Q&A: Why don't hospitals display rates?

Q: What part of the American health care system focuses in on prevention and health education as opposed to cures? It is said that 80 percent of our health care costs come from preventable or lifestyle-related diseases, so why not focus in on prevention instead of cures?

— Jim Freedom, Santa Cruz, Calif.

Answered by health care researcher Gerard Anderson:

A: We spend only about 2 percent of the health care budget on prevention, even though nearly everyone agrees we should spend more.

In a sense, this is a choice we’re all making.

And it’s because everyone takes a very short-term perspective on health care decisions. The government doesn’t spend very much on prevention, even in programs like Medicare and Medicaid.

There’s no incentive for insurance companies to spend money on prevention because most of us change health care providers every two or three years. As a result of that, any investment in prevention is going to have a limited payoff for your insurance company while benefiting its competitors.

Even on the individual level, many Americans choose to skip preventive care. The situation might be different if insurance companies encouraged routine checkups by offering to cut out co-payments for preventive-care visits. The co-pay is a strong disincentive for many people. Many of us choose to go to the doctor only if we know we’re sick.

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Q: Why is it that my insurance company doesn't give me a financial break when I schedule a doctor's appointment and I am assigned to a nurse practitioner? They give me a financial break when I choose a generic drug over a name-brand drug. Nurse practitioners may have some qualified medical skills, but they are not doctors. Doctors are improving their financial position in their practices by utilizing nurse practitioners at the expense of their patients.

— Larry Sbragia, Phoenix

Answered by attorney and psychologist David L. Trueman:

A: This is an understandable question. The answer is that the nurse practitioner or physician’s assistant is not practicing independently, but rather can only work by assisting a physician.  When you visit a physician, you receive a bundle of services, including those of an assistant trained to perform limited medical procedures not requiring the specialized expertise of the doctor.   The use of these assistants, or “physician extenders,” allows the doctor to focus more time on patients rather than engaging in routine types of tasks that the extenders can perform and perform well.

The use of physician extenders is not analogous to the use of generic drugs.  Generic drugs are distinct pharmaceuticals and are purchased as separate entities, not as part of something else.  The reason consumers pay less for generic drugs is not because the drugs are less effective, but because they do not possess the brand name and the cost associated with that name.  Drug companies spend considerable amounts of money advertising a brand-name drug and the difference in price between the brand name and generic drug reflects the investment by the pharmaceutical company.

The distinction between physician extenders and physicians is also not analogous to the comparison of psychiatrists, psychologists and social workers and the difference in rates that insurance companies provide to these mental health practitioners.  The differences in rates of reimbursement simply reflect the different status of these professionals in society and not the quality of the care they provide.

The important issue is that these mental health practitioners have reached the level of independent practice in their field and, unlike physician extenders, can provide services without the assistance of any other professional.   Physician extenders cannot practice on their own and insurance companies cannot pay them for medical services, since physician extenders cannot provide these without the assistance of a physician.  Indeed, if these physician extenders could work independently, then insurers would likely establish different reimbursement rates for them in comparison to physicians.

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