Thank you for this article, and not to diminish any of what was shared on the Physician Business front, but as a Pharmacist for almost 50 years in multiple practice settings, I have worked for 3 family pharmacies which closed due to under-reimbursement.. Independent Pharmacies (and even chains such as RiteAid) are closing at a sinful if not critical rate due to under reimbursement from PBMs and their vertically integrated Insurers. Not only are PBMs not paying anything near the overhead required to operate a Pharmacy, they are not even covering the cost of the drug which must be purchased by the Pharmacy in order to fill the patients' prescriptions, and Pharmacy revenue is solely based on dispensing a product, and not for any professional services (Ever try to "just ask a question" of a lawyer without receiving a bill?). In addition to supporting the big 3 PBM (controlling 80% of all Rxs filled) multi-billion dollar middlemen, these business closing are creating Pharmacy deserts where patients no longer have access to a local pharmacy/pharmacist for their medications and services. For-profit Healthcare is financially unsustainable - Break up these Monopolies NOW!
Really, the same playbook is being used on both professions. Underpay the independents to help subsidize the excessive payment to the clinics and pharmacies they own, and also the major chains who have bargaining power to get more attractive reimbursements…
The kink in that logic is that the independents in both professions give better care and are more accessible to the public….
And until laws are passed in DC to stop this, we have to assume that Congress is ok with this (at least at the right price, which the PBMs get from screwing the independents… ironic isn’t it?)
What do you mean by the healthcare finance space? The U.S. has been financialized to death. Apparently, your industry, the healthcare financial solutions market, is a 130 billion dollar industry. Why can't we have single-payer universal healthcare? What is government for? Isn't it supposed to be to provide collectively what we cannot provide for ourselves individually? Enough with the band-aid add-ons to healthcare in the U.S. Pay healthcare providers a decent wage after publicly funding their education. Simple and done!
Gloria, yes, yes, yes! I don’t like purity politics but it will be very difficult for me to ever vote in the future for someone who doesn’t support everything you wrote. And thank you to Health Care Un-Covered.
This is the best explainer of the plight of the independent practitioner I have ever read. I live inside the pinch you describe as a solo practice OBGyn, but could never really explain the unfair business practices INSCOs use in our bizarre healthcare economy. It’s too twisted to believe, arcane beyond need.
Well stated and actionable, @Seth Glickman, MD. Time to remove barriers and friction for IPC Doctors. The current policy approach is short-sighted, taking into account the current shortage, as well as the future shortage that we will see. Open up choice and markets. Common sense. We have reached a point, where we need to stop punishing PC physicians. We need as many, as we can get, moving in the right direction; access to care.
As a 65 yo on a Medicare Advantage Program, I'm scared shitless. I feel we are at a point where we can call capitalistic healthcare genocide to the American Healthcare System. I feel as I'm standing on a cliff and capitalistic care is pushing me off. I feel bad for independent physicians. It's a no win situation!
Dude - you get a 3 month window to change your mind on MA vs traditional Medicare. So if you’re now 65 and just recently signed up- go change it now. And if it’s more than 3 months go to Allstate now and price planG supplements for your age and health. If you’re 65 and healthy, change if you can.
I say Allstate because the inscos planGs cost more and premiums go up more frequently than planGs at state farm or Allstate. Inscos hope you don’t know that.
One problem that few folks appreciate is that the baseline comparison of Medicare reimbursement for primary care services is a shrinking number called the "conversion factor". It is adjusted annually for "budget neutrality", and that budget neutrality number goes down more often than up. Over the course of the past couple of years the economic value of that reimbursement has fallen dramatically in real terms.
(Budget neutrality basically means that although the pool of funds available for physician payment may have a slight economic adjustment from year to year, that total must also bear the aggregate increase in all physician services provided during the year as well as the impact of more costly services and increased demand that get added to the pool. There is only so much money to go around and one way of controlling expansion of that money is to spread the impact across all physician services.)
Consequently, not only are the insurers paying fractions of that baseline code to primary care clinicians, for their services depending on how the contract is written the insurers also benefit from that economically declining baseline Medicare reimbursement that is far behind inflation and falls further behind every year.
Add the two realities together and the disaster you so rightly describe is even worse than what you noted.
UnitedHealth Group now owns the insurer (UnitedHealthcare), the PBM (OptumRx), the data analytics firm (Optum Insight), and 90,000+ physicians (Optum Health). They are the payer, the pharmacy middleman, the data processor, and increasingly the provider. Every side of the transaction. The reimbursement rates aren't market forces. They're transfer pricing within a conglomerate.
An accurate account of how primary care docs are being squeezed by our current healthcare system - one of many tragic outcomes. Mental healthcare providers have been treated even worse, and we don't have a powerful lobby like the AMA to turn to. Like Gloria, I would ask, is not the "healthcare finance space" part of the problem?
There is a ready solution for healthcare providers and patients, which is to get the for-profit companies out of healthcare, and expand Medicare to cover everyone. Of course Big Insurance is fighting this, because they're making mega$$ while providers and patients both suffer.
Universal or single-payer healthcare is not a fantasy, nor socialism, but rather a rational and humane response to fixing our utterly broken healthcare system, and what nearly every other democratic country in the world has done. Oh, I forgot, we're no longer a democracy, but rather a kleptocracy!
2006-2023: hospital prices up 84% vs 38% for private practices. 2012-2024: share of physicians in private practice down from 60% to 42%; hospital employed up from 29% to 47%. Hospital costs 7x more than identical codes performed in physician offices. Yet insurers are hammering independent practices for 70% of Medicare, driving the docs to the nearby health system and paying 7x for the same services. It makes no sense!
Thanks for writing this up. I agree with all your policy changes. I would add leveling the reimbursement playing field by increasing private practice rates more than hospital rates to close the rate gap. Also, paying PCPs for uncompensated / undercompensated time (eg, better reimbursement for prescription management outside of a visit).
Thank you for this article, and not to diminish any of what was shared on the Physician Business front, but as a Pharmacist for almost 50 years in multiple practice settings, I have worked for 3 family pharmacies which closed due to under-reimbursement.. Independent Pharmacies (and even chains such as RiteAid) are closing at a sinful if not critical rate due to under reimbursement from PBMs and their vertically integrated Insurers. Not only are PBMs not paying anything near the overhead required to operate a Pharmacy, they are not even covering the cost of the drug which must be purchased by the Pharmacy in order to fill the patients' prescriptions, and Pharmacy revenue is solely based on dispensing a product, and not for any professional services (Ever try to "just ask a question" of a lawyer without receiving a bill?). In addition to supporting the big 3 PBM (controlling 80% of all Rxs filled) multi-billion dollar middlemen, these business closing are creating Pharmacy deserts where patients no longer have access to a local pharmacy/pharmacist for their medications and services. For-profit Healthcare is financially unsustainable - Break up these Monopolies NOW!
Really, the same playbook is being used on both professions. Underpay the independents to help subsidize the excessive payment to the clinics and pharmacies they own, and also the major chains who have bargaining power to get more attractive reimbursements…
The kink in that logic is that the independents in both professions give better care and are more accessible to the public….
And until laws are passed in DC to stop this, we have to assume that Congress is ok with this (at least at the right price, which the PBMs get from screwing the independents… ironic isn’t it?)
What do you mean by the healthcare finance space? The U.S. has been financialized to death. Apparently, your industry, the healthcare financial solutions market, is a 130 billion dollar industry. Why can't we have single-payer universal healthcare? What is government for? Isn't it supposed to be to provide collectively what we cannot provide for ourselves individually? Enough with the band-aid add-ons to healthcare in the U.S. Pay healthcare providers a decent wage after publicly funding their education. Simple and done!
Gloria, yes, yes, yes! I don’t like purity politics but it will be very difficult for me to ever vote in the future for someone who doesn’t support everything you wrote. And thank you to Health Care Un-Covered.
Yes HC is broken, MD reimbursements are loser-low, withholding care & neglect remain profitable. WHO will fix this?
This is the best explainer of the plight of the independent practitioner I have ever read. I live inside the pinch you describe as a solo practice OBGyn, but could never really explain the unfair business practices INSCOs use in our bizarre healthcare economy. It’s too twisted to believe, arcane beyond need.
You have explained it with no drama, just facts.
Thank you so much
Well stated and actionable, @Seth Glickman, MD. Time to remove barriers and friction for IPC Doctors. The current policy approach is short-sighted, taking into account the current shortage, as well as the future shortage that we will see. Open up choice and markets. Common sense. We have reached a point, where we need to stop punishing PC physicians. We need as many, as we can get, moving in the right direction; access to care.
As a 65 yo on a Medicare Advantage Program, I'm scared shitless. I feel we are at a point where we can call capitalistic healthcare genocide to the American Healthcare System. I feel as I'm standing on a cliff and capitalistic care is pushing me off. I feel bad for independent physicians. It's a no win situation!
Dude - you get a 3 month window to change your mind on MA vs traditional Medicare. So if you’re now 65 and just recently signed up- go change it now. And if it’s more than 3 months go to Allstate now and price planG supplements for your age and health. If you’re 65 and healthy, change if you can.
I say Allstate because the inscos planGs cost more and premiums go up more frequently than planGs at state farm or Allstate. Inscos hope you don’t know that.
Thank you
One problem that few folks appreciate is that the baseline comparison of Medicare reimbursement for primary care services is a shrinking number called the "conversion factor". It is adjusted annually for "budget neutrality", and that budget neutrality number goes down more often than up. Over the course of the past couple of years the economic value of that reimbursement has fallen dramatically in real terms.
(Budget neutrality basically means that although the pool of funds available for physician payment may have a slight economic adjustment from year to year, that total must also bear the aggregate increase in all physician services provided during the year as well as the impact of more costly services and increased demand that get added to the pool. There is only so much money to go around and one way of controlling expansion of that money is to spread the impact across all physician services.)
Consequently, not only are the insurers paying fractions of that baseline code to primary care clinicians, for their services depending on how the contract is written the insurers also benefit from that economically declining baseline Medicare reimbursement that is far behind inflation and falls further behind every year.
Add the two realities together and the disaster you so rightly describe is even worse than what you noted.
UnitedHealth Group now owns the insurer (UnitedHealthcare), the PBM (OptumRx), the data analytics firm (Optum Insight), and 90,000+ physicians (Optum Health). They are the payer, the pharmacy middleman, the data processor, and increasingly the provider. Every side of the transaction. The reimbursement rates aren't market forces. They're transfer pricing within a conglomerate.
An accurate account of how primary care docs are being squeezed by our current healthcare system - one of many tragic outcomes. Mental healthcare providers have been treated even worse, and we don't have a powerful lobby like the AMA to turn to. Like Gloria, I would ask, is not the "healthcare finance space" part of the problem?
There is a ready solution for healthcare providers and patients, which is to get the for-profit companies out of healthcare, and expand Medicare to cover everyone. Of course Big Insurance is fighting this, because they're making mega$$ while providers and patients both suffer.
Universal or single-payer healthcare is not a fantasy, nor socialism, but rather a rational and humane response to fixing our utterly broken healthcare system, and what nearly every other democratic country in the world has done. Oh, I forgot, we're no longer a democracy, but rather a kleptocracy!
Our private for-profit healthcare has diverted $79 trillion from the working class to the wealthy 1% over the last 50 years!
2006-2023: hospital prices up 84% vs 38% for private practices. 2012-2024: share of physicians in private practice down from 60% to 42%; hospital employed up from 29% to 47%. Hospital costs 7x more than identical codes performed in physician offices. Yet insurers are hammering independent practices for 70% of Medicare, driving the docs to the nearby health system and paying 7x for the same services. It makes no sense!
Thanks for writing this up. I agree with all your policy changes. I would add leveling the reimbursement playing field by increasing private practice rates more than hospital rates to close the rate gap. Also, paying PCPs for uncompensated / undercompensated time (eg, better reimbursement for prescription management outside of a visit).
A few more recs to address this problem here. https://www.linkedin.com/pulse/years-cuts-doctors-windfalls-hospitalstime-fix-gap-adams-ze7mc?utm_source=share&utm_medium=member_ios&utm_campaign=share_via