More regulation and declining reimbursements from private payers are impeding many physicians' ability to provide care.
"The patient care path is complicated, but one antagonist bears mention: private payers," Cory Calendine, MD, orthopedic surgeon at the Bone and Joint Institute of Tennessee in Franklin, told Becker's. "Insurance companies are essentially financial vehicles. They provide no actual patient care."
Insurance companies are seeing huge profits, but physicians are seeing a narrowing list of covered services and increasing denials, Dr. Calendine said.
"This produces, at worst, less care for the patient and, at best, more burden to those delivering the care," he added.
Commercial payers' policies and protocols are also leading to more denials. Payers are tightening their policies to approve fewer patients for surgery and denying patients who previously would have been approved.
"I see payers as opportunistic," said Joe O'Brien, MD, a spine surgeon with OrthoBethesda in Maryland, and medical director of minimally invasive orthopedic spine surgery at Virginia Hospital Center in Arlington, Va. "They will deny care when they can, they will deny payment when they can, and they will provide poor contracts when they can. I'd love to see a future model where the payers were true partners with the patients and doctors."
Physicians' problems with insurers are compounded by the increasing number of prior authorizations they need to get approval for procedures before moving forward with care. Seventy-nine percent of medical groups said that payer prior authorization requirements increased in the last year, according to a poll conducted by the Medical Group Management Association March 1.
While these bureaucratic burdens are "totally understandable in our profit-driven, fee-for-service, capitalistic healthcare system," according to Jeff Clode, MD, an internal medicine specialist in Spokane, Wash., they result in "a horrible time sink because the process is so inefficient, cumbersome."
Physicians, particularly independent ones, often don't have the resources to conduct the massive administrative work required to secure reimbursements for all procedures. For some, this dilemma is creating a quota-based mindset to maintain profitability.
"In the private practice setting, relatively low reimbursement for face-to-face patient time. coupled with increasing overhead, creates an environment where there is a mandatory minimum number of patients one has to see in a day just to keep the lights on," said Ian Armstrong, MD, neurosurgical spine specialist at Centric Health in Bakersfield, Calif.
The solution for some is bypassing the system entirely and focusing on cash payers. Physician groups and surgery centers are increasingly cutting insurers from the care delivery equation and contracting directly with employers and cash-paying patients.
Many see financial opportunity in this model. About 67 percent of employed, insured workers are covered under self-funded plan arrangements, where the employer contracts directly with healthcare providers and bears financial risk for the cost of care, according to a 2020 Health Affairs report
ASCs, such as the Surgery Center of Oklahoma, have seen success with this model. The ASC has targeted cash-paying patients since 2009, when the center's founder Keith Smith, MD, posted prices online.
"Given the difficulty with regulation around government and other third-party payers, the biggest opportunities for growth exist in companies that contract directly with patients and employer groups," said David Hardin, MD, the chief of medical innovation at Healogic in Denver. "Cash-pay surgery centers, disease-specific Centers of Excellence and direct primary care all offer improved outcomes and lower cost by removing much of the administrative cost created through the traditional third-party payer system."