NEW PATIENTS CALL:
919-929-9610
TOLL FREE:
877-876-3783

10 Convenient North Carolina Triangle Locations
Cary
Chapel Hill
Durham
Raleigh
Wake Forest
Burlington

Become a Partner:
Practices
Individual Clinicians

Partners
All
Clinical Associates
Psychiatrists
Physicians Assistants
Nurse Practitioners

Blog

Sitemap

Managed Care Stranglehold

While Carolina Partners may not necessarily agree with the content of each post, we are committed to posting those submissions that do not violate our terms of use in the interest of generating fair and vigorous debate.

Private insurance companies have just about completed their stranglehold on mental health clinicians in America, with uniformly negative results for people suffering from mental health issues.

In the seventies, eighties, and early nineties, insurance companies got together and decided that doctors and hospitals in America were making too much money for their tastes.  They figured that every nickel they didn’t pay a doctor was money that could be going into the pockets of the managers and shareholders of the big insurers and they convinced the US government to go along with them starting with the Health Maintenance Organization Act of 1973 — another one of Richard Nixon’s contributions to our Great Society.

Based on a hysterical cry of “Health Care Costs Will Bankrupt Society,” the insurance industry embarked on a multiple-decades-long propaganda campaign designed to convince government and the public that greedy doctors and hospitals were charging too much for health services and this rapacity, if unchecked, was likely to end society as we know it.  Brilliantly, the insurers positioned themselves in this debate as the “friend” of American medical patients by using low copays for consumers as the initial incentive for employers to jump on the managed care bandwagon.  Now, the argument went, consumers could afford to access all the care they need and the whole thing will be financed by those overreaching doctors who would be taken down a peg and have to live in the middle class with the rest of us.

But let’s look at what really happened.  While the overall costs of health care in America did decrease a little bit at the very beginning of managed care, they quickly started going up again and now have reached unprecedented heights.  In outpatient mental health care at least, those initial “loss-leader” copays have gone from $10 or $20 to $50, $60, $70 or more until the consumer is paying a much larger percentage of the health care costs, versus the insurance companies, than they did in 1973!   Profits for insurance companies are at dizzying levels, which of course seems to have been the goal all along.  Meanwhile, the insurance companies have groomed whole new generations of customers for themselves by luring them into the system with the low copay incentive, customers who are now addicted to the idea that a person should have access to the care they actually need in order to be healthy, and now have to pay whatever the insurers want to charge.

What?  Insurance companies determining what patients pay for health care?  Aren’t doctors and hospitals supposed to set their prices by negotiating with patients in accordance with free market economics?   At the very least, isn’t everything the government’s fault?

No.  After twenty to thirty years of managed care, private insurers are firmly in control of what doctors charge patients in most cases, with the exception of Medicare and Medicaid programs.  Insurance companies can now boast that about 95% of all private mental health consumers are contracted with one insurer or another and using that leverage, they have forced most doctors to accept that they have to practice medicine on the insurance company’s terms.  And they are using that power to full effect.  Insurers are gradually strangling the doctors in their “preferred provider panels” by slowly lowering their reimbursement rates, and consequently doctors have to treat more and more patients, more and more quickly, resulting in diminished quality of care and huge numbers of doctors electing to leave medicine altogether.  Insurance company profits remain inviolate, of course.

None of this is good for the American people.  Fewer doctors treating larger numbers of sick people in an economically unviable way is a bad formula for success in any sense of the word.   In the old days, when doctors could charge what the market would bear, many physicians would provide sliding scale or pro-bono services to those in need.  Now that doctors can barely afford to remain in practice, this is no longer the case, although many doctors still subsidize care for people by not collecting all the money that patients owe to them.   So now, I guess, treating under-served populations is strictly the province of governments and we all know how governments are not always the best program managers despite all the good intentions in the world.   Good luck America!

I don’t know what the solution to this mess may be but I do know that in the cosmic scheme of things, doctors and patients are natural allies.  Doctors and consumers should lock arms in convincing their governments to reign in the insurance industry and to let physicians do what they are supposed to: care for ill people.  And for that they deserve proper compensation.   The actual way to reduce health care costs in America is to eliminate the insurance middle man, let doctors charge a fair price and let the government finally establish a Universal Coverage system like every other civilized country in the world.

  • Share/Bookmark

1 comment to Managed Care Stranglehold

  • Jon Asterberg

    I didn’t know about some of this and I work in the industry! It’s frightening that insurance companies set the doctor’s prices and then pretend they are trying to help patients! That’s not free market capitalism - where a third party intervenes to tell the bargaining parties what to do. When the government interferes with private actors like this, the Tea Baggers go crazy, right? Isn’t this an anti-trust violation, or something? Why are psychiatrists putting up with this? Now I know why some doctors I know are leaving the practice of medicine for greener pastures, like ditch digging.
    JA

Post A Comment

 

 

 

You can use these HTML tags

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>