Golden Rule of Reimbursements

There are grumblings in Vermont about the disparity of payment to independent doctors versus hospital based doctors:

In 2015, commercial insurance companies reimbursed independent doctors about $100 for a typical primary care visit and paid academic medical centers $168 for that same service, according to data the Green Mountain Care Board’s staff presented at the meeting.

That’s a 68% pay raise, most of which goes to the hospitals, by the way.  The brilliant cracker jacks on the Green Mountain Care Board are trying to figure a way to fix this.  Their only answer is either to strong arm the hospitals via the budget process or make everyone join their “all-payer” model.  As one member said:

“In a perfect world we would let the all-payer model solve this problem.”

Are you kidding me?

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The hospitals rule because they have the power.  The medical golden rule is that those who have the gold make the reimbursement rules. And the hospitals have the gold. Independent doctors who continue to compete with this will always lose.  In a perfect world, we need to leave the insurers behind and do direct primary care and NOT an all-payer model, which is more of the same.

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] 

  4 comments for “Golden Rule of Reimbursements

  1. Randy
    September 5, 2017 at 12:54 pm

    It’s not clear from the article whether the different is the hospital facility fee, but it sounds like it. The facility fee is a huge boondoggle. I talked to a hospital administrator about it, and basically he said regardless of whether it was right or wrong it is the law and the hospital will take advantage of it.

  2. RSW
    September 5, 2017 at 12:10 pm

    How about a return to balance billing? The insurer says we’re going to pay X for this service, regardless of who provides it. The patient pays the difference. That would definitely put some market pressure on the academics to lower their charges.

  3. Perry
    September 5, 2017 at 8:16 am

    C’mon guys, these hospital administrators need their golden parachutes…

  4. September 5, 2017 at 7:29 am

    And, lest anyone worry, this applies across the board, in all specialties. Therefore the problem, dollarwise, is exacerbated.

    Spot on, Doug!

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