Employed Physicians and facility fees: I’m as mad as hell and I’m not going to take this anymore- Part 2

Here is the question that must be asked. Where is all this new money coming from?

The Answer: The money is coming from all the employed physicians FACILITY FEES charged by their employers!

And the docs are oblivious to it happy they are making more money.

The hospital systems perpetrating this power play are capitalizing on a longstanding crevice in the system, but this one is actually the size of Grand Canyon that is wildly increasing their profit. And this loophole is costing all of us except for the beloved non-profit hospital systems. In fact, they are making out like never before, but they don’t want you to know about it.

Non profit has the ring of “we are on your side”, and we protect the little people who can’t take care of themselves. In most cases this non-profit concept might actually be true, but not in the case of the non-profit hospital employers. Everyone, especially you, gets screwed except for these longstanding institutions. Even the docs are getting screwed, they just don’t know it.

Forget the ACO (Accountable Care Organization) implemented by Obamacare as the source of all these shenanigans. What we are talking about is across the board, blatant greed.

I want everyone of you to ponder this as long as it takes for the truth to settle in, because it needs to settle in loud and clear for all our sake. Once you get it, you need to get mad as hell.

So here is a simplified example of how it works. Today I see you in my private practice and I charge you for a simple visit ($150) and a set of xrays($50). The insurance company will pay me, after adjustments, etc., $100 for the visit and $35 for the xrays. That is the entire charge, no additional “facility fees” or other random charges. Please keep in mind the numbers I use here are very rough and for demonstration purposes, but close enough. 

Next week I become a hospital employee – smarter, happier, richer – and now I work out of the exact same office where I just saw you, but now it is a facility because I am employed, right? Magic! Now my salary has doubled because my loving, caring, big brother hospital will pay me more because I am important to them and their benevolent cause. But how can they pay me double, build all these new buildings, and do all this advertising? Get ready because here it comes. The increased revenue is not because there is more business or more effective billing practices as they would have you believe. Nope!  It’s because of facility fees charged for employed doctor office visits.

Now, as a hospital employee I see you in my facility office (again, same digs) and I charge you for the same visit ($150). However, the X-ray charge and other things I can charge for can be as much as 2 to 5 fold increase. In addition, you are likely to get stuck with an additional “facility” usage fee amounting to hundreds of dollars to pay for the overhead. In other words you have to pay a lot extra now for breathing the air and walking on the floor of the “facility”. And believe me, we all pay for it.

“The root of these increases are controversial charges known as “facility fees,” …. routinely tacked on to patients’ bills….because they’ve [physicians practices] been purchased by hospital-based health care systems.”

Fred Schulte of The Center for Public Integrity wrote it brilliantly, “One family accustomed to paying about $120 in out-of-pocket costs for doctor visits and other medical services was outraged when they ended up forking over more than $1,000 for similar visits, Mullin [Senator Kevin Mullin, VT] said, mostly for seeing doctors whose practices had been bought out by a local hospital.”

Furthermore he wrote “The panel noted that hospitals buying up medical practices in recent years have been tacking on facility fees that increase the patient’s bill even when the doctor is working from the very same office.” 

By one estimate, under its current reimbursement system, Medicare is paying in excess of a billion dollars a year more for the same services because hospitals, citing higher overall costs, can charge more when the doctors work for them. 

With the rapid migration of doctors from private practice to hospital employment, the percentage of outpatient visits eligible for facility fees is soaring. More employed docs, more facility fees, more money. Here is the thing: the facility fees charged for these doctor visits have been possible since 2000, but they are NEW because the more recent implementation of the ACO and hospitals luring these docs in like a dog chasing the rabbit at the dog races. Just to make sure this point is clear, this is a completely new and extra source of revenue for these hospital systems.

To be fair I must look at the other side of the argument. What is the hospitals excuse for all these new charges? Schulte wrote “The American Hospital Association argues that phasing out the payments “threatens patient access to care.” The group said that hospitals tend to treat “sicker, more complex patients” and are better equipped than doctors’ offices and should be paid more.” These same hospitals were doing quite well before they discovered the facility fee Holy Grail; they are just making a lot more now. All the while their expenses really never changed.

How do you feel about paying for luggage when you fly? Facility fees for doctor office visits are no different. 

Currently the battle to help control these facility fees is waged in the form of “transparency”. What great political wordsmith; transparency. The ACO’s are increasingly being forced to inform the patient/consumer up front about the facility fee for an office visit that has never existed before . Connecticut HB 5337 was passed this past spring with pressure brought by CT Attorney General George Jepsen. It will be implemented into law October 1, 2014.  At least this is a start. 

Alas!  In the end there may be justice. The US Office of the Inspector General (OIG) is on to this facility charge shell game and when the off-campus facility fees are stopped, Katy bar the door, because the exodus of these employed physicians will be like yelling fire in a theater. In the words of Jeff Foxworthy, it will be pandelerium. Doctors will patted on the back and told to move on to life’s work just as end-of-career professional athletes are told to do when their usefulness has ended. They might be wandering around the streets pondering what just happened with no place to go. Everybody looses except for the hospital systems!

Dr. Scott Gottlieb painted a very grime future for my colleagues, and ultimately you, in Forbes over a year ago, “If these new doctor-hospital marriages fail again, then this time around the doctors may not been able to go back to what they were doing. They will be financially stuck in these relationships. They will be unable to even raise the capital to re-start their own offices. They may have trouble getting bank loans…………The doctors will get squeezed but the real misfortunate will befall patients. We will increasingly be getting our medical care out of busy, hospital-run clinics. Our doctors will be salaried employees, more beholden to the rules that hospitals erect to manage their activities than the medical practices that they once owned.”


Gottlieb Forbes












Employed Physicians and facility fees: I’m as mad as hell and I’m not going to take this anymore. Part 1

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Every weekday I drive down a 13 mile stretch of interstate to get to my office right next to my hospital, or should I say facility. Over the last few years I couldn’t help but notice during my drive to … >> full post

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AAOS Chooses “Choose Wisely”, but Lacks Punch

Question from one of our followers on twitter, DocRockne asked us “Did ortho come up with choosing wisely campaign goals? If not, what would yours be?”

Very good question and the AAOS did come up with five practices to be questioned. I must say that while the evidence cited to support each of these five items is extensive and definitely brings into question the use of questionable treatments, the cost savings of 3, 4, & 5 are minimal at best.  I am really pleased the AAOS is on board, but this is a meager start, but a start non the less. Now to the good disruptive AO stuff. Practices I would like to see studied and placed under the microscope are:

1) The liberal use of MRI’s, especially the ones owned by the orthopaedic surgeons themselves. The MRI has in too many cases become a substitute for good old fashioned medical history and physical. This form if the investigative process was, is, and will forever be the cornerstone of the best medicine. No diagnostic test, written or digital algorithm, or Clinical Practice Guidelines will ever replace the algorithm in our head.

2) The indiscriminate prescribing of custom orthotics/arch supports is way out of control and poses tremendous unnecessary medical costs.

There are many practices that are ineffective and expensive and over time they need to be identified and Chosen Wisely. However, each treatment or test, even the five cited by the AAOS and the two I mentioned, must also be allowed to be considered on an individual basis. We just need to do our best job of using them judiciously and WISELY and you must continue to question us regarding need.

I intended to publish this answer to a question March 17, 2014, but I forgot to click the “publish” button, really.  You can’t make this stuff up.  Why do I make this point?  Because of a recent article in the Washington Post In the Health, Science & Environment section called Doctors Overlook Lucrative Procedures When Naming Unwise Treatments came one month later.

I’m not sayin’, I’m just sayin’


The Bad Rap on Inflammation- Part 2: The Orthopaedic Groundhog Day


Many orthopaedic inflammatory diagnoses are mechanical problems first that create a normal inflammatory response. You might not be getting better because you are treating the wrong thing, the inflammation, and the underlying mechanical cause is unknown, undetected or being ignored.

Fix the mechanical problem and you fix the inflammation

This is where inflammation gets its bad name. If the inflammatory response is allowed to be recycled over and over as a result of recurring mechanical micro-trauma, then you develop an itis, which can result in annoying to debilitating problems and pain. These are the problems that can be elusive in diagnosis and often seem impossible to solve. They are definitely quality of life changers. This is often and generically referred to as chronic inflammation.

Just like in Groundhog Day, you keep waking up to the same problem day after day.

Of course there are identifiable, known abnormal types of external mechanical forces or repetitive movements that cause inflammation. We call this “overuse syndrome”. This can be seen in the typist who develops carpal tunnel syndrome or the tennis player with a poor backhand stroke who develops tennis elbow or the runner logging way too many miles per week who develops knee pain. With overuse syndromes we treat the inflammation to palliate the pain and we “shut down”, or modify, the “overuse” activity (the cause) and the problem usually resolves.

Then there is the inflammatory response to osteoarthritis or “wear and tear” type arthritis. This is a case where the underlying problem, the joint cartilage damage, is irreversible and the inflammation will typically get worse. Until surgery is required, treat the inflammation!

What about inflammatory problems that result from mechanical imbalance issues that are subtle and not readily apparent?

The problem is your doctor

I am talking about issues like tendinitis and bursitis that just won’t go away seemingly no matter what we do. These are the problems that we doctors far too often do not know or don’t care to ask the question “what is the underlying cause that is creating this inflammation?” Inflammation does not just appear by magic! For example, elbow problems (ulnar collateral ligament) in MLB pitchers are due to acceleration issues in pitchers attempting to retain their pitch speed. Is this all there is to it, just some dude trying to throw harder, or is it a compensation resulting from poor shoulder mechanics or even lower extremity mechanics as the source of velocity loss. Fix the real problem causing the compensation–the shoulder—and the elbow at least has a chance to fix itself. Cause and effect! Let it go too long treating only the elbow and the result will be Tommy John surgery. This kind of subtle mechanical imbalance is where your physical therapist and athletic trainers are particularly valuable. Sure, they manipulate, massage, crank, and dig on our bodies to great effect, but their skill in knowing and detecting the subtle remote, seemingly unrelated mechanical imbalances is where they really shine. Determine the cause and you can effectively solve the resulting problem or the “-itis”.

This is where we docs screw it up. The primary cause is not known or detected, so we “blindly” treat only the end result or inflammation. And this happens all too often. We can make you feel better by treating the inflammation (with ice, rest, NSAIDS, etc), at least for a while. However, the inflammatory process rages on because the primary problem is not addressed. Now you have the orthopaedic version of Groundhog Day. Only treat the inflammation and you will usually lose.

The next time you are told you have a chronic inflammatory problem, such as lower back pain, Achilles tendinitis, greater trochanteric bursitis, etc., ask yourself, ask your doctor, or, maybe best, ask your trainer or PT what the hell is really going on here. Just make sure you listen.

Maybe the problem is you

Sorry to point this out, but you are often part of the problem. Here is the thing, we usually do know the underlying cause, but it is not so readily apparent to you. And you might not like the answer because, after all, you’ve got a serious problem that we fail to fully comprehend, and in today’s instant gratification society you just want us to make it go away so you can move on. Go ahead and symptomatically treat the inflammation with NSAIDs, injections, immobilization, rest, etc, so you can feel better now. But don’t stop there, especially when you’re feeling good, because your real problem is not gone.

Here is my recurring problem. The tightening of the calf is THE singular cause of twenty problems in the foot and ankle. To name a few, these would include plantar fasciitis, Sever’s disease, insertional Achilles tendinosis (Haglund’s), night calf cramps, Charcot midfoot arthropathy, 2nd MTP synovitis and subsequent hammertoe formation, and posterior tibialis tendon dysfunction. Lengthen the calf by surgical means, or better yet, lengthen the calf by stretching and these problems are solved because the “unknown” mechanical problem is reversed. Stretching calves is not sexy and it takes time and effort, but it works.

So, here is my point. When we tell you to stretch your calves to fix your plantar fasciitis or strengthen your core for your back pain or to strengthen you shoulder external rotators to fix your shoulder impingement listen and do it. No matter how illogical or disconnected the exercise might appear, it might be just that simple and it might be all you need to do to solve your real problem: your bad mechanics.

The Bad Rap on Inflammation- Part 1


Somewhere along the way the term inflammation got a bad name. Inflammation can’t be good, right? At least this is what most people think.

Inflammation is actually an essential part of every reparative process. It is how our bodies heal and fight back. It is how we recover from trauma, surgery (organized trauma), cuts, broken bones, infections, etc. Inflammation is a good thing.

You have to admit that when you hear the word “inflammation” you think bad thoughts. “Oh God, did I hear you say I have inflammation?” Next time you hear this, stop and be grateful that your body orchestrates such a beautiful response to all the abuses we bring upon it!

Generally speaking, when the inflammatory process is pressed into action and it is permitted to “fix” the insult (cut, blunt trauma, sprain, etc.), things get repaired and your boo boo gets better: problem solved and you move on.

Click here for more inflammation information

Not all inflammatory responses are created equal

That said, too little or too much inflammatory response can be a bad thing, indeed.

1) If you don’t mount an effective inflammatory response when needed, you are potentially at risk of more serious consequences. Just ask anyone who is or has been on chemotherapy, or anyone with an immune deficiency disorder such as advanced AIDS. This is really scary stuff indeed.

2) On the other hand there are plenty of very ugly disorders, e.g. autoimmune diseases, where our bodies over do the inflammatory response and our immune system attacks the host (us): rheumatoid arthritis or Crohn’s disease to name just a couple.

3) Let’s not forget the normal inflammatory response that accompanies a viral or bacterial infection or one traumatic event. Did you know that most of the symptoms, such as fever, malaise, muscle aches, etc., that you encounter when you have an infection, a cold or the flu are a direct result of the inflammatory response, not the infection itself? This is a good and necessary response to have, but it is what creates the symptoms. It also fixes the problem. This is what we would call acute inflammation.

So, what am I all angry about now?

When it comes to those athletic or mechanical type inflammatory orthopaedic problems like plantar fasciitis or Achilles tendinitis, your doctor may be treating the WRONG thing. Stay tuned for part 2, to find out more and the Orthopaedic Groundhog Day.

Dangers of the December Deductible Deadline

I would guess most docs, particularly surgeons doing elective surgery and procedures, view this time of year as nothing but good, at least for them. Docs are working long hours trying to fit in all those patients before the end of the year, and more importantly, before these patient’s large annual deductibles reset January 1. My surgical schedule was filled through the end of the year on November 12th, so I turn them away. One could imagine the disappointment of being told that the surgery they wanted and deserved, the calculated savings they were looking for are not going to happen. While this problem has been going on for years, it is growing with the growth of tax exempt, larger deductible health plans.

The bigger picture here is the end of the year rush might have some undesirable side effects to both doctor and patient.

  • All the extra work, possibly being rushed at times, is likely not conducive to doing our best work. Argue this point all you want, but too much packed in, day after day, can’t be a good thing for outcomes. To put it bluntly, we might not be doing our best work in December.
  • Patients may choose, actually pressured to be placed in harms way by succumbing to undergoing procedures they might not need. Money can be an excellent deterrent blocking us from unwanted purchases. When was the last time you bought something on sale at a store because it was calling your name, only to get home, climb out of your sale induced fog, and discover what you bought is not at all what you wanted? Unlike surgery, you can return the unwanted item that you bought.
  • For us, the holiday season is shot if we let it happen, spending too much time away from family. And it will happen because we are more than happy to put in the extra hours to help our patients. Right? And this goes both ways; medical people and patients are both caught up in this predicament.

All of this quandary is due to two things: the high deductible and the calendar year end on December 31st. Together they are a problem, apart they are harmless, if not good. This is a trend that is only going to increase, at least in the foreseeable future.

Working the annual deductible will not change for good reason, but it does not have to be all at once, all in December.

Note to the healthcare payers: please set up a system of rolling annual deductible deadlines. This could be easily done by random draw, birthdate or even quarterly. So, my deductible deadline might be November 1 and yours might be May 1.

Or you could just avoid elective procedures until after mid January. We will need a couple of weeks to recover after December.