After the last post, readers wanted more discussion about doctors’ fees; how doctors bill for services they provide.
- Are fee codes just a fancy way to track services?
- How do fee codes get created?
- Why does the government pay doctors?
Teams of bureaucrats and doctors create fee codes. The fee-code-committee learns about services that patients need. The committee works out a fee so that providers can offer the needed service.
Let’s consider a few examples.
I work in a tiny rural office. We still offer venipuncture (blood draws) for routine lab tests.
I bill $3.45 for a venipuncture in my office. My staff draws the blood. The fee was closer to $5 before it was cut in 2012.
If you’ve had a blood test, is the set up and time required only worth $3.54? After repeated cuts to this fee, most patients now have to drive into a lab for bloodwork. Some rural patients drive over an hour for tests. When government cuts fees for drawing blood below what it costs to hire a phlebotomist, then doctors are forced to stop providing office venipuncture.
Another example. We offer ECGs (electrocardiogram – checks your heart) in our rural office.
I get paid $4.45 to interpret the ECG plus $6.60 to cover the cost of the stickers to attach the leads, paper, machine purchase/maintenance. Staff performs the test.
At this point, a business minded person would question my sanity. There’s no way I can cover the costs of the test for $11.05. They’re right. When our machine dies, we will not be able to afford a replacement. In fact, we probably should stop doing them now.
Fees Meet Needs
Fee codes get made to meet service needs. Fees solve specific patient care access problems. Fees have to cover the costs required to offer the service or doctors – small business owners – cannot provide the service.
One final example. Consider driving to the hospital to examine a newborn baby.
It costs around $7-10 for gas + $20-$25 for parking + $?? for mileage = $30-$35 just to get to the hospital. The drive, baby exam and charting takes between 60-90 minutes if I rush. I bill OHIP $52.
I earn less than $20 per hour to provide this service. I still have to pay my staff, lease, licences, etc. in the order of 35-40% of my billings. As much as I love new babies – and I LOVE new babies! – I cannot afford to provide this service. This is one reason why so few family doctors spend their days providing care in hospitals now.
Fee codes direct patient services
Just like grocery store specials encourage shoppers to purchase certain vegetables, fees encourage doctors to perform certain services. Shoppers could purchase other veggie’s. Doctors could perform other services. Shoppers buy veggies on sale because it makes good sense, not because shoppers are greedy or selfish. Doctors are encouraged to provide services that the government values with an appropriate fee.
But what about patient need? What if there isn’t a fee, or the fee is too low, and patients still need the service?
Great question! Doctors still provide the service if they can. Just like we still provide venipuncture and ECGs in our office, doctors will still try to provide the services simply because patients need them. Then physicians will plead with the government for an appropriate fee for the service.
That’s what this fight with the government is all about. Hoskins slashed fees for new patients, after hours care, weekends, on-call and a trailer load of other important services. Patients need those services. Fee cuts harm patient care.
I hope this helped. I’d love to hear your thoughts about fees, incentives and greed. Please let your MPP know that Wynne’s fee cuts harm patient care. Thank you!
photo credit: newsfeed.time.com
Awesome post, Shawn. Very lucid explanation for a simple issue that people can’t wrap their heads around because of all the emotion about this issue.
Hey, thanks so much for reading and commenting Marko.
From what I’m hearing, people still want to learn more about this. It seems so banal to us that we can’t imagine anyone would be interested. But readers get excited learning about the dry mechanics of it. It helps them make sense of the emotions media headlines are designed to inflame.
Again, thanks so much for reading and taking time to comment! Really appreciate it.
Best
Shawn
Ugh… Shawn, I have appreciated your calm reasoned approach in these discussions, however, this blog, coupled with larger frustration related unilateral cuts, commentary from others, and non-helpful adversarial media lines, etc, has me going on a bit on a rant… Perhaps you can give me a calm and reasoned answer?
First, getting into the minutiae of each fee code and whether it is worth it or not for a given scenario is missing the forest for the trees. I am family physician for ~15 years and worked in north rural for a many of those. Billing codes are never perfect fit for the services all the time. Intermediate assessment is the big one – some of relatively easy – quick, efficient; some require more time/energy/brainpower. Another simple example, same thing with injections – needle-phobic 8 year old versus 1 year old – one is a lot easier than the other to immunize yet same billing. We need to see the overall picture of income (gross and net) and not just the particulars of each code and interaction which does not tell the full story.
For hospital work, I agree that if you have to go to the hospital is see one newborn that that is often not worth it from the purely financially perspective. However, if you have other patients in hospital (even one or two), the expenses associated with that trip are more likely to be effectively covered. I agree though that hospital work is generally less well paid than clinic work but that’s life in business – some activities/products may pay better than other activities/products that a business offers. You have made some decisions too – you either live far from a hospital or have quite the energy inefficient vehicle; does your hospital has high parking rates (?can you work out something better)…. Can you work with another physician to cover hospital patients? We make choices for ourselves personally and for our ‘businesses’. We can’t just expect the payers to just make up for the costs of the expenses that may be incurred by those decisions. What about finding efficiencies? I think that because there is always demand for our services, we actually are collectively lousy at running efficient practices.
Finally, from the ‘forest perspective’, fee codes are also about values. What and who deserves to be better financially compensated and what is compensated less. As a northern, rural MD, I have benefited from additional compensation that Family MD in larger urban settings didn’t get. I know that the OMA doesn’t want to talk about this and you have addressed this briefly in a previous comment, but I have always been bothered by why some specialties are better compensated overall than others. Are the underlying principles/values for this documented somewhere? Are remuneration decisions based on these principles? Or are have the billing codes and medical services just evolved over time that the differential got created? What is actually ‘fair’ for MD compensation? Can you or someone point me to what OMA has done related to this? This is not something that should be left to the govt.
Thanks for ‘listening’!
What a thoughtful, respectful and genuine note. Thanks so much! I reads like someone who feels deeply, wants to push back a bit but also seeks to maintain relationship. Impressive.
This topic is massive. I cringe trying to start anywhere, and yet, we have to try to start nibbling on a corner to help people understand; people looking in from outside. I was asked for specifics about fee codes. You are 100% correct; there are many, larger issues. I’ll share a few thoughts on each of your excellent paragraphs.
1. I love how you add nuance to a code for a ‘simple’ injection. There’s nothing simple about having a parent, a nurse and a physician attempt to hold an 8 yr old still to give an injection. Fee code = $6.75. You make a great point about office visits ranging from extremely easy to almost impossibly hard. Most dismiss this with, “You see some easy ones, some hard ones. It all works out.” This betrays the impact on patients. I hope to write about this in my next blog.
2. Great comment about hospital work. Most definitely, driving in to see 5 new babies would be more efficient. Even if you could visit a few adults for supportive care ($18.85), it would help. Handing over newborns and inpatient care to hospital based colleagues improves efficiency. But what does it do for patients? When I had my appendectomy at Thunder Bay General in 1989, I appreciated seeing my family doc on the ward even though I realized years later that it was only a social visit. Does quality improve by delegating everything to our colleagues in hospital? Of course, many more reasons drove generalists out of acute care hospitals.
3. You end with questions about relativity. How do we decide the relative value of one doctor’s service against that provided by another doc for a different service? The OMA should have information on this at OMA.org. It has spent millions on studies: RBRVS, RVIC, CANDI (I might get the acronyms wrong if I type them out). The last one, CANDI – Comparison of Average Net Daily Income – gets used now. I suspect this has been an issue ever since the OMA developed a fee schedule in 1922. In 1978, OHIP copied the OMA schedule of fees to create OHIP’s Schedule of Benefits. Over the years, old fees got retired and new ones added. With ‘across the board’ increases over multiple negotiation cycles, high fees got disproportionately larger than small ones. The spread between high and low earning doctors widened. You raise another giant issue that’s tough to discuss in a short response!
I wish we could sit down over coffee and talk through some of this. I think many of us are moving through the 5 stages of grief. I came out of denial and entered the anger stage over the weekend and started bargaining on Monday. I feel depression trying to invade. The crisp sunshine from a -25C morning makes it hard to feel down…
Thank you so much for reading, sharing thoughtful comments and taking an interest in all this. Many (most?) people can’t be bothered. I only hope we all take notice before the impact on patients gets intolerable.
Kind regards,
Shawn
Thanks so much for creating a great collection on this issue! I hope readers get a chance to check out your site http://www.ontariosdoctors.com/.
Best
Shawn