Clip-N-Save: Your Healthcare Under the Affordable Care Act

Posted 03/24/2014

A hip replacement should not cost $13,000 in Iowa and $130,000 in New Jersey. That’s just crazy. Virtually everyone agrees that under our existing healthcare system the price of services–from a five-minute office visit to an appendectomy–needs some kind of regulation and standardization. And yet the standardization of prices is definitely not the same as the standardization of care.

Yes, there are some basic accepted rules about treatment: a patient with a sore throat who calls the office for an appointment can be scheduled for five minutes and the doctor reimbursed appropriately. But what happens if that same patient also wants to discuss other health issues, bursts into tears because she’s being abused at home, or is found to have high blood pressure and needs a lengthy office visit?

Standardized cookbook medicine, erotic dream of every insurance company executive, is virtually impossible, though to some extent both pricing and care standardization have already been put in place by the health insurance industry.

• In the HMO (health maintenance organization) model, your doctor is paid in advance for your care and financially rewarded only if she keeps costs low by not spending any money on you. If you take a sore throat to your HMO doc you’ll get a five-minute visit, an exam, a strep screen, and, if it’s positive, a generic antibiotic. Because the HMO doctor does the bare minimum, she keeps most of the money the HMO has prepaid her.
• In the PPO (preferred provider organization) model, your doctor has no restrictions concerning how much she spends on you, but she’s under contract to accept the insurance company’s fees for her services. Once she signs a PPO contract, she’s referred to as an “in-network physician.”  If you take a sore throat to your PPO doc you’ll get more: a 15-minute visit, questions about the health of other family members (and the suggestion that they too come in for strep screening), a blood test for other causes of sore throat such as mono, and questions about still other potential causes of sore throat, such as whether you have GERD (gastroesophageal reflux disease/heartburn). This visit costs the insurer more money and reduces bottom-line profits. The insurance companies want this type of patient-physician encounter to disappear forever.

How will the Affordable Care Act (ACA) change your health coverage?

By eliminating the fee-for-service PPO and placing you in a quasi-HMO called an ACO, or accountable care organization.

Yes, back in the ‘80s and ‘90s Americans hated their HMOs. They disliked endlessly being told what they couldn’t have. (“I’d like my vitamin levels tested.” “Sorry, your HMO won’t cover that.”  Or “My child needs a bone marrow transplant to live.” “Sorry, no.”)

Indeed, this attitude toward HMOs is something both the insurance companies and the framers of the ACA had to deal with. And so they created the ACO, essentially an HMO hybrid. That’s right. Keep in mind that anytime you read ACO you should basically think HMO.

The good news? With the new ACOs, you can choose to go out of network.

During this transition, your in-network PPO/HMO doctor will become your in-network ACO doctor.  If the vast majority of PPO fee-for-service physicians disappear as planned, what’s the difference between choosing an HMO doc and an ACO doc? Good question, and for you, the answer is “not much.” In fact, someone remarked recently that an ACO is simply an HMO in drag.

The main difference between the two is that when you were enrolled in an HMO you simply could not go out of network. When your HMO doctor said “no” to something you wanted, then financially you were on your own.

The way the law is currently written, your primary care doctor will likely be in an ACO, but you’ll have the right to go out of network and your policy will cover some out-of-network benefits.

The upside of in-network providers

When you, the patient, select a physician in your insurance company network, you have the real advantage of knowing that once you’ve met your annual deductible and co-pay there won’t be a lot of surprises when it comes to costs. If you keep yourself healthy, you’ll probably not even notice that it’s taking longer and longer to get an appointment or that your doctor visit seems shorter. If you’ve got chronic medical problems that require constant monitoring (like insulin-dependent diabetes or cancer chemotherapy) and you need to see a physician frequently, having a network physician is definitely more economical.

But I’ve discovered that most patients don’t fully understand what it means to see a physician who’s not in their network or why they should even consider it. Yes, it costs more. But generally, sort of like buying new tires or paint, you get what you pay for.

What are my out-of-network options? Concierge practices and independent physicians.

Out-of-network example #1: the concierge practice
A small but growing number of out-of-network physicians have reconfigured themselves as “concierge” or “boutique” practices. You’ll see more and more of these in upper income, especially urban, areas of the country. It’s estimated that 8% of primary care practices will shift to concierge style over the next few years. The concierge physician limits herself to a small but fixed number of patients, usually fewer than 300. She charges an annual fee, anywhere between $500 and $3,000 a year, and in return she agrees to be accessible 24/7, either by phone or email, and arrange for a same-day appointment in an emergency.

Otherwise, her charges are similar to other primary care doctors in your area (office visits, labs, etc.). A concierge doctor bills your insurance company as an out-of-network provider (meaning she’s not locked in to the fees of her contracted peers) and you’re responsible for any charges your insurance doesn’t cover. With 30 million new enrollees under the ACA, you can expect medical offices to be crowded. Basically, enrolling in a concierge practice buys your doctor’s attention.

Clearly you need to be fairly well off to enter a concierge practice.  And no, WholeHealth Chicago is not considering a concierge model.

It’s important to know that patients in a concierge practice must maintain their conventional health insurance, though they often save money by selecting high-deductible or even HMO plans. The conventional policy covers labs, x rays, emergency room visits, hospitalizations, and specialist referrals.

Out-of-network example #2: the independent physician
Far more common than the concierge practice, however, is the out-of-network physician who bills your insurance company for a portion of the medical services she provides. The insurance company then reimburses her according to the out-of-network guidelines written in your policy. People rarely read their health insurance policies, but were they to do so they’d discover a whole section devoted to this.

What most patients don’t realize about out-of-network physicians is that their bill applies only to professional fees and uncovered lab tests (like food testing, salivary hormones, etc). In an attempt to keep your care affordable, your out-of-network physician orders routine lab tests and virtually all x rays, CT/MRI scans, hospital admissions, and specialists from providers approved by your particular insurance network. Patients worry that by seeing an out-of-network physician all services will be out-of-network, but this isn’t the case. Half our patients at WholeHealth Chicago are out of network and we’re very sensitive about using services (especially labs) and specialists that will receive nods of approval from their insurance network.

One very much overlooked aspect of using out-of-network care is for a patient to tap into any Health Savings Accounts (HSAs) that might be offered by her employer. Many patients contribute to their HSA and draw on it to cover out-of-network expenses. With a good HSA, you might discover your out-of-pocket costs between in-network and out-of-network are pretty much the same. 

Here’s a summary of what I recommend

1. If you’re in-network somewhere and happy with your in-network doctor, then stay there. If you’ve got a medical problem like high blood pressure, heart disease, or diabetes and you need frequent visits, this is by far the most economical and efficient way to set up your health care.
2. However, if you sense something is missing from your current provider it’s time to consider a change. That missing something might be the length of time your doctor spends with you (“I’m only seen for five minutes”), attentiveness (“she sees so many patients I don’t think I’m being listened to”), concern about preventive care, referrals for alternative medicine, or interest in/knowledge of nutrition. Or it simply might be that you’ve been feeling crummy for a long time and keep hearing “we can’t find anything wrong with you.” If this describes you, seeing someone out-of-network might be a better decision.
3. Understand you have two insurance policies combined, one for in-network coverage, the other for out-of-network services. Many patients simply use both as the need arises. They’ve got an in-network primary care doc for sore throats and upset stomachs, wellness exams, and Pap smears, and an out-of-network provider for chronic symptoms that get the short shrift in a busy in-network office.

What’s in store for WholeHealth Chicago

As most of our patients know, we’ve been out-of-network with every insurance company except Blue Cross since we’ve been in existence. It’s also true our style of practice–long visits, functional testing, integrative care, and understanding the mind-body connection–has always set the collective Blue Cross teeth on edge. They actually believe we spend too much time with our patients and order tests that seem unnecessary for basic patient care.

As I mentioned in a previous Health Tip, Blue Cross recently started sending us mailbags full of letters asking why we’d ordered vitamin levels, why we needed to spend so much time with patients–why, why, why? The fact that our goal is to keep our patients healthy–out of hospitals, off operating tables, and not reliant on the pharmaceutical industry– doesn’t impress them. They want speed.

Let’s just say our current relationship with BC/BS is dicey. Like all health insurers, to them the ideal in-network doc works fast, orders the same teaspoonful of tests (blood count, metabolic and cholesterol profiles), renews the patient’s statins, blood pressure meds, and antidepressants for another year, and reminds the patient to lose weight and exercise more. Next patient, please.

This is the network HMO-ACO model. By trimming its network of outliers (like us) and leaving behind the speed demons, Blue Cross will have its own ACO ready to compete with those of Advocate, Northwestern, and other Big Boys.

Speed? I walked away from speed decades ago when I left the medical directorship of a 50-physician group handling almost 20,000 HMO patients. Never again.

Be well,
David Edelberg, MD