Diagnosis for Democracy
Insights into the State of Our Union
A Blog by Rob Tenery, MD


August 8, 2013: Where Did Physicians First Go Wrong?

By Rob Tenery, MD on August 8, 2013

Health insurance was first introduced in 1929 to cover the medical expenses of teachers in the Dallas Independent School District through Baylor University Hospital in Dallas, Texas. Later that company would become Blue Cross/Blue Shield of Texas. The beginnings of what would be formally called the Medicaid program was first established when President Franklin Roosevelt signed the Social Security Act into law in 1935. Initially the program covered the indigent elderly, the blind and disabled children.  When President Lyndon Johnson signed into law the Social Security Amendments of 1965, the social programs of Medicare and Medicaid were formally created.

At first, the health insurance programs and Medicare set the rates that they would reimburse their subscribers for a particular malady such as appendicitis, uncomplicated delivery, etc. Patients would then pay their doctors with the money the insurers had reimbursed them; any differences were still the responsibility of the patients. Not infrequently, the patients kept the money, and the doctors were left ‘holding the bag.’ To deal with these concerns, patients agreed to assign their payments from the insurer over to their doctors. Doctors, weary of past experiences, gladly accepted this new form of payment--- direct reimbursement by the payer.

It didn’t take long until physicians became accustomed to accepting direct payments from the payers. Also patients began to feel that their coverage contract was between their doctors and the insurers. Patient responsibility for the remainder of their bill began to fade into the background. Thus, both parties were ‘easy pickings’ for what would follow--- assigned payments evolving into allowable charges. Doctors, afraid that they would lose their patients to other doctors who would be willing participants in this arrangement, conceded. The payers took control and the rest is history!

So why not just say no? Many have!

An increasing number of physicians are dropping out of Medicare and many more don’t participate in Medicaid or Workman’s Compensation. Some don’t participate any insurance programs. The new specialty of concierge (also called retainer-based and boutique) medicine is finding growing favor in select populations. Although there are wide variations in structure and payment responsibilities, the commonality is the patient and his/her doctor have agreed to a financial arrangement outside of the patient’s coverage--- a throwback to days prior to assigned payments by the payers.

Unfortunately, for the medical profession, the option of just saying no may be too late--- not necessarily on an individual basis, but as a group.

As the divisiveness over support for the Affordable Care Act clearly demonstrates, the physician community has not been able to come together as a unified voice. The American Medical Association that could have been that unifying structure has been plagued with dwindling membership since the 1950s. In most cases, the national specialty organizations have not been able to put their own special interests aside for the overall good of the profession. Many of the state and county medical associations, as powerful as they can be in the state legislatures, are not only fighting membership issues, they are fighting the political gerrymandering with the allied health care providers every time their legislatures are in session. The state specialty organizations mostly secede political issues to the national specialty organizations or work through the state medical organizations because of their greater influence and common need to speak for the whole of the profession.

Apathy for any cause, other than one that creates direct benefit, has grown to epidemic proportions beginning with the ‘me now’ generation of the 1960s. Dwindling participation in conventional churches, volunteer organizations such as the Masons and participants in the political process are examples of a generation that expects to have ‘someone else’ do it for them. Individual initiative centers on personal gratification, rather than working toward a greater cause. Granted there are exceptions, such as Habitat For Humanity, the Bible churches and the Salvation Army, but increasingly, they are the exception.

The physician population falls right in with this anemia of participation. Take physicians’ low participation rate in many of the organizations that represent them. The exceptions are the national specialty organizations that are crucial to acquiring and maintaining board certification and recertification that are required by most payers.

The Medical Group Management Association reports that there has been an almost 75% increase in the number of doctors employed by hospitals or hospital systems since 2000. They also project that by next year, half of all doctors will be working for or integrally associated with some form of hospital system. In a recent survey, the consulting company, Accenture, reported that in 2000 that 57% of physicians were ‘on their own.’ Today that percentage has fallen to 39%.

An interesting side from this same report noted that there was a decrease in productivity by almost 25% under these arrangements. An example cited in the Orlando Sentinel on April 3, 2013, reported a 44% higher cost for a standard heart-perfusion study if a hospital-employed cardiologist performed the procedure, than if that same procedure was performed by an independent physician.

With this trend from private participation (solo or group practice) to corporate association, the rules change. When physicians’ roles change from an employer (private practice) to an employee of the corporation, attitudes change. They are still practicing medicine, but protecting the viability of the treating entity now potentially comes into conflict with what is best for their patients. They must now share their loyalty between their patients and their employers. Additionally, not only does the corporate entity (hospital) usually take over negotiation with the payer for reimbursements, it puts them in control of the physicians’ revenue stream. The patient/doctor relationship has added two new members to the family: the facility (corporation) and the payer.

The inertia virus of nonparticipation is infectious and has permeated all aspects of our society. Why go to a meeting when the ‘first tee’ is a short drive away? Why create a new organization or change the AMA to an organization that has the real authority to speak for all physicians on issues such as the ACA, the SGR and Medicare fee adjustments? Why ask the national specialty societies to give up some of their autonomy and become an integral part of that national organization?

Without changes in physicians’ priorities and a reordering of the organizations that represent physicians, the decline of this noble profession will continue. That may be okay for a 9 to 5 job, but I’m not sure that is what the founders of this profession envisioned.




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