As Blue Shield increases its premiums again, physicians ask, "Where is that money going?". (Creative Commons)

Blue Shield of California’s controversial proposal to increase premiums on March 1 has drawn much criticism from both local and state government officials and health care experts. 

In defense, Blue Shield has claimed that a 59 percent increase in premiums is attributed, in part, to paying more to doctors and hospitals and has publicly announced that they will move forward with their plan.

Physician compensation has long been a contentious issue in the public domain.  Doctors and other highly skilled medical specialists such as nurses and dentists argue that their training, expertise and responsibility entitle them to their comfortable earnings.  Critics on the other hand claim doctors on average are among the top 10 percent of income earners in the U.S., further citing corrupt cases of income padding that adds to the overall cost of health care.
 
However, the issue surrounding physicians’ salaries is tangentially related to Blue Shield’s rate hike and certainly does not justify the massive increase in premiums. Placing the blame on hospitals and doctors is merely an attempt by the insurance company to shirk responsibility and cloud the public perception about the real issues at stake. 

The fact remains that it is entirely unclear what the 59 percent premium increase will be used for, and whether any of it will be spent to benefit subscribers by paying for services.  And it was only days ago that Blue Shield announced hiring an independent actuary to review their health rates, certainly in response to the widespread criticism their proposal had incited.

The question that should be asked is not who is to blame for the rising cost of health care, but rather what the rate increase will pay for.  This question is especially urgent given the unsustainable rise in health care costs, projected to be as much as in the double digits, which translates into three times the rate of inflation. 

Acclaimed surgeon and writer Atul Gawande of Harvard Medical School is an advocate for health care reform and has extensively studied various health care delivery models worldwide.  Gawande insists that our nation must switch from the current fee-for-service system that incentivizes physicians and hospitals alike to increase patient turnover, with one that is evidence and outcome-based. 

In other words, insurance companies need to reward the doctors who make their patients healthier and only pay for procedures that have been shown to be effective.

The Patient Protection and Affordable Care Act that was signed into law by President Barack Obama in early 2010 will ultimately address the issue of physician compensation by developing the infrastructure necessary to measure patient outcomes and physician performance.

As part of the bill nearly $20 billion dollars has been pledged towards health care technology over 5 years in utilizing a comprehensive approach to ensure that “patients and providers have access to accurate, private, and secure information. It can improve care quality, prevent medical errors, cut paperwork, and reduce costs.” The U.S. House of Representatives, led by a Republican majority, will vote to repeal the health care law on Wednesday in a move that will not be matched by the Senate.

In this unprecedented investment in health care technology improvements, physician performance can be objectively measured to provide the data to change compensation schemes.  Blue Shield’s claim that they need to pay doctors and hospitals more is an outdated argument given the eminent shift in health care administration and delivery.

Dr. Brian Prestwich, a physician at the USC Keck School of Medicine who runs the Family Practice Residency Program at California Hospital Medical Center in Downtown L.A. is an avid supporter of Obama’s health care reform package. 

“Look at the current system and when you pay out of pocket,” Prestwich said in response to Blue Shield’s rise in premiums. “Is the money being spent to provide real value and true quality to improve your health?  Or are you paying for tests and services that may have no effect on your well-being?” 

He asserts that Americans as consumers must demand for more than the status quo, given that Americans spend more per capita and have some of the worst health outcome among the developed nations.  Prestwich also notes that physicians must change their habits by working together across specialties to improve coordination of patient care.

Prestwich continues by asking, “And are you, as a consumer of healthcare, part of the current problem?  Do you expect an MRI when you see your physician for your injured knee?” 

He cites how often his patients will come to the clinic demanding brand name drugs they saw on television or for a referral to see a specialist, both which are behaviors that inadvertently add to the total cost of health care. 

“If you come into the clinic feeling lousy, the diagnosis of viral bronchitis is extremely valuable because it excludes other potentially more serious conditions,” Prestwich said. “But many of my patients consider physician inaction, as there are no medicines or procedures I can administer in this situation, entirely unacceptable.  Some even consider the improper dispensing of antibiotics to treat a virus to be of more value.”

Gawande and Prestwich are not the only ones speaking out for change.  On Friday, state Sen. Mark Leno’s public disapproval of Blue Shield’s rate increase drew support of more than 700 residents, doctors and medical students.  It is certainly now time for health care workers and health care subscribers alike to demand more accountability from health insurance companies.

Reach reporter Kumiko E. Tanaka, a medical student at the USC Keck School of Medicine, here.