The Incidental Economist’s Nicholas Bagley has a good set of comments on the New York Times great article on drive-by doctoring for massive out of network charges. First he looks at the current legal dynamics of contracts of adhesion for individuals and providers. There is probably a theoretical course of corrective action for massive billing objections, the practical course of action is that it is usually cheaper for the individual to get extorted.
One of those terms is typically that the patient agrees to pay for all medically necessary care in connection with her treatment….As with any take-it-or-leave-it contract full of boilerplate terms—what’s called a “contract of adhesion”—the courts won’t enforce a treatment contract to the extent that it deviates from a signer’s reasonable expectations…just imagine how hard it would be to win such a case. The plaintiff would have to prove either that it wasn’t medically necessary to call in the drive-by physician or that the physician’s fees were so out of line as to be unreasonable. That, in turn, would require expert testimony and intensive discovery—and all for the unlikely prospect, after a delay of several years, of convincing a judge to supersede a physician’s professional judgment.
Doctors are one of the two or three most trusted professions in the country. Lawyers are slightly more popular than cockroaches and Congress. A doctor saying that his smart, intelligent colleague Dr. Smith was the BEST CHOICE at $100,000 for an afternoon’s worth of work for Mr. Doe’s surgery will sway far more juries than lawyers and experts arguing over what is appropriate care. This is especially true when any claim that reaches the court room is a one-off event without vast statistical profiling.
Now the alternative as Mr. Bagley advances is for laws like New York’s reasonable expectations law:
New York’s law puts insurers on the hook for covering the patient’s out-of-network charges, which are then passed along to the rest of us in the form of inflated premiums. Disputes between insurers and out-of-network providers will be resolved in arbitration, and let’s hope that arbitrators won’t let providers get away with charging exorbitant fees. It’s possible, however, that New York’s law will just shift the costs of drive-by doctoring from patients to insurers.
I think this type of law is far more likely to reduce drive by assistant doctoring than individual litigation for a very simple reason. I know my company’s legal department. They are absolute assholes at softball. They also enjoy big, complex, multi-year litigation. They have spent twice as much on a case than they recovered/avoided in pay-outs to make a point. A suit to avoid outrageous charges is right up their alley.
In a Galbraithian sense, an insurance company acts as a countervailing pressure against concentrated medical power and the legal department is the sledgehammer in this function. An insurance company can look at statistical measures of patient quality and outcomes and show that keeping care in network at reasonable rates is no worse or significantly better than getting an out of network assistant surgeon. They can engage in extensive pre-trial discovery. More importantly, they can kick out of the networks abusers of assistant surgeon/drive by doctor assignments. It won’t stop it, but it will trim the outliers.