Newspaper article THE JOURNAL RECORD

Commentary: Office Visit: Reform Brings Payment Changes

Newspaper article THE JOURNAL RECORD

Commentary: Office Visit: Reform Brings Payment Changes

Article excerpt

In graduate school, my health economics professor often used the maxim that "in health care what gets paid for gets done." In other words, medicine is often driven by what reimbursement standards exist in any particular community.

Historically, insurance companies have had the luxury of being agnostic on most treatment decisions made by physicians. Because of relatively little underwriting risk, insurance companies have had small incentive to identify clinical decisions that have marginal or no scientific evidence to support them. Health insurers could simply pass the cost of this year's expensive (and perhaps unproven therapy) into next year's premium base. There was scant regulation that prevented it and the market was clearly not price sensitive enough to control premium inflation.

Under health reform, the game changes. There will be limitations on how much of the premium dollar can be devoted to overhead and profit. It is clear that state insurance commissioners and even the federal government will challenge any attempt by carriers to announce significant premium growth. Additionally, carriers historically have not had to pursue claims adjudication with any great sense of urgency. Yes, there were occasional media stories that often led to works of fiction about greedy health insurance companies taking advantage of sick patients and courageous physicians; and yes, insurance companies would often delay payment to doctors and hospitals while they dithered around asking for increasing amounts of patient data. These delay tactics irritated providers who felt they were simply clever devices to enhance the value of the insurers' investment portfolios at the expense of the caregivers' cash flow. However, in the grand scheme the arrangement between carriers and providers worked relatively well for all concerned. The doctors and hospitals were paid regularly, the insurers assumed relatively little risk, and the patient for the most part had relatively all of their bills paid. …

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