Hospital-Centric Healthcare

Bamboozled Over the “Cure” for Balance Billing

September 7, 2015

I just read an article on Modern Healthcare’s website about balance billing in the out-of-network context. You know, like in the situation faced by Ms. Smith when she has a hip replacement at an in-network hospital by an in-network surgeon and then gets a bill for a zillion dollars from Dr. Cutterette, the out-of-network assistant surgeon, or from Dr. Quincy, the out-of-network pathologist.

The author of that piece suggests that the solution to the balance billing “problem” is to make a bundled payment to the hospital for all services in respect of the incident of care. After all, the hospital would just parcel money out to the surgeon, the assistant, and the pathologist. Problem solved!

Hmm. Problem solved for whom? Let’s test his hypothesis with the following thought experiment.

For the next year, all ad revenue from healthcare related websites will be paid over to, say, me, as the owner of the Wisdom. Applied. Blog. I’ll parcel a bunch of it out to the owner of the brilliantly written Wisdom. Applied. Blog, and some to, well, what are they called? Oh, yes, I’ll have to give something to Modern Healthcare so that they can pay for articles like the one cited above. Would Modern Healthcare and its author be satisfied with the .0000005 cents per word that I think they are “worth” (after all, this is a “value-based” payment in perverse healthcare speak)? Hardly.

All the crap written and all the crap legislated (Stark, anyone?) about conflicts of interest is tossed out of the window by “solutions” such as this.

The fact is that the farther we get away from market based concepts, the more the political hacks masquerading as economists screw with market balance, the more it’s obvious that there are no mandated or political solutions. There are only mandated or political tradeoffs.

Of course, I understand that Ms. Smith is shocked when she gets a bill for a zillion dollars from a physician she didn’t “ask for” or from one that she assumed was in-network. But will she understand when there’s no physician willing to work for what the hospital will pay?

In the short term, the cram down of bundled payments to the hospital for it to parcel out is fine for getting votes and it’s fine for those on the politically favored side. But in the only slightly longer term, it’s simply an accelerant poured on the fires of refusals to provide care, refusals to contract without stipend support, and of the movement of procedures out of the hospital setting.

Comment or contact me if you’d like to discuss this post.

Mark F. Weiss

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