I read this really cool opinion sent in by a physician to Medical Economics.   I had never thought about it buy he is 100% on the money:

Reimbursement is wrong term

Let’s stop using the term reimbursement. It is jargon promulgated by the payers. Why do we use this terminology when it’s clearly designed to favorably look upon them? “Oh, those doctors are getting reimbursed, how nice.” We should take reimbursement out of our vocabulary.

No other business would accept 60 cents on the dollar as “reimbursement.” Try paying $60 for a $100 meal and see where it gets you. No one reimburses a restaurant for dinner.

If I borrowed your car and used a tank of your gas, I’d have to pay you $4 a gallon for the gas I used. That’s reimbursing you. If I paid you $3 a gallon for gas that cost you $4, you wouldn’t let me borrow your car again.

Call it what it is: underpayment for services provided. It’s not reimbursement or negotiated rates (especially when one side doesn’t get to negotiate). Allowing payers to use this ridiculous term as if they are just paying us back for what they borrowed is disingenuous.

Carmel, New York

Go Adam!!

Douglas Farrago MD

Douglas Farrago MD is a full-time practicing family doc in Forest, Va. He started Forest Direct Primary Care where he takes no insurance and bills patients a monthly fee. He is board certified in the specialty of Family Practice. He is the inventor of a product called the Knee Saver which is currently in the Baseball Hall of Fame. The Knee Saver and its knock-offs are worn by many major league baseball catchers. He is also the inventor of the CryoHelmet used by athletes for head injuries as well as migraine sufferers. Dr. Farrago is the author of four books, two of which are the top two most popular DPC books. From 2001 – 2011, Dr. Farrago was the editor and creator of the Placebo Journal which ran for 10 full years. Described as the Mad Magazine for doctors, he and the Placebo Journal were featured in the Washington Post, US News and World Report, the AP, and the NY Times. Dr. Farrago is also the editor of the blog Authentic Medicine which was born out of concern about where the direction of healthcare is heading and the belief that the wrong people are in charge. This blog has been going daily for more than 15 years Article about Dr. Farrago in Doximity Email Dr. Farrago – [email protected]

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11 Responses

  1. This is now a policy of MedChi, the Maryland State Medical Society. We are actively promoting this term, and correcting legislators when they use the archaic phrase, “reimbursement”….

  2. T Newberry says:

    Which leads us to the simplest solution to the health care mess in this country. Do not try to micromanage with regulations. Instead make one broad rule and enforce it relentlessly. Let the market figure out to do things efficiently.

    The simple rule: NO THIRD PARTY PAYMENTS.

    Patients pay and then THEY get reimbursed by insurance. Right now, the consumers of health care services are not really involved in the conversation about its costs. In what other industry is that true?

    • Doug Farrago says:

      That is why I believe cash paying practices are the answer for everyone. I agree

      • Denise says:

        And are you prepared to have patients calling your office comparison shopping your prices, and wanting to negotiate with you about each service?

        • Doug Farrago says:

          Yes. But only if there was no third party. That is why I think concierge medicine with monthly membership removes all that.

  3. Moss Bliss says:

    True, no restaurant ever accepted 60% of the check as “reimbursement”. But no restaurant ever boosted the charges to what Insurance would pay rather than what it was costing them (plus profit), and offered a discount to cash customers. You need to see the whole picture here.

    • Doug Farrago says:

      Boost charges to what insurances would pay? Moss, way off on that one. Doctors are told what they can bill by insurers and Medicare. Self pay needs to be discounted because they truly get screwed. If they luckily get a discount it is to the level of what the insurers are paying. You have missed the picture totally.

      • T Newberry says:

        Doug, I have to disagree with you here. Moss is technically correct, although s/he seems to be laying the blame at the doctors’ feet, which is unfair. Doctors are told the MAXIMUM they can bill. Then they always bill the maximum, regardless of what their costs are. But they HAVE to do this in order to play the 60% reimbursement game. The billings and the reimbursement have only a tenuous connection to the actual cost of service. So ironic that the two parties actually involved in the transaction have the least control over it.

  4. Pat says:

    Dr Whitehead is dead-on right.

    This has happened because patients have not been viewed, in the best sense, as customers. When value is traded for value, then both sides command respect, as in any honest capitalist transaction (redundancy noted). “Reimbursement” is the rhetorical derivative of health care being viewed as a right, meaning that the provider of that right is by definition under obligation; and therefore, not deserving the same regard as an honest purveyor of goods or services.

    U.S. physicians that have spent decades making health care a “right” through ignorance, laziness, dishonesty, or greed (financial and emotional) now deserve to be thusly reimbursed.

    • FedUp says:

      I agree with you Pat, except that I think it is the GOVERNMENT through all its entitlement programs, not doctors, that has tried to make health care a right, which it is not. As I pointed out on the other thread–health care as a right is an inherently flawed argument. Legitimate rights have one thing in common: they are RIGHTS TO ACTION, NOT to rewards from the labors of other people. In the U.S. you have the right to work for what you want—NOT to be given it without effort from somebody else. You have no right to the actions or products of others, except on terms to which both parties voluntarily agree. But I think Obama and team have a different idea in mind. These entitlements exist, Obama et al say, simply because you want or need it….you are entitled to be given it by the government. Like I said before: think about this: WHERE does the government get it from? What does the government have to do to private citizens and doctors, to our real and individual rights, in order to carry out this showering of free services on the people? The answer: these newly defined “rights” wipe out real rights, and turn the people who actually create the goods and services involved into servants of the state. I firmly believe that any mandatory and comprehensive plan will finish off quality medicine in this country, because it will finish off the medical profession as we know it and drive away those who went into medicine with a different idea of what it would be like.

      • Pat Conrad says:

        Damn right Fed, you are 100% correct. But it was PHYSICIANS who allowed the passage of Medicare/Medicaid in the 1960’s; WE started taking the gov’t cash rather than rebelling on the spot; WE told ourselves that we were doing right by the elderly and poor, never considering too closely that it was on someone else’s dime. It was and remains the AMA that supports these programs, and which has given cover to Obamacare, along with the idiot academicians and too many liberal colleagues. Our profession is culpable in this disaster even as we are also it’s victims.

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