How Doctors Subsidize American Health Care

Physicians are subsidizing American health care to the tune of unknown billions of dollars each year - we are simply failing to collect money from insurance companies.

Physicians are subsidizing American health care to the tune of unknown billions of dollars each year — we are simply failing to collect from insurance companies the money that has been earned. This has certainly led to reduced incomes for ourselves, but also an enormous waste of time, effort and paper in our efforts to cope. And if patient care hasn't suffered, it is only because doctors and staffs are working harder and longer than need be.

The problems lie both in the outdated structure of medical economics, with people's convoluted work-arounds, and in doctors' too frequent sub-optimal execution of our financial functions. Docs know how being meticulous in our medical practices is critical to improved outcomes. Why shouldn't it be the same in our business affairs? Aye, there's the rub....

Docs in private practice are leaving billions on the table in uncompensated activity. Some examples of currently unbilled, but important medical services, include phone and email opinions (which can be useful in a capitated system, to cut down office visits), multiple problems and/or extra time in one visit that cannot be adequately compensated or rescheduled, and handing out sample amounts of medical supplies that we have paid for but haven't billed for. Giving out small amounts of surprisingly expensive medical supplies does not individually rise to the level of billing, or collecting, for them but taken together costs us millions.

Other examples include plain unbilled work where the billing is a hassle and the payment negligible, such as Medicaid, waived fees and co-pays (at least these waivers are known and voluntary) and the copious time spent filling out forms. Especially the myriad presented to us not even related to billing.

And this brings us to the biggie: improperly coded billing. Some billing consultants report that they have audited practices that may be "giving away" 25% of potential income through poor coding. And with the looming advent of the ICD-10 taking us from 14,000 to 78,000 codes, we can only expect more confusion, more paperwork and, possibly, even lower revenues.

And let us not forget the corollaries to coding problems: unpaid bills returned from insurance companies for expensive, time consuming correction, and bills that are simply never paid by these companies, all compounded by our too frequently poor management of accounts receivables altogether. And, as I noted recently, medical bills’ collectability drops off more precipitately with time than any other kind, according to experts. It's sand through our fingers, friends.

Doctors donate countless hours and personal funds to charitable work. It is something that we should all be proud of. We do it out of a sense of duty and the goodness of our hearts. That is to say on an aware, voluntary basis. The litany of uncompensated loss above is less voluntary, partially the result of a dysfunctional, uncoordinated network of payment structures that is not of our making. It’s a sort of a "taxation without representation" that we have so far been powerless to effect change upon.

And don't forget that these billions in silent physician subsidy of the American health care system is partially due to our lack of business and organizational awareness training, that old bugaboo, and our tacit lack of attention to our professional practice financial affairs. This messy situation of inadvertent physician subsidy reminds me of that old adage, fool me once, shame on you. But fool me twice, shame on me.