Why I walked away from a salary, great benefits, and a position at a renowned university hospital system for the world of entrepreneurship and private practice.

A physician friend shared an article with me this week quickly served as a good reminder as to why I chose to leave main-stream health care organization and enter the world of entrepreneurship by opening a private practice.  There are times I feel crazy for leaving a salaried position with benefits that someone would kill for, including a 15% 401k match, qualification for loan forgiveness based for public service (more on this cluster-truck in a future blog post), and free tuition, for me and my children, to a top tier university.  

 

I haven’t shared my why with many, but this article summed everything up so perfectly I decided it was time to share. The article written and published by the Private Practice Physicians of America explaining the reasons why they feel our health system is failing, and propose how to fix it.  The statements and recommendations are based on sound evidence and publications such as the World Health Organization.  Reading their reasoning and proposed solutions was as if someone took the words right out of my mouth, or found the pros/cons scratch pad that I scribbled thoughts on for months leading up to the decision to resign from my seemingly perfect, safe, position at a leading, university based, hospital system.

 

This article was validation that I did, and I am doing the right thing. I'm taking the road less traveled. I believe in something better. I believe we should shop for our providers, and find the best provider for our own particular situation. I also believe as consumers we have an individual responsibility to price shop providers and procedures.  Providers should be focused on quality care and time spent with patients, not documentation, or hospital and insurance based regulation. Hospital systems and insurance should not dictate where, or how we practice, nor should it dictate the duration each of our appointments. 

 

The first thing that popped in my head was this Steve Jobs quote,

 

"Here's to the crazy ones, the misfits, the rebels, the troublemakers, the round pegs in the square holes ... the ones who see things differently -- they're not fond of rules, and they have no respect for the status quo. ... You can quote them, disagree with them, glorify or vilify them, but the only thing you can't do is ignore them because they change things. ... They push the human race forward, and while some may see them as the crazy ones, we see genius, because the people who are crazy enough to think that they can change the world, are the ones who do.”

 

Yep, thats me. I'm trying. I am an independent provider. I own a private practice, and I chose to remain out of network with all insurance companies. My clients and athletes self refer and self pay, fee-for-service. 

 

Sometimes I wonder what would happen if tech leaders were spearheading the reform of the health care industry. If you've graduated from med school, allied health, or school of dentistry you know we don't get much education on the inner-workings of running a business. If you work in the health care industry, then you also know many managers and admin leaders don't possess business or admin degrees and/or experience . Managers and admins are providers promoted along the way. We were meant to help people, with physical and mental problems, not run a multi-million dollar business or reform the countries access to medicine.  Needless to say working in the health care industry has been a wild ride over the past 10 years. I often ask my coworker with 20+ years at the hospital how she has weathered the storm.

 

After 10 years I decided I was done guessing what tomorrow would bring, wishing it would get better, and wondering if I could stand another 25 years. I decided to take control of my own destiny.  I again thought of a Jobs quote, actually a speech, from 2005 at the Stanford University commencement.

 

He reminded us, "Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. If you haven't found it yet, keep looking. Don't settle. As with all matters of the heart, you'll know when you find it…. and “Remembering that I'll be dead soon is the most important tool I've ever encountered to help me make the big choices in life. Because almost everything -- all external expectations, all pride, all fear of embarrassment or failure -- these things just fall away in the face of death, leaving only what is truly important. Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose. You are already naked. There is no reason not to follow your heart. ... Stay hungry. Stay foolish.”

 

Find that speech. Print it out. Tape it to the back of your bathroom door. Read it every day.

 

Now for the cliff notes version of the article that prompted this blog post. You can find the full text here, but its long, and filled with medical jargon. I decided to save you some time, and sanity so just keep reading.

 

According to the World Health Organization, Americans spend more per capita on health care than any country in the world and the average U.S. lifespan is still declining.  Our U.S. lifespan is now shorter than 30 countries.  Health-care consumes 18% of our nation’s gross domestic product and one fifth of the average family’s household income.  Another interesting fact, providers account for only 8 cents of every health-care dollar, yet somehow, they get blamed for rising health-care costs. As costs escalate the focus needs to shift to the other 92 cents. The other 92 cents is spent on our failing system: hospital systems, even those claiming to be nonprofit, and insurance companies.

 

The regulation, consolidation, and monopoly that hospital systems and insurance companies are creating is driving doctors away from practice by increasing their pressures, while decreasing their pay and autonomy. America’s over-priced and unnecessarily complicated health-care system is destroying our economy, crippling our middle class, and driving out doctors. As the bureaucratic burden rises for physicians, they are opting to leave clinical medicine, retiring early and dissuading the best and brightest students from the profession, all while we face an aging population that will need more not fewer doctors. Providers are not the problem, but somehow they’re stuck in the middle, and uniquely poised to be part of the solution.

 

 

Why?

1. lack of price transparency.

Cash pricing for all services needs to be the standard. The fact that 90% of all health-care payments go through a third party keeps both patients and doctors alike in the dark about what health care costs. For consumers to be good stewards of their health-care dollars, and for doctors to be allowed to make prudent decisions, pricing must be clear. Representatives from both sides of the aisle have introduced HR 4808 a pricing transparency bill to that effect.

 

Hospitals operate as businesses with no incentive to keep costs down. Hospitals train their employees on ways to internally refer to in-system specialists, surgical centers and rehabilitation facilities. They train billing officers to up code where possible when generating bills to generate higher reimbursements. In areas where one health system has a monopoly, patients have little to no choice, and prices can be ten times higher than costs for the same care at independent centers.

 

 

 

2. Top-heavy hospital administrations.

Between 1970-2010, the number of health-care administrators grew 3000% according to the Bureau of Labor Statistics, while physician’s growth was only 200%, and U.S. health care cost increased 2300%. Think about that for a second….

 

 

 

 

Greater than 1million health-care admin jobs were created, largely to manage the additional regulations related to the Affordable Care Act . What were left with is hospitals filled with executives and managers who provide no patient care, but take home a generous portion of the health-care dollar.

 

One of my previous managers, who was in the office for maybe 15 hours out of a 40 hour work week, provided 2-4 hours of patient care, took home close to 200k. Yet, staff therapists are double and triple booked (tell me how they can provide good, quality care in these conditions) treating 12-20 patients a day, 40 hours a week, spending 10 extra hours a week on paper work, taking home 55-65k a year and struggling to pay student loans.  When we found out that staff therapists are 300% productive, meaning we made 3x our salary or more for the hospital system in profits based on reimbursement it was only fuel to the fire. Why? Its not because I wanted more money, sure that would be nice, but what I wanted more was the chance to provide excellent, quality care to 1 or 2 patients an hour, not 3 or 4. Physicians have it worse; their average face-to face time with patients is somewhere around 7 minutes. That 7 minute appointment usually cost a couple hundred dollars, and gets you to a referral to yet another doctor or specialist. It’s a never ending cycle. Read my previous blog post for more on that topic.

 

3. Insurance.

Coverage is not Care. Insurance coverage gives Americans peace of mind because it is perceived as care, though it’s not. Mandated coverage has led to much higher deductibles, premiums and copays. Escalating premiums and deductibles are crushing our middle class, who are spending 20% of their household budget on health care, which they still cannot afford to access because they can’t afford their deductible. As mandated coverage increased without transparency of cost, hospital systems and insurance companies have quietly profited with both hospital and insurance executives earning seven, and even eight-figure salaries.

 

Insurance contracts are confidential and they contribute to the lack of transparency in costs. Furthermore, the need for prior authorization (often from non-medical personnel) undermines doctors’ authority to choose what’s best for the patients. In the United States, nurses and doctors spend just over half their work week (21+ hours) on insurance related issues, time that would be far better spent on patient care.

 

Just as hospitals have no incentive to keep medical costs down, neither do insurance companies. One of the mandates in the Affordable Care Act, the Medical Loss Ratio provision, inadvertently rewards insurance companies for raising their prices. Requiring insurance companies to pay 80% of all premiums toward claims and retain only 20% for profits. This sounded good in theory, but insurance providers quickly figured out that the higher their premiums, the bigger their 20%. Predictably, insurance premiums have soared since the Affordable Care Act took effect.

 

4. Excessive regulation.

For every two hours a doctor or nurse spends on patient care, he or she spends three hours on a computer entering electronic medical documentation. Researchers from Dartmouth-Hitchcock health system found that 27 percent of the office day is spent on direct clinical face time with patients and 49.2 percent documentation. Documentation required deprives patients of access to their over-burdened doctors, and indirectly drives up their costs. Independent doctors each spend on average $32,000 a year to own, operate and maintain the hardware and software required. Ironically, the “Quality Data” generated for the government are neither being analyzed nor justified as to how or whether they improve or impact care, further proving that this data-gathering is burdensome busywork.

 

5. Too much consolidation.

Hospitals buy independent medical groups to capture market share, eliminate competition, which increases their bargaining power with insurers. Service that cost $500 in an independent practice, after an acquisition costs 5-10x more. This markup benefits hospitals at the expense of the patient and taxpayer. Hospitals argue that they need to maintain their higher overhead. The Medicare Payment Advisory Commission has long recommended site-neutral payments which requires the same charge for the same services regardless of where those services are performed would dramatically reduce health-care spending. Analysts estimate that equalizing rates in 66 common categories, and paid hospital outpatient departments the same as private doctors or only slightly more, net health-care spending would go down $900 million a year.

 

Site neutrality would also help keep America’s doctors independent, which would help preserve and restore the patient-doctor relationship. If independent doctors received the same reimbursements as hospital-employed doctors for the same services, hospitals would not be incentivized to buy medical groups, and doctors would be less inclined to become hospital employed since hospitals can afford to pay doctors more than these doctors can make in independent practice.

 

6. The so-called Non-Profit. 

In America, 62% or 3,900 of our hospitals and health systems are "non-profit." In other words, they are tax exempt. Worsening the situation, every time a nonprofit hospital buys a for-profit medical group or freestanding center, the taxes that entity once paid into the community come off the tax rolls. Nonprofits are decimating their communities by eroding the tax base. These institutions pay no property tax, no state or federal income tax, no tangible personal property tax and no sales tax. Yet, many of the executives at these hospitals receive seven-figure salaries, enjoy skyboxes and luxury retreats, and host extravagant galas to fundraise.

 

 

Their Proposed Solutions:

Hospital Systems:

-Make health-care pricing transparent. Require hospitals to post cash prices. Pass HR 4808. Also require that all entities be transparent regarding the sum of collected revenues, and who is receiving those revenues.

-Require site neutrality. The cost of care should not change based on where that care is provided.  Help consumers shop for providers. Reduce the incentive for hospitals to acquire doctors slowing consolidation, and preserve independent doctors, and greatly reduce costs.

- Allow physicians the ability to see economically disadvantaged patients and which should be the only charitable care given and deducted.

- Remove barriers that prevent providers from practicing in a independent practice.

- Deter health-care consolidation. Prohibit further hospital consolidations both vertical and horizontal.

-Stop the tax-exempt status abuse of nonprofit hospitals. Either require them to provide true charitable care calculated at Medicare Allowable prices or pay taxes.

 

 

Insurance: 

-Repeal legislation that prevents the growth of direct pay care

-Allow Medicare and Medicaid patients to opt for direct pay care

 

 

Information Technology:

-Streamline regulatory requirements, coding and claims.

 

 

Author Bio:

Dr. Erika Patterson, PT, DPT, OCS

Dr. Patterson is a Doctor of Physical Therapy, APTA board certified Orthopedic Clinical Specialist,

with advanced certifications in manual therapy, dry needling, RPR, and specializes in Endurance & Multi-Sport Athletes. 

 

 

 

 

 

 

 

 

 

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