healthinsurance

Independent Medicine to the Rescue – Transparency Reveals Hospital Fee Bubble

June 17, 2016 Posted by David Branch - No Comments

As one of the few remaining independent physicians in the Bangor area, I was particularly interested in The Maine Heritage Policy Center’s recent publication on the wide disparity in the costs of healthcare seen on WLBZ in April.

I wanted to offer some perspective on why this is and on how the average Mainer can better avoid unjustified costs. The significant and sometimes ridiculous difference in costs between the large tax-exempt hospital setting and smaller independent facilities has been growing over the last two decades, to which I refer as the “hospital billing dark ages.”

These “dark ages” are fortunately ending as new transparency mandates shed light on what hospitals and insurance companies have been up to behind closed doors and what effect this unregulated parlay has had on healthcare delivery as well as on the health of Maine’s, and our nation’s, shrinking tax base.

Normally when the government allows two parties to play with tax-free dollars, it presumes the two have incentive to negotiate responsibly. Unfortunately, during the “dark ages,” no one was watching and few considered the fact that a health insurance company onlyincreases its profit by increasing its premiums. This yearly increase in premiums is allowed only if last year’s costs are, yet again, higher.

This is an economic pressure, which the tax-exempt hospitals are only too happy to fortify with, elevated bills for care that can be done at a fraction of the cost at a smaller independent facility. Unfortunately, there are few of these independent facilities and practices that have survived in Maine when the public and major self-insured employers may now be able to appreciate their value.

Some of the nation’s major employers, such as Delta Airlines, have recently recognized the savings and quality that is found with independent free-standing facilities. Recently, Delta mandated that all employees seek outpatient care and imaging from an independent facility or be faced with a fine on top of the clearly higher costs of care. They recognize the fact that “facility” charges for employed physicians are tacked onto every outpatient visit, effectively doubling the cost of care compared to independent medicine where facility charges are not allowed when seeing your doctor.

So, why is it that this spiraling process has been allowed to exist for so long? It would seem there has been a nationwide campaign to convince the public that healthcare costs are always going to be spiraling out of control because of technological advances. Examples such as robotics and lasers are invoked as logical explanations for this dogma.

The reality is that these technologies exist because of a cost benefit. Robotic surgery allows for complex surgeries to be done with far fewer days in the hospital and with far less complex care after surgery.

Consider gallbladder removals, now typically done laparoscopically as an outpatient procedure when 20-30 years ago there was a large, painful incision, a possible ICU stay and an expensive week in the hospital for recovery.

The reality is that the diseases and ailments that befall the American public from year to year do not change appreciably any more than does the frequency of home disasters or automobile accidents for which we never renegotiate our insurance premiums. Actuarial graphs of the American public’s mortality and morbidity are flat line, yet we are forced to renegotiate our health insurance on a yearly basis.

This is because we were misled during the “dark ages” to believe that the costs of care are always on the rise, and that instantly doubling the cost by employing a physician at a hospital somehow increased the amount or quality of care.

The game has changed, thanks to calls for more transparency from organizations such as The Maine Heritage Policy Center. The patterns are clear and independent medicine is on the rise nationally as organizations such as the Association of Independent Doctors (A.I.D.) have formed to help save what was the world’s best healthcare system from what is now a consolidated healthcare business industry which is,or was, poised to bankrupt our aging nation.

If this sounds like fear-mongering, then consider the economic implications of the disparity of costs for just one out-patient surgery, carpal tunnel surgery. If all carpal tunnel surgeries in 2016 were done at one of our great state’s large self-referring consolidated tax-exempt hospitals, such as EMMC, it would cost the state an extra $9.4 million above what it would cost at a local independent facility. Multiply this cost by the hundreds, if not thousands, of other types of outpatient procedures, and it becomes apparent where Maine’s property tax relief can be found and why our biggest industry and biggest employer is healthcare.

So what can we do to stem the tide?

  • Be better consumers. Go to www.comparemaine.org to see the growing list of costs. Enjoy the new transparency and the savings.
  • Go to, if not join, The Association of Independent Doctors where there is a complete list of independent physicians in Maine. Finally, there is real representation for physicians.
  • Do not be sheep. The self-referring hospital systems will make you think you have no choice but to go to the employed physician where job satisfaction is a dismal 10%, infection rates are often higher and “facility fees” double the cost of your care with no benefit.

Physicians must realize that the game has changed. Insurance companies, who are accountable to the premium payers, are ripe to negotiate sustainable rates for physician services.

They must take advantage of the now known savings and better outcomes found in independent medicine, regardless of how much they enjoyed the predictably high cost of care and the premium escalation afforded by the tax-exempt hospital where administrator salaries are often 20 to 30 times the average Maine wage.

Dr. David Branch is a plastic and hand microsurgeon in the Bangor area who has been in practice for 16 years. Dr. Branch is Maine’s founding member of the Association of Independent Doctors and has sat on their executive committee since 2014.