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Insurers Try to Deflect Blame toward Doctors

Elyas Bakhtiari, for HealthLeaders Media, August 13, 2009

After struggling to control the healthcare reform debate this summer, the Obama administration recently ratcheted up rhetoric against health insurance companies, hoping to make its narrative more compelling by adding a villain to rally against.

But insurers, represented by America's Health Insurers Plans, aren't quietly submitting to the new role. They've poured millions into public relations and have worked with the administration in an attempt to clean up their image. And knowing they can't successfully fight back aggressively against the president, they are now instead trying to divert the blame and anger to someone else: Physicians.

At least, that seems to be the point of a recent survey released by AHIP that portrays physician charges, rather than insurance industry practices, as the driver behind rising healthcare costs.

AHIP asked insurers for information about some of the highest bills submitted to them in 2008, and the results are certainly eye-catching. The New York Times took the bait in an article that highlights a $12,712 bill for a cataract surgery (Medicare only pays $675 for the procedure), a $20,120 charge for a knee operation (Medicare pays $584), and a $72,000 fee submitted by a physician for a spinal fusion (Medicare fee: $1,629).

The organization admits that it didn't collect data on the frequency of such high fees, so it's not quite accurate to call it a survey—surveys are meant to be representative, but this is a deliberate cherry picking of outliers.

Do some doctors submit outrageous bills for out-of-network procedures? Yes, it happens. But to suggest physician charges (which often aren't fully reimbursed) are primarily driving healthcare costs is dishonest.

In fact, another survey released this week by the Medical Group Management Association shows that most physician practices are struggling financially as operating costs rise more rapidly than revenues. Some of their biggest challenges include collecting what they are owed from patients and negotiating contracts with insurers.

The real problem the AHIP survey highlights is the lack of transparency in the healthcare reimbursement system, and the problem is not limited to physician charges. Doctors often submit a bill not knowing how much the insurer will pay, or if it will pay at all. Patients are also typically in the dark, both about what the physician will charge and whether the insurer will deny their coverage.

Healthcare consumerism has failed because no one involved can figure out the pricing system. Insurers can point fingers at physicians, but that doesn't absolve their portion of the blame in the problem.

Deflecting the anger to physicians may backfire if doctors take up Obama's call to arms against insurance companies in retaliation. Polls show that Americans trust physicians more than other group to recommend the right thing for reforming healthcare.

The group they trust the least? According to the Gallup survey, aside from Republicans in Congress, it is health insurance companies.


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Elyas Bakhtiari is a freelance editor for HealthLeaders Media.

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