I used to work for the Blue Cross & Blue Shield Association over a decade ago, and we were working on trying to improve cost and quality of care transparency for patients back then to improve their ability to make informed decisions about where to seek healthcare. Consolidation dramatically threatens this (and it doesn't seem like much progress has been made on that front anyway). I do appreciate your sharing this side of the equation. Covering "frequent fliers" (the small share of patients who account for most costs) so that they aren't bankrupted is, in some ways, the reason for insurance to exist. They also, however, impose costs on the entire system. The industry is rife with agent problems. You know your health better than your insurers do, but (likely) lack the expertise to push back on a doctor recommending unnecessary tests or more expensive pharmaceuticals when generics are available. Insurers can (and should) try to push back on suspected incidents of such misbehavior, but when they get it wrong, if the provider proceeds to bill the patient, (as many do, maybe not in this particular instance, but in others, saying "your insurance wouldn't cover this part, here's what you owe") you have (sympathetic) sick people who trust their doctor's (seemingly) individualized recommendations over the insurer's statistical averages. Big data-enabled analyses might help both doctors and insurers more consistently deliver evidence-based standards of care, but we're not there yet. Lastly, it's worth noting that while new medical innovations needn't necessarily increase overall costs (pre-emptive heart medication could reduce expensive ER visits and bypass surgeries, better scanning/prediction could reduce unnecessary operations), in many instances reductions in mortality will push costs up, allowing sick people to survive while continuing to consume expensive treatments. There are no easy answers here.
Jacob, I don't know what to say here other than that erudite and eloquent comments like this one (and a few others on this post in particular) have been the greatest perk of having this newsletter. Your points made an impression on me, and I hope others will read them. (I know there are readers who go through the comments, in fact, so really appreciate you taking the time to leave this comment.)
Easiest answer is a medicare for all, or single-payor system. Making US pretty much like the rest of the civilized world (32 of the top 33 economies have some form of universal health insurance, is a better way to put it, but has less punch), who have less expensive care (and oft longer lives).
While it may not seem terribly easy to take money from health services millionaires & billionaires (it is on the order of taking candy from a baby - who can afford lawfare), but it still is the easiest way - much easier than keeping all the redundant administrative middlemen and STILL, somehow, reducing costs.
Surgeons determine the length of a procedure, not the anesthesiologist. I agree that if the goal is to fight fraud there are much better ways to do that than using undefined Medicare data. No way to know how that was calculated (that I can find anywhere). Would also note that downplaying the significance of this by noting providers can “appeal denied claims” is a bit maddening. The proportion of claims that have to be appealed continues to increase, adding further administrative overhead for providers to get paid at all.
I hear you, Jordan. If paperworking people to death is supposed to be the strategy for cost containment, well...I think Ashley was being diplomatic when she said that Anthem was trying to contain costs but whether this policy was the best way to do it is "debatable." I do, though, think it gets at the difficult of managing costs in an interesting way, and I hadn't thought about some of what they shared. It feels to me like we get the administrative burden of a complicated, many-player system and yet we don't get most of the market benefits of a many-player system, so we're in this kind of maddening middle ground. In any case, thanks for reading, and I appreciate your comment.
Appreciate the kind words and your long-time readership! ...I know I have a fair number of readers in healthcare, so I'm always a little nervous about healthcare posts, but I felt challenged by this perspective, so thought it was worth sharing, even while I know there's a lot more to all this.
Agree. We have neither the efficiency of a true marketplace, nor the efficiency of single payor. Hillary lost her Presidential race not because of a 'basket of deplorables' comment, nor because her private email server was any more private than Colin Powell's, nor because she failed to visit Wisconsin - those these things add up, but the race was lost long before.
The real reason she didn't handily beat Trump, (she was the MOST qualified candidate in a generation), is that as a WIFE of a president, she successfully took on the healthcare industry collusion and shady insurers and billers, via the HIPAA act in 1996, forcing the industry for the first time to offer a couple apples to apples policies so that they would have to compete on prices head to head, which provided for the first time a way for a family health dollar decision-maker to evaluate the better policy on merits.
Prior to HIPAA, it was impossible for even a Harvard-trained statistician and medical doctor to rationally compare the expected value of alternative health insurance policies, in terms of: which one would be less costly, given an uncertain distribution of future family health events. I make this claim as a medical doctor with two Harvard post docs in public health and statistics... it was impossible to make a rational choice between policies for me, prior to HIPAA, and the subsequent Healthcare Marketplace.
Hillary's insight was that by requiring all insurers to include, in addition to all their other custom mixes of incomparable benefits and copays and sliding scales and exceptions, etc, two policies that had to always include the same sufficient standard set of basic health services, and that this would force the insurers to compete on price for these two policies - since there would be NO other differentiator between insurers.
In short, Hillary started the process (which she negotiated with Obama to continue, and it was later called Obamacare or ACA) of introducing some very basic competition and sunlight (aka The Healthcare Marketplace) into the lives of insurance co.s (and providers), and the industry hated her for it, and perhaps spent billions over the next 20 years to assure she never got the top job. Trump himself made over 400 efforts to kill it (by someone's count I saw the other day; sorry, don't have the citation - maybe Raskin or Sanders), but failed. It was so clearly effective and so clearly a benefit to ~40M Americans, it couldn't be killed.
The corrupt US healthcare industry was a well chosen enemy, but turned out it was even bigger than a brilliant first lady with outstanding presidential qualifications.
David, this is an interesting conversation, and I'm pleased that these topics are being discussed more broadly among groups outside of healthcare. However, there is some nuance that is missing from the anesthesia billing and reimbursement discussion that is pertinent. For some background, I am an anesthesiologist who works in a relatively small private practice in Missouri, one of the states targeted by the proposed Anthem policy. Interestingly, Don Arnold, MD is the current president of the American Society of Anesthesiologists, and he is also part of a private practice group here in Missouri.
There are a few points that I'd like to highlight. First, Medicare reimbursement for anesthesia services are so low that they are not adequate to sustain an anesthesia practice. Without significant additional financial support from the facilities in which they work, anesthesia groups cannot be viable. There is no other aspect of healthcare that is reimbursed so poorly by Medicare. Rather than suggesting the private insurance reimbursement rates move down toward Medicare rates, the discussion should be surrounding increasing Medicare rates so that anesthesia practices rely less heavily on privately insured patients to sustain themselves.
Second, as there is more and more downward pressure on private practice physician groups, an increasing percentage of physicians are employed by hospital systems. As alluded to in the article, these hospital systems drive up costs not only by charging facility fees where they were not previously charged, but also by becoming bigger and better negotiators with private insurance companies. The bigger the healthcare system the better their contracts and more expensive the care is at their facilities. Why not support smaller private physician practices? They generally provide more cost effective care than the larger systems.
Finally, anesthesiologists are paid well, and have had a jump in their salary recently. A major driver of this is a severe shortage of anesthesia providers. It is definitely not an increase in reimbursement from insurance companies. This extra compensation has come from hospital systems that are having to subsidize their anesthesia providers in order to keep them in a highly competitive market.
Sorry for the extended comment and thanks for the thought provoking discussion.
Colby, I can't believe you'd apologize for this comment...possibly my favorite thing about having this newsletter at all is that I can just toss some thoughts out and get eloquent and enlightening comments like this one. Pretty much everything in the conversation above was new to me, as is most of your comment here, so I'm glad to be learning. The comments on this post are making me wonder if perhaps I should try, for the first time, to just do a post sharing some illuminating comments on a previous post. In any case, this is just to say that I'm grateful you took the time to write this so that I and anyone who peruses comments can learn from it. As an aside, I'd be very interested to hear your thoughts on any of the causes, and perhaps remedies, of the shortage of anesthesia providers. That's definitely troubling. Anyway, mostly just wanted to thank you for taking time to share your experience at wisdom at length here, and your points will now be part of this conversation any time I have it.
Thanks David. The shortage of anesthesia providers is multifaceted, I think and there is a bit of anesthesia lore involved. The Wall Street Journal published an article in 1995 that caused a lot of fear among physician trainees about the future of anesthesiology (Anders G: Once a hot specialty, anesthesiology cools as insurers scale back. Wall Street Journal, March 17, 1995). This led to a paucity of anesthesiologists entering the workforce approximately a decade later. It turns out that many of these fears were unfounded and the specialty has since regained its popularity among trainees. However, there is currently a bimodal distribution in the age of the anesthesia workforce. >50% of anesthesiologists are currently over the age of 55! As large numbers of them reach retirement age, the shortage in the 45-55 age group becomes evident.
Additionally, procedures are a very important revenue source for healthcare systems. As many of them struggle financially, they try to drive procedural volume up. So the demand for anesthesia services is higher than it has been historically.
On top of this, COVID was very hard on healthcare providers but especially anesthesia practices. Elective surgeries were cancelled, essentially cutting off a majority of revenue for several months. Anesthesiologists were asked to work in the ICU and on special teams to place breathing tubes in COVID patients. This rather high risk work accelerated the retirement of many providers nearing the end of their career.
As far as remedies, in general we're not very good at predicting the future, but it seems like there should be some technological innovation that will alleviate some of the shortage. Perhaps there will be AI applications that will allow a single provider to monitor multiple operating rooms at a time. Or that will be able to manage the anesthetic so that a less skilled provider will be needed in the actual operating room. I'm not sure how far away solutions like these might be. The increased salaries will help as well. Although this will take some time to bear fruit as it takes several years of training before new providers enter the workforce. Anesthesiology is currently a popular choice among medical trainees, and all of the available training slots are typically filled each year.
I'm involved in a small non-profit organization that runs a self-funded health insurance program. The big costs to the program are driven by 15% of the participants (most of those we cover are between 25-39 years of age, and almost 70% don't file a single claim in a given calendar year). Premature births are the biggest cost to the program on the medical side with specialty pharmaceuticals on the drug side. Anyone writing about the insurance industry should spend some time running such a program and you will quickly see how difficult it can be to manage costs.
Alan, really appreciate this comment, and that's really interesting about the age range. My recollection is that, in healthcare in general, a huge portion of costs accrue to people in the last six months of life. It's interesting how much of this — both paying for care and trying to rein in those who overcharge — seems to involve a small number of players. I don't know if that makes it harder or easier to change, honestly; I could tell myself a convincing story either way. For speciality pharmaceuticals, I know providers are paid a percentage of the cost of the drugs they administer, and I'm guessing that will change at some point. In any case, I really appreciate your points. I have more questions than answers about all this (in fact, I have no answers), but I'd love to hear more of your thoughts on managing costs if you have the time and inclination to share.
This perspective assumes a LOT of goodwill from insurers, hospitals and doctors, the former two are not known for their goodwill towards patients. The idea that care will not suffer due to doctors trying to hit anesthesia time targets seems facetious. The idea that premiums would fall due to the savings from this glorious measure seems like an outright lie coming from someone who claims to understand the industry. Insurers deny claims and implement measures that harm care and we do not see our premiums dropping, ever. Just stop. I really don't believe doctors are twiddling their thumbs and wasting time while patients are under anesthesia, I'd rather a surgeon feel at ease to do what is necessary without an added time constraint, which could end up costing a patient more if there is a complication.
Hi HP, appreciate this comment. I think the incentive for insurers to lower premiums isn't goodwill, but rather to compete for customers (i.e. employers shopping for plans for their employees). But your point is well taken. In any case, it seems to me that part of the problem is we have neither a functioning market nor a single-payer system. There are some issues for which I think if we swung hard one way or the other, we might be better off, and perhaps this is one of those. In any case, I felt like Preston and Ashley were getting at the difficulty of reining in the small number of "up-coders," and it was a valuable perspective for me and one I hadn't thought about.
I know, right? Wouldn’t it be reassuring to know that if your surgeon didn’t make a time cut on your surgery their employer would suffer a profit loss? What could go wrong?
Really appreciate the kind words, Rachel. I know we can't cover every angle of healthcare in a post like this, but it seemed to me like a worthy perspective that challenged my intuition. That said, I figured it wouldn't be a super popular take, which might explain why it isn't discussed a lot in mainstream outlets.
Thanks for this. I'm an emergency physician and medical educator and found the discussion interesting given the public outcry about this issue. Much of what you discussed fits with what I've learned and seen in practice. I was taught that "the doctor's pen is the most expensive piece of equipment in medicine." Obviously, I grew up in the era before electronic health records, so now it's the doctor's keyboard. I try to practice and teach about cost-effectiveness in medicine. My learners would tell you that my favorite questions have to do with justifying the testing that they're asking to order, etc. There is so much that we do in medicine that doesn't have good effectiveness data, even though we've done it for years.
Consolidation is also happening in the insurance market, with several vertically integrated behemoths emerging. If you look at the Fortune 500 list, there are 4 insurers in the Top 25 and 4 pharmacy and wholesale companies. It's hard to believe that insurance companies have low profit margins when they make the top 25 of that list.
I'd love to see some follow-up on this topic as I think you do a great job asking important questions. I'd suggest reaching out to Mark Fendrick at UMichigan. We hosted him for a grand rounds and he is thought-provoking around the idea and even meaning of "high-value care"
Hi Rob, thanks so much for this thoughtful comment, and for your work!! Regarding profit margins, if I recall from when I was doing healthcare reporting (although not actually on this topic), insurance company margins were typically under 5%. But their revenue is massive, so that even that low margin means enormous profit — i.e. a few percent of a few hundred billion dollars per year. I'm guessing the Fortune 500 list goes by revenue? ...But man, 4 in the top 25! ...Regarding the doctor's pen, that such an interesting quote. I have an enormous amount of respect for professionals who are in the position of trying to balance time and money and evidence and patient outcomes and defensive medicine etc etc. Even if every test were somehow magically without financial cost, I still think it would be a hard job to determine what to order. In any case, I really appreciate this comment — as I keep saying here, the comments have been the great perk of doing this newsletter — and I especially appreciate the interview suggestion.
Great conversation, a few more points I would add about the convoluted nature of US health "insurance" market:
1) Because their is such a wide spread in uninsured sticker price vs the negotiated payor rate, "health insurance" in the US does not actually function as a traditional insurance market, rather it functions as a subscription service that you are screwed w out. For instance, if you total your car and take it to the mechanic, they will charge 15K to you or to State Farm, they don't care....this allows people to understand what the product is and why it is necessary and utilize it appropriately....however if you get a routine MRI your insurer will pay $800 but the sticker rate charged w out insurance would be like $5000....even when you include the copayment/deductible/cost sharing measures which somewhat expose costs, this is an insane system which makes patients think that insurance=I get unlimited access to everything and if no insurance=I am screwed. This can be fixed by removing the category of "uninsured" (as ACA attempted) but no appetite to do so.
2. Premiums do not actually reflect individual risk....basically premiums are "capped" at a 3:1 rate where the sickest person cannot be charged more than 3X than the healthiest....what ends up happening is young/healthy population subsidizes older population, something which is fine, this is how insurance markets operate (ie: I live in a floodplain, so most likely I will be covered by premiums of people who live somewhere normal)....however the "floodplain" population is grossly undercharged and the rest of population is grossly overcharged which is OK, but this is not insurance it is something else (social safety net?)
3. Broadly people actually are fine with paying for healthcare as long as it is hidden (ie: never hear complaints about Medicare tax burden or employer sponsored coverage)...a lot of individual frustration with the insurance/payor system in US is not because of denials (as noted, very few ppl even need care annually and those that do tend to get it at a low out of pocket cost) but rather because of how difficult the system is to navigate and (rightful) fear about potential consequences of getting it wrong. Most countries "lock" people into a single health plan (either government or quasi non profit) basically for life, so there is at least the perception of continuity of care and no pretenses that you could be "dropped" because you miss a deadline.
In US, we have worst of all worlds where in some ways it functions as an "insurance" product (ie: enrollment periods to prevent adverse selection, high payouts, mandated profit/spend ratio, optional if you join or not, open to catastrophic risk if you dont join) and in other ways it functions as a safety net (taxation driven, misallocated risk)....this leads to the whole thing being very frustrating and opaque for really no reason other than to enrich and entrench existing players. Short of genuine patient driven advocacy or visionary political leadership, none of this will change.
Ezra, thanks so much for this. This is so well put (and well written). As I've said before, the greatest perk of this newsletter has been what I learn from the comments. This description is for sure going to stick in my mind: "rather it functions as a subscription service that you are screwed w out." I don't have anything in particular to add other than I've been thinking about your points for hours, and hope others will read them here. Regarding entrenched players, for the last few years I've been increasingly attuned (starting with going to neighborhood meetings fighting development) to the many seemingly intractable problems of incumbent-power. Have you read any Mancur Olson, by any chance?
I understand the idea that Anthem was trying to contain costs but when doctors don’t feel they’re being compensated commensurately, they don’t contract with that company which means the customer then shoulders the cost anyway and that’s a problem.
Hey there, David. I have enjoyed your perspective and your writing. This article concerned me enough to drive me here to comment and question. Here we go. Who funds Employ America? I didn't see any information about their funding on their website. Lots of smart staff, very little transparency. Really, one of the biggest industries in the US can't figure out how to police the bad actors in the system? Their only option is management by the lowest common denominator - forcing more overhead expenses and administrative work onto providers? I'm calling bullshirt (me moderating my language) on that one. We all know their savings will never make it to anywhere near lowering premiums. This year my family's premium (ACA Marketplace) increased by 10%. Our deductible increased by 300% - the quiet way of raising premiums. If any "cost saving" has ever done anything but increase executive benefits or dividends I would be genuinely surprised. I am not offended by paying doctors more. That is the whole forking point of healthcare. And why are anesthesiologists' incomes increasing? Do they work more because there are fewer of them? Just assuming they get paid more per surgery because they are padding it by 4 minutes is not valid. The professional that spent years acquiring expertise to help me maintain my health is what I value, what I want to buy. I do not value anything a health insurance company does. I do not want to buy their "product," I am FORCED to. Insurance is intended to mitigate the financial risk of devastating events. Insurance has no place in healthcare. Their only function should be writing a check in the event of a devastating event - just like auto or life insurance. The "services" they provide simply get between you and your money. And your doctor and your health. Driving providers out of business or out of network is another way to cut costs. You many need expensive care, but if you can't find a provider or get an appointment for months, costs are indeed cut. I am also cool with my premium covering more expensive users, just like I am okay with my tax dollars supporting schools my children no longer attend. It's a contribution to the society that has supported me with many privileges (education, clean air, clean water, service providers who can read and do math). Even as a struggling middle-class small business owner, I know what benefits society also benefits me. Health insurance (not health care - two ENTIRELY separate things despite the marketing) in no way, shape or form benefits anyone.
Hi Shea, it appears to me that Employ America has gotten important grants from Open Philanthropy, and the Hewlett Foundation. And you can look through some of their financial filings via ProPublica if you're interested. In any case, I appreciate your points, although I'm not sure I quite understand this: "I am not offended by paying doctors more. That is the whole forking point of healthcare." I don't begrudge doctors making a lot of money — and, on average, it is the highest paying profession in the U.S. I do think the complete lack of price transparency (and, oddly, different prices billed to insurance versus individuals) means that there is no market helping us calculate what payments should be to optimize efficiency. I'm sympathetic to your view about being forced to buy a product you don't want. At the same time, I'm confused by your argument that you shouldn't have to have insurance but that you're cool with your premium covering more expensive users. As it sounds like might be the case for you, I could much more cheaply have paid for my entire lifetime of healthcare out of pocket than by having insurance, but I think the externalities of health warrant sharing the financial burden. As far as insurance companies never lowering premiums even if costs decrease, I wouldn't expect them to do that out of goodwill, but I know that they compete to have employers choose them for employee plans. But, again, price transparency hampers that market. Sometimes I think we'd be better off swinging to one extreme or the other, either an actual market or a single-payer system, rather than the hideous hybrid we're stuck with. All that said, I appreciate your thoughts, and you certainly have valid points, even if I didn't entirely understand one or two of the nuances. I also agree that it seems to me this often especially stinks for small business owners.
Doctors at many levels in the US generally make far more than their counterparts in other countries. And I love and deeply admire so many of the people I've met in the healthcare industry over the years. At the same time, ultimately costs have to be contained somehow, and, as Preston noted, every payment is someone's income, so it's hard to change.
Yes, I can't imagine telling doctors anywhere, surprise, your salary will be cut in half! Be happy for the system!
I knew there was a major salary differential between here and there...I just had no idea it was *that* kind of difference.
Here (in Finland) one issue is that doctors in the private sector earn a lot better than in the public sector. It seems to me like this must be hurting the public health system (which is hurting), but I don't fully understand the mechanisms or all the ramifications. Private health insurance is relatively cheap, because of the public sector (which takes care of the really sick people), but what will happen when public healthcare collapses?
So it’s between the provider and the insurance company, not an increased cost to the patient. But isn’t the response by the insurance company to the example used in the first half of this article to raise premiums the following year? Which then does transfer the cost to the individual?
Hi John, appreciate this comment. I think the idea is that insurers are incentivized to lower premiums not just because costs go down (although, I suppose that could happen in some scenarios because of that "medical loss ratio" thing), but rather to compete for customers — specifically to offer better deals to employers shopping for plans for employees. So presumably they have a market incentive, although it seems to me this is a fairly dysfunctional market. I feel like the system — neither single payer nor a well-functioning market — may be stuck in a not-great middleground. But I have more questions than solid takes about all this!
I like the pulled quote feature. It makes me think about that quite in isolation and, in this case, wonder why you chose that one.
As for the article, the comments by HP about anesthesia are thoughts that came to my mind. I want coverage for anesthesia to extend for the duration of the surgery, so long as it is in a reasonable range. I don’t want my anesthesiologist worrying about getting paid while I am in surgery.
Thanks for the feedback and comment, Denny. I think Anthem was probably trying to get at that reasonable range by using the Medicare data, but, as Ashley said, whether that was the best way to go about it is debatable. I think it gets at this tension between lower costs (and particularly limiting the small number of "up coders") and preserving care, because healthcare is always rationed, everywhere in the world. In any case, I have more questions than answers about all this, but I found it to be a valuable perspective I hadn't considered.
My name is Elie I am a year 12 student in Darwin, Australia. I attend Northern Territory Christian Schools. I think that the Peter Principle is a result of specialisation, i.e. doing a major and not getting any management/leadership training alongside it. I also believe that this sort of explains that study about early specialisers not lasting as long in their career of choice as those who had a sampling period. What are your thoughts.
Hi Elie, thanks for this erudite question! I can't say for sure whether your theory is correct, but it certainly makes a lot of sense to me. I think it is conceptually in line with a very common mistake we make: thinking that because someone achieved as a specialist, they have magically learned how to become a broader thinker despite not having any practice at thinking more broadly. One of the studies I cited in Range actually looked at the difference between specialists who were able to move successfully into broader management roles, versus those who weren't. (For example, a doctor who becomes a hospital executive, or a violinist who becomes CEO of the orchestra or something like that.) The major difference was whether that individual had pursued other interests and lessons outside of their specialist career. Those who kept other interests and networks open were much more likely to transition successfully to management. So I think it's possible for specialists to cultivate their broader brain, but I expect that much of the time in the drive to specialize that gets left behind, and so excessive specialization does indeed power the Peter Principle. Best of luck with your studies, and I'm guessing you're headed for a vibrant sampling period;)
I find the point about some doctors rounding up fascinating. I'm a semi-retired attorney and when I starting practicing in the 90's, it was common for attorneys to round up to 15 minute increments. Some attorneys said they estimated their time at 15 minutes per page produced of pleadings, papers to be filed in the case, and I was shocked but they said I should do that. I only billed for the actual time spent and my clients appreciated that. Then I went into public service law and lost track of whether that is still common or not.
Great perspective. As a nurse practitioner and owner of a clinic with five other nurse practitioners, I see the insurance company always demonized. It is so easy for providers to prescribe the most expensive new medication (that the patient is often requesting because of direct to consumer pharma ads) and then complain when insurance doesn't approve it or if hoops have to be jumped to get it to the patient. The provider then allies with the patient in complaining about insurers and how they are ruining healthcare, but the provider is never considering the effect of their prescribing practices on the American healthcare system in general. Providers have no skin in the game.
Hearing that insurers have less marketing power is shocking to me, but I understand what they are saying. Health systems have the most. But small clinics such as mine feel like they have no negotiating power at all. I have sent negotiation letters multiple times and gotten no responses, and this just leads to small clinics not accepting certain insurances. We except Medicaid and most private payors but not Medicare, for example. I would also agree that providers and healthcare organizations are generally overpaid (gasp). I'm always shocked by the latest round of nurses on strike, where many are making 100-150k/year outside a metropolitan area. Not quite the situation I remember when reading Sinclair's The Jungle. Also the medium sized healthcare organizations in my area receive exorbitant sums from state Medicaid (I'm in Oregon), and are constantly hiring and building expensive buildings. The amount of money thrown around in healthcare is obscene.
Sorry for venting. I am just in the thick of this every day and constantly read about all the different sides of this yet feel powerless to make any bigger changes to the system. I wish I could help.
I used to work for the Blue Cross & Blue Shield Association over a decade ago, and we were working on trying to improve cost and quality of care transparency for patients back then to improve their ability to make informed decisions about where to seek healthcare. Consolidation dramatically threatens this (and it doesn't seem like much progress has been made on that front anyway). I do appreciate your sharing this side of the equation. Covering "frequent fliers" (the small share of patients who account for most costs) so that they aren't bankrupted is, in some ways, the reason for insurance to exist. They also, however, impose costs on the entire system. The industry is rife with agent problems. You know your health better than your insurers do, but (likely) lack the expertise to push back on a doctor recommending unnecessary tests or more expensive pharmaceuticals when generics are available. Insurers can (and should) try to push back on suspected incidents of such misbehavior, but when they get it wrong, if the provider proceeds to bill the patient, (as many do, maybe not in this particular instance, but in others, saying "your insurance wouldn't cover this part, here's what you owe") you have (sympathetic) sick people who trust their doctor's (seemingly) individualized recommendations over the insurer's statistical averages. Big data-enabled analyses might help both doctors and insurers more consistently deliver evidence-based standards of care, but we're not there yet. Lastly, it's worth noting that while new medical innovations needn't necessarily increase overall costs (pre-emptive heart medication could reduce expensive ER visits and bypass surgeries, better scanning/prediction could reduce unnecessary operations), in many instances reductions in mortality will push costs up, allowing sick people to survive while continuing to consume expensive treatments. There are no easy answers here.
Jacob, I don't know what to say here other than that erudite and eloquent comments like this one (and a few others on this post in particular) have been the greatest perk of having this newsletter. Your points made an impression on me, and I hope others will read them. (I know there are readers who go through the comments, in fact, so really appreciate you taking the time to leave this comment.)
Easiest answer is a medicare for all, or single-payor system. Making US pretty much like the rest of the civilized world (32 of the top 33 economies have some form of universal health insurance, is a better way to put it, but has less punch), who have less expensive care (and oft longer lives).
While it may not seem terribly easy to take money from health services millionaires & billionaires (it is on the order of taking candy from a baby - who can afford lawfare), but it still is the easiest way - much easier than keeping all the redundant administrative middlemen and STILL, somehow, reducing costs.
"...taking candy from a baby — who can afford lawfare..." I laughed and cried inside at the same time at this phrase.
Surgeons determine the length of a procedure, not the anesthesiologist. I agree that if the goal is to fight fraud there are much better ways to do that than using undefined Medicare data. No way to know how that was calculated (that I can find anywhere). Would also note that downplaying the significance of this by noting providers can “appeal denied claims” is a bit maddening. The proportion of claims that have to be appealed continues to increase, adding further administrative overhead for providers to get paid at all.
I hear you, Jordan. If paperworking people to death is supposed to be the strategy for cost containment, well...I think Ashley was being diplomatic when she said that Anthem was trying to contain costs but whether this policy was the best way to do it is "debatable." I do, though, think it gets at the difficult of managing costs in an interesting way, and I hadn't thought about some of what they shared. It feels to me like we get the administrative burden of a complicated, many-player system and yet we don't get most of the market benefits of a many-player system, so we're in this kind of maddening middle ground. In any case, thanks for reading, and I appreciate your comment.
Fair perspective, I agree. I was excited to see this topic pop up, as I’ve been in the industry for 10+ yrs now.
Long time reader. Thanks
Appreciate the kind words and your long-time readership! ...I know I have a fair number of readers in healthcare, so I'm always a little nervous about healthcare posts, but I felt challenged by this perspective, so thought it was worth sharing, even while I know there's a lot more to all this.
Agree. We have neither the efficiency of a true marketplace, nor the efficiency of single payor. Hillary lost her Presidential race not because of a 'basket of deplorables' comment, nor because her private email server was any more private than Colin Powell's, nor because she failed to visit Wisconsin - those these things add up, but the race was lost long before.
The real reason she didn't handily beat Trump, (she was the MOST qualified candidate in a generation), is that as a WIFE of a president, she successfully took on the healthcare industry collusion and shady insurers and billers, via the HIPAA act in 1996, forcing the industry for the first time to offer a couple apples to apples policies so that they would have to compete on prices head to head, which provided for the first time a way for a family health dollar decision-maker to evaluate the better policy on merits.
Prior to HIPAA, it was impossible for even a Harvard-trained statistician and medical doctor to rationally compare the expected value of alternative health insurance policies, in terms of: which one would be less costly, given an uncertain distribution of future family health events. I make this claim as a medical doctor with two Harvard post docs in public health and statistics... it was impossible to make a rational choice between policies for me, prior to HIPAA, and the subsequent Healthcare Marketplace.
Hillary's insight was that by requiring all insurers to include, in addition to all their other custom mixes of incomparable benefits and copays and sliding scales and exceptions, etc, two policies that had to always include the same sufficient standard set of basic health services, and that this would force the insurers to compete on price for these two policies - since there would be NO other differentiator between insurers.
In short, Hillary started the process (which she negotiated with Obama to continue, and it was later called Obamacare or ACA) of introducing some very basic competition and sunlight (aka The Healthcare Marketplace) into the lives of insurance co.s (and providers), and the industry hated her for it, and perhaps spent billions over the next 20 years to assure she never got the top job. Trump himself made over 400 efforts to kill it (by someone's count I saw the other day; sorry, don't have the citation - maybe Raskin or Sanders), but failed. It was so clearly effective and so clearly a benefit to ~40M Americans, it couldn't be killed.
The corrupt US healthcare industry was a well chosen enemy, but turned out it was even bigger than a brilliant first lady with outstanding presidential qualifications.
David, this is an interesting conversation, and I'm pleased that these topics are being discussed more broadly among groups outside of healthcare. However, there is some nuance that is missing from the anesthesia billing and reimbursement discussion that is pertinent. For some background, I am an anesthesiologist who works in a relatively small private practice in Missouri, one of the states targeted by the proposed Anthem policy. Interestingly, Don Arnold, MD is the current president of the American Society of Anesthesiologists, and he is also part of a private practice group here in Missouri.
There are a few points that I'd like to highlight. First, Medicare reimbursement for anesthesia services are so low that they are not adequate to sustain an anesthesia practice. Without significant additional financial support from the facilities in which they work, anesthesia groups cannot be viable. There is no other aspect of healthcare that is reimbursed so poorly by Medicare. Rather than suggesting the private insurance reimbursement rates move down toward Medicare rates, the discussion should be surrounding increasing Medicare rates so that anesthesia practices rely less heavily on privately insured patients to sustain themselves.
Second, as there is more and more downward pressure on private practice physician groups, an increasing percentage of physicians are employed by hospital systems. As alluded to in the article, these hospital systems drive up costs not only by charging facility fees where they were not previously charged, but also by becoming bigger and better negotiators with private insurance companies. The bigger the healthcare system the better their contracts and more expensive the care is at their facilities. Why not support smaller private physician practices? They generally provide more cost effective care than the larger systems.
Finally, anesthesiologists are paid well, and have had a jump in their salary recently. A major driver of this is a severe shortage of anesthesia providers. It is definitely not an increase in reimbursement from insurance companies. This extra compensation has come from hospital systems that are having to subsidize their anesthesia providers in order to keep them in a highly competitive market.
Sorry for the extended comment and thanks for the thought provoking discussion.
Colby, I can't believe you'd apologize for this comment...possibly my favorite thing about having this newsletter at all is that I can just toss some thoughts out and get eloquent and enlightening comments like this one. Pretty much everything in the conversation above was new to me, as is most of your comment here, so I'm glad to be learning. The comments on this post are making me wonder if perhaps I should try, for the first time, to just do a post sharing some illuminating comments on a previous post. In any case, this is just to say that I'm grateful you took the time to write this so that I and anyone who peruses comments can learn from it. As an aside, I'd be very interested to hear your thoughts on any of the causes, and perhaps remedies, of the shortage of anesthesia providers. That's definitely troubling. Anyway, mostly just wanted to thank you for taking time to share your experience at wisdom at length here, and your points will now be part of this conversation any time I have it.
Thanks David. The shortage of anesthesia providers is multifaceted, I think and there is a bit of anesthesia lore involved. The Wall Street Journal published an article in 1995 that caused a lot of fear among physician trainees about the future of anesthesiology (Anders G: Once a hot specialty, anesthesiology cools as insurers scale back. Wall Street Journal, March 17, 1995). This led to a paucity of anesthesiologists entering the workforce approximately a decade later. It turns out that many of these fears were unfounded and the specialty has since regained its popularity among trainees. However, there is currently a bimodal distribution in the age of the anesthesia workforce. >50% of anesthesiologists are currently over the age of 55! As large numbers of them reach retirement age, the shortage in the 45-55 age group becomes evident.
Additionally, procedures are a very important revenue source for healthcare systems. As many of them struggle financially, they try to drive procedural volume up. So the demand for anesthesia services is higher than it has been historically.
On top of this, COVID was very hard on healthcare providers but especially anesthesia practices. Elective surgeries were cancelled, essentially cutting off a majority of revenue for several months. Anesthesiologists were asked to work in the ICU and on special teams to place breathing tubes in COVID patients. This rather high risk work accelerated the retirement of many providers nearing the end of their career.
As far as remedies, in general we're not very good at predicting the future, but it seems like there should be some technological innovation that will alleviate some of the shortage. Perhaps there will be AI applications that will allow a single provider to monitor multiple operating rooms at a time. Or that will be able to manage the anesthetic so that a less skilled provider will be needed in the actual operating room. I'm not sure how far away solutions like these might be. The increased salaries will help as well. Although this will take some time to bear fruit as it takes several years of training before new providers enter the workforce. Anesthesiology is currently a popular choice among medical trainees, and all of the available training slots are typically filled each year.
I'm involved in a small non-profit organization that runs a self-funded health insurance program. The big costs to the program are driven by 15% of the participants (most of those we cover are between 25-39 years of age, and almost 70% don't file a single claim in a given calendar year). Premature births are the biggest cost to the program on the medical side with specialty pharmaceuticals on the drug side. Anyone writing about the insurance industry should spend some time running such a program and you will quickly see how difficult it can be to manage costs.
Alan, really appreciate this comment, and that's really interesting about the age range. My recollection is that, in healthcare in general, a huge portion of costs accrue to people in the last six months of life. It's interesting how much of this — both paying for care and trying to rein in those who overcharge — seems to involve a small number of players. I don't know if that makes it harder or easier to change, honestly; I could tell myself a convincing story either way. For speciality pharmaceuticals, I know providers are paid a percentage of the cost of the drugs they administer, and I'm guessing that will change at some point. In any case, I really appreciate your points. I have more questions than answers about all this (in fact, I have no answers), but I'd love to hear more of your thoughts on managing costs if you have the time and inclination to share.
Just sent you a message to follow up.
This perspective assumes a LOT of goodwill from insurers, hospitals and doctors, the former two are not known for their goodwill towards patients. The idea that care will not suffer due to doctors trying to hit anesthesia time targets seems facetious. The idea that premiums would fall due to the savings from this glorious measure seems like an outright lie coming from someone who claims to understand the industry. Insurers deny claims and implement measures that harm care and we do not see our premiums dropping, ever. Just stop. I really don't believe doctors are twiddling their thumbs and wasting time while patients are under anesthesia, I'd rather a surgeon feel at ease to do what is necessary without an added time constraint, which could end up costing a patient more if there is a complication.
Hi HP, appreciate this comment. I think the incentive for insurers to lower premiums isn't goodwill, but rather to compete for customers (i.e. employers shopping for plans for their employees). But your point is well taken. In any case, it seems to me that part of the problem is we have neither a functioning market nor a single-payer system. There are some issues for which I think if we swung hard one way or the other, we might be better off, and perhaps this is one of those. In any case, I felt like Preston and Ashley were getting at the difficulty of reining in the small number of "up-coders," and it was a valuable perspective for me and one I hadn't thought about.
This was my reaction as well (that reimbursement patterns DO affect service quality). (MD, MS, MPH, FACPM)
I know, right? Wouldn’t it be reassuring to know that if your surgeon didn’t make a time cut on your surgery their employer would suffer a profit loss? What could go wrong?
Thank you for this explainer. I'm disturbed that this isn't being discussed more by mainstream outlets, given recent events.
Really appreciate the kind words, Rachel. I know we can't cover every angle of healthcare in a post like this, but it seemed to me like a worthy perspective that challenged my intuition. That said, I figured it wouldn't be a super popular take, which might explain why it isn't discussed a lot in mainstream outlets.
Hi David,
Thanks for this. I'm an emergency physician and medical educator and found the discussion interesting given the public outcry about this issue. Much of what you discussed fits with what I've learned and seen in practice. I was taught that "the doctor's pen is the most expensive piece of equipment in medicine." Obviously, I grew up in the era before electronic health records, so now it's the doctor's keyboard. I try to practice and teach about cost-effectiveness in medicine. My learners would tell you that my favorite questions have to do with justifying the testing that they're asking to order, etc. There is so much that we do in medicine that doesn't have good effectiveness data, even though we've done it for years.
Consolidation is also happening in the insurance market, with several vertically integrated behemoths emerging. If you look at the Fortune 500 list, there are 4 insurers in the Top 25 and 4 pharmacy and wholesale companies. It's hard to believe that insurance companies have low profit margins when they make the top 25 of that list.
I'd love to see some follow-up on this topic as I think you do a great job asking important questions. I'd suggest reaching out to Mark Fendrick at UMichigan. We hosted him for a grand rounds and he is thought-provoking around the idea and even meaning of "high-value care"
Hi Rob, thanks so much for this thoughtful comment, and for your work!! Regarding profit margins, if I recall from when I was doing healthcare reporting (although not actually on this topic), insurance company margins were typically under 5%. But their revenue is massive, so that even that low margin means enormous profit — i.e. a few percent of a few hundred billion dollars per year. I'm guessing the Fortune 500 list goes by revenue? ...But man, 4 in the top 25! ...Regarding the doctor's pen, that such an interesting quote. I have an enormous amount of respect for professionals who are in the position of trying to balance time and money and evidence and patient outcomes and defensive medicine etc etc. Even if every test were somehow magically without financial cost, I still think it would be a hard job to determine what to order. In any case, I really appreciate this comment — as I keep saying here, the comments have been the great perk of doing this newsletter — and I especially appreciate the interview suggestion.
Great conversation, a few more points I would add about the convoluted nature of US health "insurance" market:
1) Because their is such a wide spread in uninsured sticker price vs the negotiated payor rate, "health insurance" in the US does not actually function as a traditional insurance market, rather it functions as a subscription service that you are screwed w out. For instance, if you total your car and take it to the mechanic, they will charge 15K to you or to State Farm, they don't care....this allows people to understand what the product is and why it is necessary and utilize it appropriately....however if you get a routine MRI your insurer will pay $800 but the sticker rate charged w out insurance would be like $5000....even when you include the copayment/deductible/cost sharing measures which somewhat expose costs, this is an insane system which makes patients think that insurance=I get unlimited access to everything and if no insurance=I am screwed. This can be fixed by removing the category of "uninsured" (as ACA attempted) but no appetite to do so.
2. Premiums do not actually reflect individual risk....basically premiums are "capped" at a 3:1 rate where the sickest person cannot be charged more than 3X than the healthiest....what ends up happening is young/healthy population subsidizes older population, something which is fine, this is how insurance markets operate (ie: I live in a floodplain, so most likely I will be covered by premiums of people who live somewhere normal)....however the "floodplain" population is grossly undercharged and the rest of population is grossly overcharged which is OK, but this is not insurance it is something else (social safety net?)
3. Broadly people actually are fine with paying for healthcare as long as it is hidden (ie: never hear complaints about Medicare tax burden or employer sponsored coverage)...a lot of individual frustration with the insurance/payor system in US is not because of denials (as noted, very few ppl even need care annually and those that do tend to get it at a low out of pocket cost) but rather because of how difficult the system is to navigate and (rightful) fear about potential consequences of getting it wrong. Most countries "lock" people into a single health plan (either government or quasi non profit) basically for life, so there is at least the perception of continuity of care and no pretenses that you could be "dropped" because you miss a deadline.
In US, we have worst of all worlds where in some ways it functions as an "insurance" product (ie: enrollment periods to prevent adverse selection, high payouts, mandated profit/spend ratio, optional if you join or not, open to catastrophic risk if you dont join) and in other ways it functions as a safety net (taxation driven, misallocated risk)....this leads to the whole thing being very frustrating and opaque for really no reason other than to enrich and entrench existing players. Short of genuine patient driven advocacy or visionary political leadership, none of this will change.
Ezra, thanks so much for this. This is so well put (and well written). As I've said before, the greatest perk of this newsletter has been what I learn from the comments. This description is for sure going to stick in my mind: "rather it functions as a subscription service that you are screwed w out." I don't have anything in particular to add other than I've been thinking about your points for hours, and hope others will read them here. Regarding entrenched players, for the last few years I've been increasingly attuned (starting with going to neighborhood meetings fighting development) to the many seemingly intractable problems of incumbent-power. Have you read any Mancur Olson, by any chance?
I understand the idea that Anthem was trying to contain costs but when doctors don’t feel they’re being compensated commensurately, they don’t contract with that company which means the customer then shoulders the cost anyway and that’s a problem.
Appreciate your point, Alan, and just thinking about it makes my head spin why I try to consider how to unwind some of our healthcare mess.
Hey there, David. I have enjoyed your perspective and your writing. This article concerned me enough to drive me here to comment and question. Here we go. Who funds Employ America? I didn't see any information about their funding on their website. Lots of smart staff, very little transparency. Really, one of the biggest industries in the US can't figure out how to police the bad actors in the system? Their only option is management by the lowest common denominator - forcing more overhead expenses and administrative work onto providers? I'm calling bullshirt (me moderating my language) on that one. We all know their savings will never make it to anywhere near lowering premiums. This year my family's premium (ACA Marketplace) increased by 10%. Our deductible increased by 300% - the quiet way of raising premiums. If any "cost saving" has ever done anything but increase executive benefits or dividends I would be genuinely surprised. I am not offended by paying doctors more. That is the whole forking point of healthcare. And why are anesthesiologists' incomes increasing? Do they work more because there are fewer of them? Just assuming they get paid more per surgery because they are padding it by 4 minutes is not valid. The professional that spent years acquiring expertise to help me maintain my health is what I value, what I want to buy. I do not value anything a health insurance company does. I do not want to buy their "product," I am FORCED to. Insurance is intended to mitigate the financial risk of devastating events. Insurance has no place in healthcare. Their only function should be writing a check in the event of a devastating event - just like auto or life insurance. The "services" they provide simply get between you and your money. And your doctor and your health. Driving providers out of business or out of network is another way to cut costs. You many need expensive care, but if you can't find a provider or get an appointment for months, costs are indeed cut. I am also cool with my premium covering more expensive users, just like I am okay with my tax dollars supporting schools my children no longer attend. It's a contribution to the society that has supported me with many privileges (education, clean air, clean water, service providers who can read and do math). Even as a struggling middle-class small business owner, I know what benefits society also benefits me. Health insurance (not health care - two ENTIRELY separate things despite the marketing) in no way, shape or form benefits anyone.
Hi Shea, it appears to me that Employ America has gotten important grants from Open Philanthropy, and the Hewlett Foundation. And you can look through some of their financial filings via ProPublica if you're interested. In any case, I appreciate your points, although I'm not sure I quite understand this: "I am not offended by paying doctors more. That is the whole forking point of healthcare." I don't begrudge doctors making a lot of money — and, on average, it is the highest paying profession in the U.S. I do think the complete lack of price transparency (and, oddly, different prices billed to insurance versus individuals) means that there is no market helping us calculate what payments should be to optimize efficiency. I'm sympathetic to your view about being forced to buy a product you don't want. At the same time, I'm confused by your argument that you shouldn't have to have insurance but that you're cool with your premium covering more expensive users. As it sounds like might be the case for you, I could much more cheaply have paid for my entire lifetime of healthcare out of pocket than by having insurance, but I think the externalities of health warrant sharing the financial burden. As far as insurance companies never lowering premiums even if costs decrease, I wouldn't expect them to do that out of goodwill, but I know that they compete to have employers choose them for employee plans. But, again, price transparency hampers that market. Sometimes I think we'd be better off swinging to one extreme or the other, either an actual market or a single-payer system, rather than the hideous hybrid we're stuck with. All that said, I appreciate your thoughts, and you certainly have valid points, even if I didn't entirely understand one or two of the nuances. I also agree that it seems to me this often especially stinks for small business owners.
I...I had no idea anesthesiologists made that much money...
As far as I can tell, they make far less here in Europe (let alone most other places).
Doctors at many levels in the US generally make far more than their counterparts in other countries. And I love and deeply admire so many of the people I've met in the healthcare industry over the years. At the same time, ultimately costs have to be contained somehow, and, as Preston noted, every payment is someone's income, so it's hard to change.
Yes, I can't imagine telling doctors anywhere, surprise, your salary will be cut in half! Be happy for the system!
I knew there was a major salary differential between here and there...I just had no idea it was *that* kind of difference.
Here (in Finland) one issue is that doctors in the private sector earn a lot better than in the public sector. It seems to me like this must be hurting the public health system (which is hurting), but I don't fully understand the mechanisms or all the ramifications. Private health insurance is relatively cheap, because of the public sector (which takes care of the really sick people), but what will happen when public healthcare collapses?
So it’s between the provider and the insurance company, not an increased cost to the patient. But isn’t the response by the insurance company to the example used in the first half of this article to raise premiums the following year? Which then does transfer the cost to the individual?
Hi John, appreciate this comment. I think the idea is that insurers are incentivized to lower premiums not just because costs go down (although, I suppose that could happen in some scenarios because of that "medical loss ratio" thing), but rather to compete for customers — specifically to offer better deals to employers shopping for plans for employees. So presumably they have a market incentive, although it seems to me this is a fairly dysfunctional market. I feel like the system — neither single payer nor a well-functioning market — may be stuck in a not-great middleground. But I have more questions than solid takes about all this!
I like the pulled quote feature. It makes me think about that quite in isolation and, in this case, wonder why you chose that one.
As for the article, the comments by HP about anesthesia are thoughts that came to my mind. I want coverage for anesthesia to extend for the duration of the surgery, so long as it is in a reasonable range. I don’t want my anesthesiologist worrying about getting paid while I am in surgery.
Thanks for the feedback and comment, Denny. I think Anthem was probably trying to get at that reasonable range by using the Medicare data, but, as Ashley said, whether that was the best way to go about it is debatable. I think it gets at this tension between lower costs (and particularly limiting the small number of "up coders") and preserving care, because healthcare is always rationed, everywhere in the world. In any case, I have more questions than answers about all this, but I found it to be a valuable perspective I hadn't considered.
Hey,
My name is Elie I am a year 12 student in Darwin, Australia. I attend Northern Territory Christian Schools. I think that the Peter Principle is a result of specialisation, i.e. doing a major and not getting any management/leadership training alongside it. I also believe that this sort of explains that study about early specialisers not lasting as long in their career of choice as those who had a sampling period. What are your thoughts.
Hi Elie, thanks for this erudite question! I can't say for sure whether your theory is correct, but it certainly makes a lot of sense to me. I think it is conceptually in line with a very common mistake we make: thinking that because someone achieved as a specialist, they have magically learned how to become a broader thinker despite not having any practice at thinking more broadly. One of the studies I cited in Range actually looked at the difference between specialists who were able to move successfully into broader management roles, versus those who weren't. (For example, a doctor who becomes a hospital executive, or a violinist who becomes CEO of the orchestra or something like that.) The major difference was whether that individual had pursued other interests and lessons outside of their specialist career. Those who kept other interests and networks open were much more likely to transition successfully to management. So I think it's possible for specialists to cultivate their broader brain, but I expect that much of the time in the drive to specialize that gets left behind, and so excessive specialization does indeed power the Peter Principle. Best of luck with your studies, and I'm guessing you're headed for a vibrant sampling period;)
I find the point about some doctors rounding up fascinating. I'm a semi-retired attorney and when I starting practicing in the 90's, it was common for attorneys to round up to 15 minute increments. Some attorneys said they estimated their time at 15 minutes per page produced of pleadings, papers to be filed in the case, and I was shocked but they said I should do that. I only billed for the actual time spent and my clients appreciated that. Then I went into public service law and lost track of whether that is still common or not.
Great perspective. As a nurse practitioner and owner of a clinic with five other nurse practitioners, I see the insurance company always demonized. It is so easy for providers to prescribe the most expensive new medication (that the patient is often requesting because of direct to consumer pharma ads) and then complain when insurance doesn't approve it or if hoops have to be jumped to get it to the patient. The provider then allies with the patient in complaining about insurers and how they are ruining healthcare, but the provider is never considering the effect of their prescribing practices on the American healthcare system in general. Providers have no skin in the game.
Hearing that insurers have less marketing power is shocking to me, but I understand what they are saying. Health systems have the most. But small clinics such as mine feel like they have no negotiating power at all. I have sent negotiation letters multiple times and gotten no responses, and this just leads to small clinics not accepting certain insurances. We except Medicaid and most private payors but not Medicare, for example. I would also agree that providers and healthcare organizations are generally overpaid (gasp). I'm always shocked by the latest round of nurses on strike, where many are making 100-150k/year outside a metropolitan area. Not quite the situation I remember when reading Sinclair's The Jungle. Also the medium sized healthcare organizations in my area receive exorbitant sums from state Medicaid (I'm in Oregon), and are constantly hiring and building expensive buildings. The amount of money thrown around in healthcare is obscene.
Sorry for venting. I am just in the thick of this every day and constantly read about all the different sides of this yet feel powerless to make any bigger changes to the system. I wish I could help.