As a person who prides myself on a reasonable command of the English language, I am always delighted to add another new word to my lexicon. As I began my journey with Allied Citizens for Healthcare Equity, ACHE for short I brushed up against many mysterious terms, the lingo of the fuzzy world of health insurance.
Sure enough, strange words emerged in conversations. Try this
one- monopsony.
Any seven-year-old who has ever tried to buy Boardwalk or land
on Free Parking knows what Monopoly is. It's a cutthroat game
where you try to buy up all the property so that when somebody
lands on it, you can really stick him or her by taking all his
money. In a monopoly, there is only one winner. So while a monopoly
controls the services and prices to those individuals who actually
USE the service, a monopsony is the first cousin to the monopoly.
Under a monopsony, the PROVIDERS of the goods and services are
controlled too. It's sort of like they get you coming and going.
Here's a real life example. Here in Montana, most of us have healthcare coverage that is either underwritten or administered by one huge company. Even though it's not for profit, and pays no premium taxes the way other insurance companies do, it has reserves of over $71 million dollars. Other companies in Montana are pygmies in relation to this Goliath. You should see the pie charts of the staggering amount of lives they cover as opposed to their next largest competitor- it's really eye popping. This huge market share creates the monopsony effect. With most insured Montanans being covered by this one behemoth, the physicians who treat these insured people when they are sick or injured are advised in no uncertain terms that they had better learn to 'play ball' with the company. And because they are so big and can control such a huge portion of a physicians income, many doctors do just that. IN many cases, they just about have no choice. And so they agree to accept as full payment whatever the mega-company decides it will pay. If the company doesn't reimburse a physician what the doctor believes his services are worth, too bad. He has to, as a preferred provider, accept as payment in full whatever the insurance company decides is fair. So why would a physician become a 'preferred provider"? Because if he doesn't and his patient is one of the 300,000 Montanans who are serviced by this one company, he will, as a non-participating provider get reimbursed considerably less than his cooperative brethren, and the company's check goes not to the physician who provided the service, but to the patient who is then supposed to pay the doctor. And thousands of Montanans do just that, every time. They do the right thing. They pay their bills. It's the way most of us do things here. But not everybody. Some people will take their check and buy groceries, make a payment on their boat or go to Bermuda. So for every patient that doesn't do the right thing, the physician is stuck eating the loss. At least temporarily, after a time, he has no choice, but to raise his fee schedule to the people who do pay. It's really no different than shopping for groceries; into every price is embedded an increase that is due to those who freeload by shoplifting.
So the pressure is on for the physician to sign up as a participating provider. IF he doesn't he risks being demonized by the insurance company as greedy. What the company does is to ask their participating providers to accept as their total payment, say 80% of the 'usual and customary rate' for any given procedure. Since these physicians generally graduated in the top 10% of their class, and were probably pretty decent at math, their logical question is 80% of what number? In other words, what is the usual and customary charge for a certain procedure? The answer from the company never varies: "We won't tell you". Not that they can't, they just won't. Insurance companies believe that this is what is known in the trade as proprietary information, you know, a trade secret. So physicians are asked to provide a service that regardless of what they or their patient think that it is worth for whatever the company decides they want to pay. Not a particularly good deal by any means, but in some cases, it may be the only game in town.
And that's the problem. There needs to be more competition
in the health insurance industry in our state. There being only
one big kid on the block hurts everyone, patients, physicians,
employers and workers. No one gets a better deal but the lone
big guy.
The Montana State Legislature took a stab at clarifying this UCR
question for the consumer, but by the time the insurers were done
fouling it up, it doesn't do much, I suspect. More confusion.
I recently spoke to a bright young man who has a family who is
going to have some serious surgery next week. While he would most
likely be most interested in reassuring his loved one this nerve
wracking these last few days, he has been on the phone and fax
with this insurance company, pleading for them to pay the a physician
independently described as the best in the business for this type
of case, to be properly reimbursed for the delicate surgery that
awaits. This particular doctor's offense? He's not a preferred
provider and doesn't care to play ball with biggest kid on the
block. All he really wants to do is to get paid for a job that
will tax his extensive, expensive education and expertise. All
the guy on the phone wants is for the person he loves to have
the best possible care available.