Dr. Brian Sweeney, Sr. was in private practice in Southern California for 16 years. He started out in Chula Vista south of San Diego. Managed care drove reimbursement to levels that made running a business difficult so he moved to Temecula in southern Riverside County.
Managed care eventually caught up with the elder Sweeney. The breaking point came when a judge ruled that physicians had to keep seeing patients for free when a local health care maintenace organization had run out of money and was not paying. Free may be the wrong word since there is an inherent cost to running a practice.
He eventually packed up his bags and made the move to Anchorage.
The pendulum swung easily in California. Managed care was able to gain a hold because there are many physicians and providers competing for patients. It leads to organizations willing to cut a deal to get patients. It also led to all kinds of sub-contracting. It is an ever shrinking pie with smaller pieces available to caregivers.
The results can be ugly. Colleagues of mine in the lower 48 often spend long days performing endoscopies and very little time seeing patients in the office. Clinics are often being staffed by nurse practitioners and physician assistants. Is that reasonable? A question for another day.
The answer to cuts in reimbursement is to do more or code higher. That only works if services are not somehow capitated. The other answer is to add ancillary services. Large groups are consolidated and imaging modalities, labs, surgery centers, and any other money making ventures are added.
Alaska has been a far different story. In Anchorage there are two private hospitals. And one is significantly larger than the other one. There are some specialties where there are nowhere near enough providers for the population. The sitiuation is even worse in the smaller cities and communities. It is not a good set up for microeconomic principles to kick in.
The lack of options has set up a system where basically charges remain high. It may seem like a completely bad thing but the California model which has spread across the country is not a good answer either. Neither system controls costs.
Alaska faces other difficulties. People here may love it and think everybody wants to live here but it is not the case. I have been trying to get a permanent partner now for over a year and location is the biggest obstacle. That is despite higher physician reimbursement.
The cost of care is reaching a critical point. It is why insurers are now looking for options outside of the state. The savings on procedures when you combine physician, facility, and pathology fees can be significant.
The pathology costs at one local hospital often run higher than the physician fee for the endoscopy that produced the specimen. I have cringed seeing a bill a few times. At another local hospital, since hospitals can charge for equipment, a patient is charged 2.5 times the cost of the piece or at least this is what I was told by an endoscopy nurse. And the Millman study shows how different the physician costs can be. I cringe at my schedule at times but it was based on a theory brought up from California by my former partner that you increase until they stop allowing it. A pitfall of fee for service medicine which into Alaska has fallen.
Sweeney, Sr. can tell tales of not being able to freely use equipment because of low reimbursement rates and hospital concerns. It can also lead to lower quality equipment being used. It is a two edged sword when a deal is cut between insurer and hospital.
Jeff Sweeney, MD, my brother and a family practitioner, was a member of a large multi-specialty group in Texas that suffered major financial problems from managed care. It eventually led to his salary dwindling down to that of close to a school teacher. In order to survive he paid a lare sum to get out of a non-compete clause and now works for a hospital. The wife of my fellowship program director was an internist who met a similar fate in a different area of Texas.
The move towards hospital owned clinics was the subject of a recent Wall Street Journal article. It turns out it leads to higher costs for insurers including Medicaid. A wise old Cardiologist in town used to warn physicians of a day when the hospital's name would be at the top of the paycheck.
One thing that gets overlooked in the health care bill is the way it aims to bundle services. At the top of the food chain in that process is often the hospitals. Hospitals around the country have been looking to buy up clinics and outpatient ancillary services to build Accountable Care Organizations. Does it matter that it does not work even in heavily controlled environments with motivated participants?
I complained about fee schedules and costs to patients a lot to Sweeney, Sr. He often responded with the horrible tales of California.He lived in a world where a judge forced physicians to pay to work. In Alaska, the choice to work for free or not is up to the physician.
Physicians are often made out to be the bad guys. That is even true in the ADN article about people going elsewhere. Local hospitals are given a pass. Hospitals up here make considerably more money than lin the lower 48.
It does not help that physicians did not want to talk about it. And a softball general comment from a hospital that it is always best to get care close to home is not going to advance the debate.
It is a problem. Health care costs are too high in Alaska. So are the costs of all kinds of professional services. I routinely pay more what I did for services than I did when I lived in San Anotonio. Health care is so expensive to begin with that the numbers become crippling. This should however serve as an opportunity for everyone making more money up here to look at themselves as well.
Physicians up here have no desire to be in a lower 48 situation. It is why many of them moved up here. It is why many of them will be upset that I dared speak the words that the situation exists.
How does it get fixed? Well this is where the system needs to start looking at itself. If it does not repair from inside than external forces will act as they have elsewhere. The solution may not be to anybody's liking.
Think it is hard to get physicians up here now? Work them to the bone and pay them like they do in the lower 48 and the task will get even harder.
I have some ideas on how to make it happen. They are ideas that would likely lead to rotten fruit being launched at me from all sides in the medical community except possibly the people trying to desperately lower the costs. That is why I am going to hold off on putting forth those ideas for now. So what would you do?