Thursday, February 07, 2013
Archaic Payment Arrangements
Our archaic system of paying doctors and hospitals is
beginning to cause problems.
The Boston
press recently carried a story about a patient who got a few pre-cancerous skin
spots removed in what appeared to be the private office of his
Dermatologist. He got the doctor’s bill
in what seemed to be a reasonable amount and was then shocked a few days later
to get a bill for $1,525 from a nearby hospital for “operating room and other
hospital charges.”
The February 5 issue of The Boston Globe editorialized
against such charges, but without seeming to understand the origins of the
problem.
In recognition of the traditional independence of the
medical profession, payments to doctors have been kept separate from payments
to hospitals. Thus we have Blue Cross
and Medicare Part A for hospitals and Blue Shield and Medicare Part B for
doctors.
Originally, hospital outpatient departments were for poor
people. Physician care was provided by interns and residents under the
supervision of attending staff who served without pay. Then Medicare and Medicaid came along and
insured many of those people. But
outpatient care was insured on the doctor side and there was no provision for
paying the hospital. Eventually that was
changed so that insurance paid both.
As time went by, hospitals started buying up physician
practices, many of which continued to operate in private offices. Hospitals apparently found that in these
circumstances they could make a hospital charge as well as a professional fee
charge – something obviously not intended when the dual-billing system was
created.
That is the sort of thing that happens when financial
arrangements don’t keep up with the times.