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Hospitals, Third Parties, and Physicians: Opposing Roles in Containing Healthcare Costs

Hospitals, Third Parties, and Physicians: Opposing Roles in Containing Healthcare Costs
Author Information (click to view)

Madhukar Kasarla, MD

Madhukar Kasarla, MD, works as a hospitalist physician with APOGEE Physicians at Parkway Surgical and Cardiovascular Hospital in Fort Worth, Texas. He also works for Texas Health Physicians Group at Texas Health Harris Methodist Hospital and Health Harris Methodist Hospital Southwest in Fort Worth, and Texas Health Harris Methodist Hospital in Azle, Texas. He did his Internal Medicine residency at Mercy Hospital & Medical Center, Chicago. For more information, please contact kasarla29@yahoo.commadhukarreddy.kasarla@apogeephysicians.com.

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Madhukar Kasarla, MD (click to view)

Madhukar Kasarla, MD

Madhukar Kasarla, MD, works as a hospitalist physician with APOGEE Physicians at Parkway Surgical and Cardiovascular Hospital in Fort Worth, Texas. He also works for Texas Health Physicians Group at Texas Health Harris Methodist Hospital and Health Harris Methodist Hospital Southwest in Fort Worth, and Texas Health Harris Methodist Hospital in Azle, Texas. He did his Internal Medicine residency at Mercy Hospital & Medical Center, Chicago. For more information, please contact kasarla29@yahoo.commadhukarreddy.kasarla@apogeephysicians.com.

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Patients do not have carte blanche when it comes to decisions about their medical care. The type of insurance they have dictates which hospitals they must use, which specialists they’re allowed to see, and the type of treatments that are covered. Now more than ever, hospital and physician reimbursements are controlled by insurance companies. As a result, the pressure on physicians to contain costs and be accountable to third party payers is intense. In the process, it’s no surprise that there is a significant impact on patient care.

In general, reimbursement rates are standard and don’t take into consideration the complications and difficulties involved in individual patient cases. Physicians do their best to treat patients in the limited amount of time they have in the hospital setting. Yet, there are certain medical conditions that are prone to hospital readmissions, especially when conditions are dependent on patient compliance for improved results. Yet, even in these cases, hospital readmissions often are viewed as a failure on the part of the physician.

Additionally, there may be a blanket rule for some medical conditions that the insurance reimbursement covers only 24 hours of observation. Because of this stipulation, the burden is on physicians to discharge patients accordingly. To complicate matters, in some healthcare organizations, physicians are measured by patient satisfaction evaluations and rewarded for favorable scores. When physicians have to comply with discharge policies set by others, sometimes patients rate physicians unfavorably. They blame physicians, while it’s the hospital administration and insurance companies that mandate early release.

Another pressure on physicians comes from the denial of rehabilitation services. Insurance companies decide if rehabilitation is approved after surgery or a complicated hospital stay. When requests are denied, physicians spend precious time convincing insurance companies to reverse their positions instead of providing hands-on patient care. Likewise, physicians devote their own time to researching the benefits of using new drugs to treat medical conditions. They present their findings to insurance companies, only to have the use of these drugs disallowed for the medical conditions in question. These are difficult scenarios for physicians who diligently try to reign in medical costs while delivering excellent medical care.

 

Cost-Containment Solutions

One method for containing costs and providing top-notch medical care is to create an accountable care organization (ACO). ACOs are groups of healthcare providers, including hospitals and physicians, who work together to provide coordinated healthcare to their patients. The goal is to improve patients’ health and quality of care, while reducing healthcare costs and eliminating duplicate tests and treatments or those without proven benefits.

Another solution is to reduce the occurrence of defensive medicine—the practice of ordering additional tests and performing procedures that aren’t clinically necessary to keep patients satisfied or to prevent any future legal action. While defensive medicine might have a positive impact on patient satisfaction and can generate additional revenue for physicians and hospitals, it also escalates healthcare costs. In fact, DefensiveMedicine.org estimates that these practices account for about 34%  of the annual healthcare costs in the United States. That’s why it is important for physicians to order only appropriate tests and treatments.


No Easy Answers

There’s no easy answer to the dilemma of cost-containment pressures as physicians struggle with their roles, contend with third parties, and at the same time, maintain their commitment to quality patient care. It’s frustrating for physicians–who intimately know their patients and medical conditions–to have treatment decisions reside in the hands of insurance administrators who are unfamiliar with patients on a personal basis. As long as hospitals continue to focus on increasing revenue and insurance companies decrease reimbursements, the stress on physicians to contain costs will remain intact.

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