By Don Stevens

Complex problems rarely can be attributed to single factors, particularly health care. After reading Marcy Stamper’s article on the shrinking insurance options in Okanogan County (Sept. 19), I found it astounding that Jeff Lindstrom, a principal broker with Health Insurance Team of Seattle, made the following statement: “It’s cost. Doctors are not willing to lower their fee schedules.”

He is absolutely correct that health care inflation is a primary driver regarding shrinking insurance options, and absolutely wrong regarding physician fee schedules as the factor underpinning health care costs, heath insurance access, and inflation in health care. I might add that shrinking insurance options is not a rural problem, but a nationwide problem. 

Physicians do have a responsibility to use evidence and best practices to bring value and the best outcomes to our patients.  In that sense we do impact expenditures, but this is not the same as pricing, or fees. The vast majority (71 percent) of health care transactions by type are incurred through health insurance contracts. Physician fees and clinical services account for 20 percent of health care expenditures. Pricing for services is set by the insurance contract, not the provider fee schedule, and those contracts are very much driven by the insurance industry. Blaming runaway costs in health care solely due to physician fee schedules is simply not supported by the data.

Twenty-year annualized inflation has grown at 2.7 percent percent. Health care inflation for the same period has grown at 3.9 percent. Why is that?  Since 1950, health care pricing shifted from a patient/provider transaction, to payments mediated by the insurance industry. Similarly, there has been an explosion in medical knowledge and technology as health care evolved as a for profit business.

Manipulated market

In place of a free market, we now have a manipulated market which erodes every health care dollar through inflated margins, overhead, administrative and drug costs. The health care lobby has influenced regulations and price structures for both services, drugs and insurance premiums, which has grown our current expenditure on health care to 18 percent of GDP, and this is projected to reach 20 percent by 2025. These non-care expenses consume 30 percent of every health care dollar — 30 percent of every health care dollar going into industry pockets when the rest of the first world spends 10-12 percent with similar outcomes.

The Affordable Care Act (ACA) has given the illusion of health care access, while reality is the consumer is struggling with the cost of insurance premiums, copays, out-of-pocket costs and shrinking provider networks. Under the ACA coupled with the expansion of Medicaid, patients are finding many providers are excluded from insurance contracts. Subsidized premiums have not offset high deductibles coupled with balance billing, both of which impede access. Cost shifting through tax credits and the expansion of Medicaid are passed on to the consumer through additional taxes, exploding health insurance premiums and inflated hospital charges.

Providers struggle with regulations directed at pay for performance, electronic medical records and claim denials by insurers. Only 25 percent of physicians’ time is spent in direct patient contact. Forty percent of physicians across all specialties contemplate career changes. The result is reduced access through attrition of providers leaving medicine.

Fewer independents

Independent practices are not sustainable resulting in consolidation of physicians’ services under the umbrella of large integrated health care systems. Those systems which are largely hospital-based, will choose which markets to continue operating in, and it won’t be those which are marginal now. Fewer remaining independent physicians will reach compliance under industry and federal regulations. To avoid economic and regulatory penalties, many small practice providers (who are more likely to have rural practices) will opt out of both CMS/Medicaid, and third-party insurer contracts. As a patient, it won’t matter that you have an insurance card in your wallet — there is an ever greater chance you won’t find a provider who is able to care for you due to closed panels, even if they are enrolled as a contracted provider. As a consumer the care you access will be out of network, and your first dollar responsibility will be crushing.

Health care financing and delivery is the emperor who has no clothes. We need to stop playing dumb to the reality that we have so much resource, and use it so poorly. The business of health care pretends we are moving in a positive, patient-centric, and well-planned direction. When confronted with failure there is always a scapegoat to blame. I suggest “fee schedules” is one that shouldn’t be trotted out again.

Don Stevens is a semi-retired physician whose background is in primary care internal medicine. He splits his time between Twisp and Indianola.