Skip to Content

Coronavirus (COVID-19) Information. Click here.

Physician Fallacies: Peeling Back the Avoidable Healthcare Costs that Lead to Debt

As we approach the 2020 political season, healthcare remains an eternal “hot topic” issue; one that acts as an economist’s reoccurring bad dream. Much like a bad dream, the obvious warning signs of our domestic system’s atrophy disappear into the cognition of the economist’s mind and are forgotten by mid-morning. The economist, much like the rest of the country, has an eerie feeling due to this reoccurring healthcare nightmare, but can’t quite seem to pinpoint the root of their discomfort or begin to answer the lingering paradox of “How can we make healthcare in the U.S. financially sustainable?”

The answer to that question is a large, complex, and convoluted issue to tackle. An alternative approach is to look at our ongoing mistakes as an industry and start to peel back some of the fraud, waste, and abuse at least long enough to get our collective head above water to propose a semi-legitimate long-term solution. 

A doctor pocketing money from a staggering healthcare bill. 

Diagnosing a Questionable Healthcare Diagnosis

Individuals, facilities, insurance entities, CMS, and providers are just some of the key players necessary to stop the financial hemorrhaging. Not often enough do we evaluate the role of the physician from an economic standpoint and their direct effect on the industry. A recently released edition of “Bill of the Month,” a crowdsourced investigation of medical bills by Kaiser Health News and NPR, allows us to do just that. 

To paraphrase the article: A New York City patient went to a PCP (Primary Care Physician) with symptoms of a head cold. About to leave on vacation, this individual thought nothing of a typical provider visit to address some minor discomforts before traveling. A throat swab, a quick round of antibiotics, and a $25 co-pay sends this patient (aka consumer, customer, client, etc.) seemingly out the door without a hitch. 

Upon returning from vacation, this healthcare consumer has a staggering $28,395.50 bill from their provider relating to the previous “head cold” visit. This physician ultimately sent the throat swab (claiming to test strep, among a myriad of other unlikely diagnoses) to a non-network lab facility with which this patient’s insurer (BCBS) did not have an established contracted rate. Normally, these tests run through an in-network provider would run the same insurer about $653 – a 191 percent price difference coordinated through the discretion of this physician. 

As I read through the article, a handful of painfully obvious questions came to mind. Namely:

1. Why intentionally use an out-of-network lab service?

a. The physician office had applicable and valid insurance info from the patient and could easily check for a list of in-network providers. They chose to use an out-of-network facility.

2. Why were so many unnecessary tests run for likely influenza (common cold) diagnosis?

a. “In my 20 years of being a doctor, I’ve never ordered any of these tests, let alone seen any of my colleagues, students, and other physicians, order anything like that in the outpatient setting,” said Dr. Ranit Mishori in Kaiser Health News. “I have no idea why they were ordered.”

b. “There are about 250 viruses that cause the symptoms for the common cold, and even if you did know that there was virus A versus virus B, it would make no difference because there’s no treatment anyway.”

3. Why were antibiotics prescribed for a viral infection? 

a. There’s a lesser-known, but just as frightening scenario where continued unnecessary antibiotic use within the general population will lead to widespread antibiotic resistance that will affect not only our healthcare industry but veterinarian and agricultural industries as well. Antibiotics cannot effectively treat viral infections. 

Here’s the kicker from Kaiser Health News: “The third reason for the high bill may be the connection between the lab and Kasdan’s doctor. Kasdan’s bill shows that the lab service was provided by Manhattan Gastroenterology, which has the same phone number and locations as her doctor’s office.”

Undoubtedly, this physician or practice is getting a kickback from the lab’s profit by billing this patient’s insurer an absurd and unnecessary amount. Coincidentally, Kaiser Health News points out that “Manhattan Gastroenterology” (the out-of-network lab running these tests) “is registered as a professional corporation with the state of New York, which means it is owned by doctors.” Maybe this primary care doctor in particular? 

Now the point of this blog isn’t to uncover fraudulent billing practices. Those occur every minute of every day within our healthcare system. Rather, its aim is to point out that if we want anything close to a sustainable system for the baby-boomer generation’s progress into older age, or for the generations that follow, we’re all responsible to do our part in turning this thing around. That means you too, physicians. 

Regardless of which individual ends up settling the $28,000 bill from this PCP, the moral of the story is that billing tens of thousands of dollars to the healthcare system opposed to hundreds, by choice, are the decisions that, when multiplied and repeated over decades, gets us to where we are today: a seemingly insurmountable amount of debt. Furthermore, and most important to employers, high claims like these that could and should be otherwise avoided will ultimately lead to higher insurance premiums in future years for the employer and its employees. 

What can we (healthcare consumers) do to mitigate national healthcare debt?

Staying informed, asking the right questions, and taking ownership of our personal health habits are surefire ways to reduce the expenditure and volatility of our health system. Working with consultants from an employer-centric company like GMS can only help educate employers on the successes and failures within our system and how those points can be used towards the advantage of those offering benefits while mitigating unnecessary financial loss. 

GMS is an employer for employers, constantly striving to provide transparency and sustainability for those we serve. Contact a local office today to begin your healthcare partnership with GMS.

Return to Blog