Physician, cut thy costs - medical providers are considering taking part in the cost cutting battle - includes related information on physician specialization, American College of Physician's reform criteria, and worker's compensation - Cover Story

Business & Health, June, 1991 by M. Mary Conroy

Turn down the volume

At William M. Mercer, Inc., a Houston-based benefits consulting firm, consultant John Cole says employers are currently of two minds on the RBRVS plan. While it will give them a definite peg on which to hang payment projections, there is a clear worry that specialists may react by ordering more procedures or by intensifying services-both of which would mean another round of cost increases.

This is a real concern of many consumers and health experts. Health and Human Services Secretary Louis Sullivan, M.D., noted in his 1990 year-end report on the nation's health care spending that in 1989, 26 percent of the cost increase in personal health care spending was attributable to both per-person use (volume) and intensity of services. And that increase occurred two years ahead of initial RBRVS federal implementation.

Work around the M.D.

Robert Hungate, government affairs-health care manager for Hewlett Packard, Palo Alto, Calif., says it's the problem of increased volume and intensity of services that makes employers so nervous when making projections for health care costs.

What's more, Hungate isn't shy about laying the blame at the feet of the medical profession. His experience (he's been with Hewlett Packard since 1960) has shown him that physicians simply aren't willing to take a cut in pay.

"To get a handle on costs I really think that we have to work around the physician," he says. "One way companies can do this is to increase out-of-pocket expenses for beneficiaries. I think we all become much more careful consumers of health care when the first $1,000 or $2,000 comes from our own bank account."

Volume bugaboo

Increasing the deductible may prove a way not only to work around physicians but also to get a handle on the latest bugaboo of health care planners: volume of services.

Solving the volume of services problem should start with prevention, says NAMCP's Williams. "By the time many patients get to the doctor, it's really too late," he says. "What we need is to educate the public and employers about maintaining health. The key to the solution is education and prevention, not action taken after the employee has gained 40 pounds, is hypertensive, and is smoking two packs a day."

Williams started his group in January and is now up to 20 members. He wants physicians to have more input into employer-sponsored wellness programs, and he's also urging businesses to use positive incentives to encourage employee wellness, rather than negative reinforcement. For instance, instead of making employees pay higher health care premiums because they smoke, he would rather see non-smokers paid slightly higher salaries.

Demand: MD or patient driven?

Who's to blame for the increased volume of physician services? Often, blame has wrongly been laid at the physician's doorstep, says Soper. The demand for increased services or use of new technology is more often generated by the patients themselves who seem, he maintains, to have an increasing curiosity about new medical technologies and additional services. Soper notes that it is common for the practicing physician to receive patient requests for such medical advances after they are highlighted in the general media.