Third Parties: Elephants in the Doctor's Office Who Dictate Care

In the health-care jungle, the biggest, strongest, and hungriest beasts are animals with a legalistic and bland name that belies their ferocity and dominance: third parties.

The overriding goal of the 1,200 third-party insurors, who pay $5 out of every $6 of health-care costs, is to withhold care, not give it. The biggest third party of all is the U.S. Government, which pays 45% of the national health bill though Medicare, Medicaid, and the Veterans Administration.

Dr. Harvey Clermont of Worcester, Mass., a surgeon for over thirty years, pictured below, says that third parties “stand solidly between doctor and patient.” He said: “They approve or disapprove procedures. They tell you they want so many patients in and out in an hour. They say, 'We're not interfering. The doctor makes all the medical decisions.'
“But let me tell you as a physician that I can't make a decision that doesn't get looked at and even changed. This includes medicines. You tell them you need a certain antibiotic for your patient and they'll say it's not in our formulary. We're contracted with company X.

"If I say the medicine doesn't work with this patient, they tell me I can fill out a form and make a request for a dispensation. By the time you fill out all the papers and get a reply, everything may have changed and the patient may even have died. If that's not interference, what is?”

When you're in the examining room with a doctor, then, it's not just the two of you in there. Though you can't see them, the room will be packed with third parties: a health insurance company screener standing smack-dab between you and the doctor; a government reimbursement specialist watching and taking notes; a leftist health activist and a rightist health activist, both bemoaning a broken system and plotting polar-opposite reforms; and, naturally, a liability lawyer looking to scare up a juicy malpractice lawsuit.

Other third parties may include sales representatives for big drug and medical device companies, investors going to where the money is, advocates for the poor, even watchdogs from religious groups determined to have doctors and patients deal with health and medical ethics issues according to the teachings of the Bible.

All of these special interests push their way into medical decisions made in the examining room. Most pocket a share of the money generated in proportion to political/financial clout. Some settle for a voice in trying to move the health care system in their ideological or theological direction.

After all the third parties get theirs, the doctor may be left begging not only to get paid fairly but to retain a voice that matters in patient care. When the doctor does get some money, the amount will be according to complex insurance and government formulas that subject physicians to extraordinary price and income controls.

Because third-party controls are literally at the core of the U.S. Health-care system, even the most dedicated physician will not be able to prevent them from impinging on patient care. And that fact robs physicians of professional autonomy and self respect, deprives patients of truly patient-centered care, and guarantees eventual third-party failure – because of doctor and patient dissatisfaction.

Doctors unable or unwilling to conform to the stringent dictates of the system pay a heavy price. In Seattle, Washington I talked to a doctor who, despite everything, continues to care for every patient who walks through his door as he always has. The patient gets treated whether he has insurance or not. Many of his patients are poor. Probably a third of his patients are HIV-positive.

In his modest 14th-floor office in a downtown Seattle office tower, Dr. Thomas J. Smith, pictured below with a member of his two-person staff, discussed his practice and the health care system. Open and friendly and without a trace of excess self regard, he is not wearing the traditional, high-status physician's white coat. Instead, he is dressed more like a janitor, complete with a belly that droops over his belt. His pants are held up by down-home suspenders.

Asked what worries him most these days, Dr. Smith said: “I've been in practice for 25 years and I'm getting older. I don't know what's going to happen to me. After all these years of worrying about patients, I'm worried about me and the economic survival of my practice. The issue can be summed by two things, diminishing reimbursement and increasing volume.”

“Is it true that your door is open to any patient?”

“Yes. I'm open to all comers. That means that a lot of my patients are going to be problematic, which means high needs and low reimbursement. The big third parties make all the decisions and what they specialize in is limiting access to care and incredibly poor reimbursement.”

To illustrate, Dr. Smith gave the example of a typical, moderately complex patient requiring hospitalization. “I do a physical exam, check the lab work, diagnose, explain, develop a care plan, provide for contingencies, visit in the hospital, review additional lab work, adjust medication, talk to the family, take calls from the hospital nurse, do follow-up. I do my own hospital care because I like to provide full services. But for all that, I get paid forty to forty-five dollars.

"On top of that, I am constantly badgered by drug companies and feel dependent on them for keeping me abreast of changes in the field and of clinical updates and all the samples. And of course, they want me to prescribe their products.”

He didn't mention being dependent on the drug companies for lunch. But as we talked, I accepted an invitation to partake of a tray of sandwiches and cookies sent over by a drug company. Almost every day, one drug company or another provides lunch for Dr. Smith and his staff of two, a secretary and a newly hired nurse practitioner.

He introduces the nurse practitioner, a tall young man, as the “next generation” and his hoped-for solution to the problem of increasing the volume and income of his struggling practice. Dr. Smith says the nurse practitioner is an “absolute saint” who wants nothing more than to serve patients. He is an embodiment of hope.

“Are you going to make it?”

“I don't know. I have a limited capacity for self-flagellation, but I have to try. People need care and I have to live. But I shouldn't have to struggle for survival after all these years. Maybe God will give me a star in heaven but why should I have to struggle so hard here just to survive? I make such a difference in the lives of so many. If I don't make it, what happens to them? Everything is out of control.”

Dr. Smith recently had to take a few months off -- to have both knees replaced. The operation went well and he is back at work. While trying to keep his practice going, he is playing tennis and trying to get rid of his belly.

As always, he takes every patient who walks through the door whether they can pay or not. It is a grinding financial struggle that he is not sure he can win. Yet he is determined to keep his practice going because he does not know what his patients would do without him.

The third parties? As far as Dr. Smith is concerned, they can go to hell.

So long and keep moving.