How much am I charging?

Thirty years ago, I was transitioning from a two-doctor partnership to solo practice. I was desperately seeking advice about how to run a small business when I stumbled across a letter to the editor written by an older physician. He wrote that for 20 years he had pegged his office visit charge to the price of a first-class stamp ... a dollar for each penny of postage. He claimed that over 2 decades, it had allowed him to stay ahead of inflation and provided him a level of reimbursement that he felt was fair and equitable.

While at the time it seemed like a reasonable strategy, it obviously wouldn’t work now. Today, at $0.47 a stamp the United States Postal Service is losing money hand over fist. And, I don’t think there are many physicians today who are billing $47 dollars for a 99213. Although if the price of stamp reflected the real costs, that old guy’s formula might still hold up.

As long as I practiced by myself, I was acutely aware of my expenses and my charges. While most families I saw had some level of third-party coverage, there were plenty of lobsterman, carpenters, and other small business owners who were paying out of pocket. Often, on the weekend, I was the only one in the office. I had to be comfortable with saying, as I looked a parent in the eye, "If you want to pay for the visit today, it’ll be $23." Many of the families were friends and all of them were neighbors because Brunswick was and still is a small town.

Although I was very aware of my own office visit and in-house lab charges, I was never quite sure about what the hospitals were billing for tests and x-rays that I ordered. But, I got enough "Doctor, do you know what that test cost?" calls to want to be better informed.

Many years later, when I joined a small physician-owned group, we were all still directly involved in the fee-setting process. But, as the group was engulfed by larger and larger entities, the fee schedule disappeared behind a corporate smoke screen. An article in the June 2013 Pediatrics makes it pretty clear that I was not alone in my state of ignorance. T. A. Rock et al. from the Children’s Hospital of Philadelphia reported that 71% of the general pediatric attending physicians and 75% of the pediatric residents would describe themselves as "minimally knowledgeable" or "completely unaware" of the costs, charges, and reimbursements at the hospital (Pediatrics 2013:131;1072-80).

One might argue that hospitals and large group practices are such complex entities with a variety of contractual arrangements with multiple payers that it is unreasonable for a physician to be informed about what is being charged of his or her services. Rubbish! It is unreasonable to expect a physician to become an investigative reporter in his or her spare time. But, it is time that hospitals and large groups lift the smoke screen that hangs over health care charges in this country. Everyone – patients, tax payers and not least of all providers – need to know what health care costs.

One might also argue that a physician should not consider the cost of a diagnostic test that he or she is ordering. That may have been a valid argument when malpractice suits were infrequent and inconsequential. But, now an unreasonable number of tests are ordered simply as defensive medicine. We physicians have not been good stewards of the health care dollar. Cost should not discourage us from ordering a test that is truly necessary. But, each time we click a box on the order screen we should be asking ourselves, "How much of somebody else’s money am I spending to cover my behind?"

Dr. Wilkoff practices general pediatrics in a multispecialty group practice in Brunswick, Maine.

Thirty years ago, I was transitioning from a two-doctor partnership to solo practice. I was desperately seeking advice about how to run a small business when I stumbled across a letter to the editor written by an older physician. He wrote that for 20 years he had pegged his office visit charge to the price of a first-class stamp ... a dollar for each penny of postage. He claimed that over 2 decades, it had allowed him to stay ahead of inflation and provided him a level of reimbursement that he felt was fair and equitable.

While at the time it seemed like a reasonable strategy, it obviously wouldn’t work now. Today, at $0.47 a stamp the United States Postal Service is losing money hand over fist. And, I don’t think there are many physicians today who are billing $47 dollars for a 99213. Although if the price of stamp reflected the real costs, that old guy’s formula might still hold up.

As long as I practiced by myself, I was acutely aware of my expenses and my charges. While most families I saw had some level of third-party coverage, there were plenty of lobsterman, carpenters, and other small business owners who were paying out of pocket. Often, on the weekend, I was the only one in the office. I had to be comfortable with saying, as I looked a parent in the eye, "If you want to pay for the visit today, it’ll be $23." Many of the families were friends and all of them were neighbors because Brunswick was and still is a small town.

Although I was very aware of my own office visit and in-house lab charges, I was never quite sure about what the hospitals were billing for tests and x-rays that I ordered. But, I got enough "Doctor, do you know what that test cost?" calls to want to be better informed.

Many years later, when I joined a small physician-owned group, we were all still directly involved in the fee-setting process. But, as the group was engulfed by larger and larger entities, the fee schedule disappeared behind a corporate smoke screen. An article in the June 2013 Pediatrics makes it pretty clear that I was not alone in my state of ignorance. T. A. Rock et al. from the Children’s Hospital of Philadelphia reported that 71% of the general pediatric attending physicians and 75% of the pediatric residents would describe themselves as "minimally knowledgeable" or "completely unaware" of the costs, charges, and reimbursements at the hospital (Pediatrics 2013:131;1072-80).

One might argue that hospitals and large group practices are such complex entities with a variety of contractual arrangements with multiple payers that it is unreasonable for a physician to be informed about what is being charged of his or her services. Rubbish! It is unreasonable to expect a physician to become an investigative reporter in his or her spare time. But, it is time that hospitals and large groups lift the smoke screen that hangs over health care charges in this country. Everyone – patients, tax payers and not least of all providers – need to know what health care costs.

One might also argue that a physician should not consider the cost of a diagnostic test that he or she is ordering. That may have been a valid argument when malpractice suits were infrequent and inconsequential. But, now an unreasonable number of tests are ordered simply as defensive medicine. We physicians have not been good stewards of the health care dollar. Cost should not discourage us from ordering a test that is truly necessary. But, each time we click a box on the order screen we should be asking ourselves, "How much of somebody else’s money am I spending to cover my behind?"

Dr. Wilkoff practices general pediatrics in a multispecialty group practice in Brunswick, Maine.

Thirty years ago, I was transitioning from a two-doctor partnership to solo practice. I was desperately seeking advice about how to run a small business when I stumbled across a letter to the editor written by an older physician. He wrote that for 20 years he had pegged his office visit charge to the price of a first-class stamp ... a dollar for each penny of postage. He claimed that over 2 decades, it had allowed him to stay ahead of inflation and provided him a level of reimbursement that he felt was fair and equitable.

While at the time it seemed like a reasonable strategy, it obviously wouldn’t work now. Today, at $0.47 a stamp the United States Postal Service is losing money hand over fist. And, I don’t think there are many physicians today who are billing $47 dollars for a 99213. Although if the price of stamp reflected the real costs, that old guy’s formula might still hold up.

As long as I practiced by myself, I was acutely aware of my expenses and my charges. While most families I saw had some level of third-party coverage, there were plenty of lobsterman, carpenters, and other small business owners who were paying out of pocket. Often, on the weekend, I was the only one in the office. I had to be comfortable with saying, as I looked a parent in the eye, "If you want to pay for the visit today, it’ll be $23." Many of the families were friends and all of them were neighbors because Brunswick was and still is a small town.

Although I was very aware of my own office visit and in-house lab charges, I was never quite sure about what the hospitals were billing for tests and x-rays that I ordered. But, I got enough "Doctor, do you know what that test cost?" calls to want to be better informed.

Many years later, when I joined a small physician-owned group, we were all still directly involved in the fee-setting process. But, as the group was engulfed by larger and larger entities, the fee schedule disappeared behind a corporate smoke screen. An article in the June 2013 Pediatrics makes it pretty clear that I was not alone in my state of ignorance. T. A. Rock et al. from the Children’s Hospital of Philadelphia reported that 71% of the general pediatric attending physicians and 75% of the pediatric residents would describe themselves as "minimally knowledgeable" or "completely unaware" of the costs, charges, and reimbursements at the hospital (Pediatrics 2013:131;1072-80).

One might argue that hospitals and large group practices are such complex entities with a variety of contractual arrangements with multiple payers that it is unreasonable for a physician to be informed about what is being charged of his or her services. Rubbish! It is unreasonable to expect a physician to become an investigative reporter in his or her spare time. But, it is time that hospitals and large groups lift the smoke screen that hangs over health care charges in this country. Everyone – patients, tax payers and not least of all providers – need to know what health care costs.

One might also argue that a physician should not consider the cost of a diagnostic test that he or she is ordering. That may have been a valid argument when malpractice suits were infrequent and inconsequential. But, now an unreasonable number of tests are ordered simply as defensive medicine. We physicians have not been good stewards of the health care dollar. Cost should not discourage us from ordering a test that is truly necessary. But, each time we click a box on the order screen we should be asking ourselves, "How much of somebody else’s money am I spending to cover my behind?"

Dr. Wilkoff practices general pediatrics in a multispecialty group practice in Brunswick, Maine.