First Posted 8/28/2013
I realize that I am halfway through a post called ‘Suboxone Abuse Part I’. This is poor form, but I am now going to get halfway through a second topic before finishing the first one. Sorry.
I recently came across a problem relating to the new healthcare law. I was thinking about writing ‘How the Affordable Care Act Is Killing a Few People’, but I figured that such an inflammatory title would chase away about half of my readership. So I used the title I liked second-best.
I’ll first write about a couple background issues that are obvious to those of us who work in healthcare but less obvious to others. These things are important to know, in order to understand the second post. I won’t try to take one political stand or another, so hopefully the people who reflexively support or bash either side will take a chill pill, tune into the issue, and allow my perspective to filter into their knowledge base.
When I was in med school, I bought a brand new Hyundai for $3900. The car was a ‘loss leader’. Businesses owners use loss leaders to increase buzz about the business or to get people through the door, hoping to make up the loss by selling more profitable merchandise.
You may have noticed the disappearance of private doctor practices over the past 20 years. There are many reasons for the loss of private practices, but from the perspective of an owner of such a practice, a primary reason is because individual doctor visits, especially for primary care, have become loss leaders for healthcare systems. Patients attached to systems through loss leaders– primary care physicians– become sources of profit when they are admitted, have MRI’s or surgeries, or see specialists.
Look at the cost for different types of ‘health care.’ Your insurer pays less than $200 for a doctor to sit with you, 1:1, for 15-30 minutes. That same amount of time in an MRI costs your insurance ten times more, and an hour in the operating room costs $5,000-$20,000.
Health systems negotiate with insurers with an eye on the big picture. An orthopedic injury—say a torn ACL—brings an ER visit, X-rays, MRI, surgery, and physical therapy, with revenues well over $20,000. A patient with heart disease brings in $50,000 or more for EKGs, stress tests, cardiac ultrasound, angiogram, angioplasty, and bypass surgery. Cancer care can top $100,000 when surgeries, radiation therapy, and chemotherapy are included. Even a relatively common injury—lumbar disc herniation– requires MRI, PT, a variety of injections, and laminectomy or spinal fusion, with revenues up to and over $100,000.
While individual doctor visits are more common than heart surgery, the MRI suites and catheterization centers are the profit generators for health systems and the hot topics of insurance negotiations. To the big systems, whether the family practice doc is reimbursed $120 vs. $160 per visit is a minor consideration—just as we are more careful buying a home than a soda. But solo-practice docs must carefully consider the payments for office visits, since they are the ONLY revenue. Independent docs are offered the discounted reimbursements that insurers pay the big healthcare systems, but unlike the systems, small practices have no high-revenue services to subsidize lower-revenue patient visits. With no high-revenue services to subsidize lower-revenue patient visits, independent physicians must be very careful in providing discounts to be part of insurance panels. Some types of payments—the $30 for a 20-30 minute office visit paid by Medicaid—won’t keep the lights on after malpractice, office staff, rent, and utilities are paid.
It is hard to run a business selling only loss leaders. That’s why the Hyundai dealer tried so hard to get me to test drive other cars. It wasn’t until I threatened to make a fuss about ‘bait and switch advertising’ that I was allowed to buy the $3900 car pictured in the newspaper ad. There was no profit in that sale, but the dealer knew that most people would turn away from the unwashed beater and consider other cars on the lot (he didn’t take into account how broke med students are!). Without bigger sales, the business can’t survive.
The second issue I need to cover is the shortage of doctors who prescribe buprenorphine, and the reason that buprenorphine prescribers are more likely to be independent or small-practice physicians.
To prescribe buprenorphine, doctors must take a short course and fill out some paperwork—not a big deal. A bigger deal is that buprenorphine-certified doctors must allow random inspections by the DEA without cause. Doctors who work for health systems get a paycheck each week, often regardless of the number of patient visits. For an employed doctor, does it make sense to take an extra course, file extra paperwork, and agree to random inspections, in order to see more people but for the same pay?
Patients in need of buprenorphine treatment have usually lost a great deal due to their addictions, and are not great ‘sources of revenue.’ I suspect that my own enjoyment treating addiction comes in part from my personal experiences ‘in the field’. Beyond that type of interest, young doctors do not leave residency eager to take on patients who have been dishonest with other doctors, who early in treatment appear a bit ‘rougher’ than their other patients, and who have no disposable income!
The two issues must be understood and combined, in order to understanding the second half of the story (that I will get to eventually…). In review, the first point is that individual medical practices are disappearing because of a flawed business model. Fees charged for individual appointments are far lower than revenues from tests, procedures, and surgeries. Large systems can subsidize doctor visits with revenue from MRIs and surgery centers. Doctor visits are ‘loss leaders’ for more profitable services. One cannot make a ‘business’ from loss leaders, without the second half of the equation.
And second, doctors who prescribe buprenorphine are more likely to be independent practitioners with their own businesses. Another way to say it is that doctors who are employees of health care systems are less likely to obtain certification to prescribe buprenorphine. The extra patients that comes with buprenorphine certification cause more paperwork and more regulation, without an increase in pay. Beyond personal motivations, doctors have no incentive to treat addiction; in fact there are significant disincentives to becoming buprenorphine-certified.
Put the two together, and you have more and more communities where several large systems compete for patients, and nobody prescribes buprenorphine except for the one or two independent practices that haven’t closed yet.
First Posted 8/28/2013