'Insurance mergers are creating monopolies': 5 spine surgeons discuss the insurance industry & what they would change


Here five spine surgeons weigh in on what needs to change in the U.S. health insurance industry.

Ask Spine Surgeons is a weekly series of questions posed to spine surgeons around the country about clinical, business and policy issues affecting spine care. We invite all spine surgeon and specialist responses.

Next week's question: How will biologics grow over the next five years?

Please send responses to Anuja Vaidya at avaidya@beckershealthcare.com by Wednesday, Oct. 5, at 5 p.m. CST.


Question: How can the insurance industry be re-structured to be more effective?


Ray Oshtory, MD, MBA, Pacific Heights Spine Center, San Francisco: There was a unique opportunity to align incentives with the passage of the PPACA, but unfortunately those opportunities got ignored or stripped out of the law. The majority of the profits in the healthcare economy go to the pharmaceutical and device industry. The reason is simple and is unique to the U.S. healthcare system: the payer (insurance) is separate from the decision maker (doctor) who is separate from the beneficiary (patient). The doctor has no incentive to prescribe cheaper drugs or use cheaper devices because it does not cost the doctor anything. The patient has no incentive to ask for a cheaper drug or implant because their insurance is picking up the tab. The insurance company has the incentive to save money but little power to do so without upsetting their customer, the patient, or their contracted providers, the doctors.


The way to save money in healthcare is to align incentives. For example, one suggestion might be to pay the doctors for the drugs and implants, then have the doctors buy these products when they are prescribed or implanted. You would see prices drop in half overnight with such a system. This type of model is used in dentistry which is done typically on an outpatient basis in the dentist's office. Identical products will cost a fraction of what they cost when used in a hospital because it is in the dentist's best interest to use cheaper products to save money or to negotiate lower rates, as they have to buy all of the products used in their offices, and most people do not have dental insurance. This basic model is used in virtually every other industry in this country.


Obviously, many policies would have to be changed because such a model currently is illegal due to Stark, anti-kickback and anti-self-referral laws. Medicare's bundled payment program has suspended these laws for their pilot program, likely because they see the inherent flaws in such arbitrary rules. But we cannot fall into the same flawed reasoning that doctors will intentionally prescribe less effective drugs just to save money. We went into this business to help our patients, and that is what we will continue to do.


Brian R. Gantwerker, MD, The Craniospinal Center of Los Angeles: Besides the inevitable collapse of the ACA with the withdrawal of payers from the exchanges, we would need to first re-connect the authorization and payment periods of processing claims. Next a payer-physician ombudsman must be established where physicians can go to state their cases and be heard when payers are not following their own contracted policies, which is pretty much all the time.


Medicare needs to be restructured and the MAC organizations must be held accountable to their behavior as well. If they are doing a poor job, or a complaint be made against them, a hotline should be established. It is easy for patients to call and complain about hospitals and physicians, so why should there not be something analogous to the people they pay for servicing their patients?


Rolando Garcia, MD, Orthopedic Care Center, Aventura, Fla.: The key issue in the future is a refocus on coverage and not on insurance. The real reason we all need insurance is that in case we have a medical need we can get access to safe and efficient medical care. The illusion of universal coverage with limited or nonexistent coverage is and will remain a major problem. Even those who currently participate in large insurance plans are often denied coverage based on biased and often dated policies clearly designed to cut cost. In the future, coverage on all insurance plans must be determined based on objective criteria as determined by practicing physicians and with the help of specialty societies.


J. Brian Gill, MD, MBA, Nebraska Spine Hospital, Omaha: Not sure if I can answer this in a couple of sentences as entire careers have been devoted to this topic without a solution. I do think moving towards value-based care focusing on cost, quality and outcome metrics is a step in the right direction. Risk sharing, bundled payments, capitation per lives covered are all components of the next healthcare model as the current fee-for-service model is not sustainable.


Working with our local insurance providers can lead to change. If we as physicians don't present an alternative model then one will be chosen for us under certain conditions that do not favor physicians and further compromises the care that we provide.


Vladimir Sinkov, MD, New Hampshire Orthopaedic Center, Nashua: The health insurance industry will be much more effective, efficient and cheap if it is forced to face the same economic and competitive pressures as the rest of the industries in a capitalist system. Current insurance mergers are creating monopolies.


Inability of insurance companies to sell their products across the state lines decreases competition. Anti-trust law exemptions allow health insurances to collude and lower physician reimbursements. For the most part, the true consumers of the commercial health insurance products in the U.S. are employers. This puts the patients completely out of control in terms of deciding what insurance product to have.  


To my knowledge, no other individual insurance industry in the U.S. "enjoy" such protections that allow them to maximize profits while not being under much pressure at all to provide good quality products for patients or work efficiently and fairly with physicians.


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