 percent of what the billing office collects, which means I earn $10,000 per month before taxes, or about $50 per hour. I make a higher hourly rate writing for the Reader. Some of the lovely young drug company representatives — who come into my office with their short skirts and free lunches, enticing me to prescribe drugs like Paxil and Lipitor — have higher annual incomes than I do. Many baseball players make more for playing one game than I get per month. I live in a region (the San Francisco Bay Area) where the median price of a house is about $400,000, but I was fortunate enough to buy a nice four-bedroom house in Alameda in early 1997, just before the housing market went berserk. So I’m doing fine.
Doctors who finished their training in recent years are not so lucky. Most of us assume that after we finish our seven or more grueling years of post-college training that we will at least be able to afford to buy a house near where we practice. New physicians in our area cannot do that unless they are already wealthy, which makes recruiting physicians to work in our area only slightly easier than finding a physician willing to move to Nome, Alaska. In November of 2000, I hired a talented young graduate of the UCLA residency program who was engaged to a local pediatrician, but he left us eight months ago, just before his wedding, because Kaiser offered him $25,000 more to work in an urgent-care center. Competing with Kaiser gets tougher every year, and it would not surprise me if those of us in private practice all become Kaiser employees in the next 20 years.
Nurse practitioners (NPs) and physicians’ assistants (PAs) are easier to find than doctors, so we hired an excellent PA after the doctor left us. Most doctors in our area now have at least one of these “midlevel” practitioners working in their offices to offset the shortage of doctors. There are many studies now that verify that patients are usu- ally as satisfied, or sometimes happier, with the care they receive from midlevels than with what they get from doctors. However, midlevels are not doctors, and they therefore add to the workload of their supervising physicians. I can handle over 90 percent of clinical problems without refer- ral or consultation. Midlevels need to consult or refer about one of every five problems they encounter, which means that for every session one of my midlevels works, I get involved twice. So if I am working in the office and two midlevels are working alongside me, I have to do four additional consults during that session, which I have to cram in with everything else I mentioned before. This, plus interruptions by calls from doctors and nurses, is why I am often 45 minutes to an hour behind by the end of one of my sessions.
I don’t usually complain, but when I do, it’s about staff blunders. I get mad when they inform me that I have three 10:45 a.m. patients in the waiting room, two of whom, of course, should not have been given 10:45 appointments but were because the person who made the first two appointments did not finish entering them into the computer, probably because they were rushing to talk to the other three people who were on hold. I scold the staff member who puts a message on my desk from a patient having severe back pain — a message they took after my 2:30 departure on Wednesday afternoon, which means, unless that patient calls again to complain about our slow service, he won’t get a call from me until I return to Berkeley on Friday morning, because I spend Thursday in my Alameda office.
Dirk and his wife were the first (and as of now are still the only) of my patients to devise this clever way to make the best of what our bizarre medical system offers. When they feel the need to see a primary-care physician, they pay to go to the boutique for a calm, leisurely consultation. The boutique doctor will then tell me when they need to get tests done and when they need to see specialists, and I will be the clearinghouse for these referrals and tests. For patients who have capitated (prepaid) insurance plans that pay the primary physi- cian $8 to $12 per month regardless of how often the patient seeks care, we will continue to receive this pay- ment for our services. The noncapitated insurance companies, which pay medical providers on a fee-for-service basis, will not have to pay anyone for primary-care services. So the winners of this little game, as usual, are the insurance companies and the wealthy.
“You are so busy and have so many patients, Jim.” Dirk’s voice resonated with empathy for my plight. “And I know why you’re working so hard. You have a family to support.”
At that point, I felt obli- gated to educate him. I explained that his doctor likely earns more, not less, than I do. “I’ve known you a long time, Dirk, so I have to tell you how this feels,” I confessed.“Getting this letter is like being a public defender and having a mil- lionaire attorney come in and tell you what to do.”
Dirk understood.“After all you’ve done for me, Jim, I at least should have advised you that this is what I was doing. I owe you an apology. I’m sorry.”
“When I picked up the phone to call you,” I confessed, “I had no intention of going along with this. But I understand why you’re doing it, so I’m willing to try it out for a while.” I sent the referral to the gastroenterologist.