'A Little Better All the Time (It Can't Get More Worse)'

Both sides agree that there’s been a de-escalation in tensions in the insurer–physician relationship over the past decade. But it isn’t all sweetness and light now, either.

Frank Diamond
Managing Editor

Start saving for med school, mom: After delivering Ryker Lee Derr the previous night, Robert Wergin, MD, stops back by the hospital to check in on new mom Kristen Derr and discuss infant care.

© 2015 Sheri Porter/AAFP News.

Was a time when you couldn’t pick up an issue of Managed Care without seeing the phrases “hassle factor” or “physician buy-in” or “backlash.” The physician-health plan relationship dominated coverage here 10 to 15 years ago as much as the Affordable Care Act does these days. Our ears were always to the ground, too, straining for rumors of peace.

Back to the Future: Managed Care, March 2003

Longtime readers will remember the beautiful cover of August 1998, the one with the dove flying above it all. Then there was our reproduction in March 2003 of Edward Hicks’s famous painting, The Peaceable Kingdom, with the lion and the lamb just chillin’. About the only thing we didn’t throw out there was Neville Chamberlain promising “peace for our time,” which might actually have nailed it considering how the original statement played out. Our headlines varied, but we could have just as easily used the Ladies’ Home Journal “Can This Marriage Be Saved?” for every story. (Not multiple choice.)

Sneaky good

Well, turn your head for just one decade and the next thing you know…

The feeling that there’s much less insurer–physician tension is not your imagination, says Ron Brooks, MD, a senior network medical director at Independence Blue Cross in Philadelphia, who deals with physicians all the time. For one thing, the doctors who began practicing in the last decade or so grew up with managed care as patients themselves, which he says has made them more accepting of it as health professionals.

“They embrace the concept of doing the right thing at the right time at the right place,” says Brooks. “They never had that period where they could just do whatever they wanted because they said ‘I’m the doctor and that’s what I recommend. That’s all you should need in order for this test to be paid for.’”

Our first conversation with Ron Brooks, MD, was in May 2000. Medical Director: A Typical Day Requires Both Strength and Tact

It’s not true that there are two sides to every story: Often there are many. Also, even if there are only two sides, they should not always be given equal weight. (Side 1: The Earth is approximately 4.6 billion years old. Side 2: The Earth is flat.)

However, the insurer-physician narrative sits comfortably with the cliché. Robert L. Wergin, MD, is a family doctor in Milford, Neb., which is about 25 miles west of Lincoln. Wergin also happens to be a past president and current board chair of the American Academy of Family Physicians (AAFP). After a lengthy discussion in which he unloads about insurers, Wergin admits that things have changed. “The relationship is more collegial now,” he says. “But there are still issues… ” Which he will get to in just a bit.

Meanwhile, Brooks wants to point out that Independence bases its coverage policies on evidence-based guidelines, which are accessible online to doctors. For example, if a patient complains of back pain and the doctor wants to prescribe an MRI, the guidelines say whether it is advisable to wait two weeks to see if the symptoms abate or if the test should be done right away. If the doctor indicates that the patient meets the guidelines for having the MRI immediately, such as loss of strength or sensation, then Independence automatically approves the test. Upshot: no hassle factor.

Constant contact: Brooks estimates that he has a face-to-face (or phone) conversation with several hundred to a thousand doctors a year, ranging from medical directors at hospitals and large provider groups to solo doctors and small groups.

The objective of managed care has always been to provide cost-effective care, says Brooks, but in the beginning many doctors saw that as primarily about saving money, sometimes at the expense of patient care. (Some of the stupid denial-of-care decisions health insurers made in the 1990s, not to mention the general tone-deafness when it came to public concern, did not help plans to make their case.)

“This was probably the first time that physicians had to justify why something was medically appropriate,” says Brooks. “To that extent, the physicians would rather have had a world where they didn’t have to do any of that. We saw that there were lots of things that could be done better.”

Brooks recalls meeting at that time with a medical group that had been named one of the best in the region by Philadelphia magazine. He had to tell the doctors that the group’s vaccination numbers weren’t where they should be. The lead physician didn’t believe him.

“I said, ‘Go and do your own study and give me the results,’” says Brooks. “‘If we’re wrong, you’ll show us. If not, you’ll understand there’s an issue.’ He called me about two or three weeks later and said, ‘You know, Ron, we did what you said and I couldn’t believe it. We are not doing what we thought we were doing.’”

Part of the changing landscape is that more doctors are employees of either hospital groups or large physician practices. The physician search company Merritt Hawkins tracks not only what types of doctors are in demand, but also what types of organizations demand them. In 2004, 11% of the company’s search requests came from hospitals. In 2013, the number had jumped to 64%.

Brooks estimates that between 40% and 60% of the doctors in Independence’s network are employees. The gap takes into account affiliations “that may not mean that they are actually employed, but they’re somehow linked in some payment structure.” That means that the doctors and their practices can participate with a particular institution (such as a hospital group or large physician practice) in a financial arrangement that rewards quality and cost-effectiveness without having to be owned by that institution, says Brooks.

Fifteen years ago, Brooks often dealt with a doctor who owned her own practice, or doctors in a small practice. Now, he’s more likely to be sitting across the table from another medical director of some kind who has an administrative position at a hospital group or large physician practice.

“They’ve been moved up into this position because of their understanding of what it takes to manage a large group of patients systematically,” says Brooks. “How to put processes in place. How to train office staff. So the conversations usually go very well. The difficulty revolves around making sure they can figure out within their own organization how to align their resources to get things accomplished.”

Small practices

Funny Brooks should mention doctors who fly solo. That describes Wergin, but not most of AAFP’s 130,000 members, two thirds of whom are employed. Wergin’s an outlier in more than one sense. Milford, a Mennonite community with five Mennonite churches, has a population of about 2,000. It’s far from large coastal cities, reminds Wergin, where it’s safe to say that most physicians won’t see a single Mennonite patient during their entire careers. Wergin works with a nurse practitioner and that’s it. He has to deal with health plans himself.

“They bring you a contract and say, ‘Well, here’s the contract. Take it or leave it.’ You say, ‘Gee, I can hardly do that.’ ‘How big are you? A town of 2,000. We have 20% market share. We don’t care.’ Now if I were with [a huge medical group], I’d be able to say: ‘I’m sorry. You thought you were just dealing with me? I’m in a 500-physician practice. We represent half a million lives.’

“They’ll say, ‘Oh, I’m sorry. Let me pull that back. I think there’s something in my numbers here. Let me kind of adjust that. Is this a good number? No? How about this?’ So what you’re seeing is this consolidation and really is that good for the patient? I don’t know.”

The AAFP, says board chair Robert L. Wergin, MD, calls for blended payments that combine per-patient, per-month care management fees to compensate for the administrative costs and time to ensure comprehensive patient care.

Although strength in numbers is important for negotiating payment, it may affect premiums, deductibles, and copayment for the patient, says Wergin. So although it’s important to ensure that family physicians are appropriately paid for their expertise and service, it’s also important that patients continue to have access to affordable coverage.

Smaller practices want less meddling by insurance companies, Wergin says, whereas a physician working for a large practice or hospital can say, “Let someone else help me with ICD-10 or with electronic health records. Now I have an IT person who can fix my frozen computer. Being bigger gives you more resources and infrastructure.”

However, he argues, being bigger doesn’t allow the doctor to adjust treatment on the fly. “If I was part of a 5,000-physician system, they’d say: ‘Well, we can’t have you doing something different than we do in Boston. We have standardization. We all do it the same.’ So you’re going to get the McDonald’s hamburger that tastes the same in Beijing as it does in Chicago. But the patient is not going to get much better.”

Apology accepted

Not that being solo gives Wergin free rein. He recalls one of his patients who’d gotten a negative result on a mammogram. The patient’s ob/gyn felt a lump but didn’t think it cause for concern.

Wergin: “I said, ‘In my practice I don’t leave lumps in breasts.’ I called one of my surgeon friends. He did a biopsy. It was adenocarcinoma. They missed it on the mammogram because it was so lateral.”

The patient got radiation and chemotherapy and returned in a year. Yearly MRIs were recommended by Wergin, as well as the patient’s oncologist and radiologist. The patient brought in a denial letter. The insurer (Wergin declines to name it) wanted another mammogram instead.

Wergin appealed. “I thought, ‘Well this should be easy.’ I wrote another letter. ‘Maybe you didn’t understand. Here’s the background.’ Denied. They said you have the right for tertiary appeal.”

He blocked out a half hour—11 am to 11:30 am on a workday—to conference call the physician panel handling the appeal. “On 10:25, to their credit, I got a call from the chairman. ‘I’m doctor so-and-so the head of the tertiary appeal committee. We were going to meet today in five minutes. In preparation, I just looked over your letters and I’m calling to apologize. I’m embarrassed. I don’t know how this went this far. I’m going to go ahead and approve the $4,500 charge.’”

It was the “first time I ever got an apology for all this.”

Wergin thinks the insurer’s apology would mean more if it had compensated him for this time—which is, in fact, an AAFP position. The academy, says Wergin, calls for blended payments that combine per-patient, per-month care management fees to compensate for the administrative costs and time to ensure comprehensive patient care. In addition, preauthorization rules make more sense when there is a financial incentive to order scans for conditions that wouldn’t normally require them—such as a CT scan on sinuses for a sinus infection, says Wergin.

In Brooks’s experience, most doctors want to improve, and that’s certainly been more the case since he joined Independence in 2003. “Physicians are embracing—especially the patient-centered medical homes—the whole concept of how to get a better handle on delivering care,” says Brooks. “They understand that the delivery of health care involves not just the knowledge in their heads, or even the recommendations they make from that knowledge, but also how easy it is for somebody to get an appointment. How friendly the office staff is to patients. How engaged everyone is.”

Independence helps physicians and large practices align resources by sharing data from the insurers’ network of more than 46,000 physicians. That information helps to pinpoint areas where improvements need to be made, says Brooks. There’s also a push and a pull in every organization with regard to how many resources they can throw at any one project.

Brooks estimates that he has a face-to-face (or phone) conversation with several hundred to a thousand doctors a year, ranging from medical directors at hospitals and large provider groups to solo doctors and small groups.

Any port

Considerable angst over the ACA also seems to encourage a better physician-payer relationship. “Significant change is going on,” says Brooks. “You see different physicians turning many different ways to try to make sure that they have security looking forward. So I think some of them are coming to the health plan.”

Many look upon insurers as possible allies in many markets. Example: pay for performance. The health plan 15 years ago would calculate what each doctor should be paid based on benchmarks. Benchmarks matter even more these days, says Brooks, but the payment usually entails the health plan giving the hospital or provider group a chunk of money and letting them distribute it.

Younger doctors employed by hospitals, technological advances, and health reform would all seem to illustrate the shift of risk to providers, and Brooks has seen the beginning of that. So far, however, most physicians are not taking the downside risk.

“Meaning they don’t lose money for lower-quality measures,” says Brooks. “They simply don’t earn as much as they could if they were achieving higher quality and cost standards. In our experience, in the Philadelphia area, most physicians are currently more comfortable with upside risk arrangements. As they become more accustomed to these risk-based payment programs and are successful, they will most likely be more interested in taking on full risk.”

Despite the changes in health care delivery, says Wergin, the physician–patient relationship remains sacrosanct, or at least it should be. He talks about getting a call from a PharmD in Trenton, N.J., who says that “Betty” shouldn’t be on a certain medication.

“And my comment to him or her, being sarcastic, is, ‘Oh, do you know Betty? Betty Smith and her husband, John, who farm west of Milford here? In the Mennonite church? Oh, that’s right. You don’t know Betty. You don’t know John. You don’t even know the difference between a Methodist and a Mennonite. How can you from New Jersey help me take care of Betty? I’ve been taking care of her for 10 years.’”

Still, that’s not necessarily the sound of two hands being thrown up. Regarding Brooks’s comments, Wergin says that, “It’s neat that you were able to talk to someone 15 years after the fact. I’m kind of encouraged to hear that he takes feedback and that there’s less tension between the provider and the medical director. I’m glad that most of the medical directors I know still practice one day a week. It makes it easier to talk to them about our job.”

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