Managed Care Scam

I am a doctor. I wanted to share the below which was first published in an online publication of a physician community, Sermo.  It is a rather accurate assessment of what has been the reality of health care in our country.  Physicians are being squeezed out of existence.  There is the spectre of a 21% decrease in Medicare reimbursement.  Since the so called managed care plans use Medicare reimbursement as the bench mark for what they pay, all physician compensation will be cut.  As it is, Medicare does not pay enough to cover the expense of physicians seeing their patients.  Commercial insurance isn’t much better.  How much longer will you have a real physician?

Why is the financial scam of Managed Care not being exposed?

I cannot understand why the media and we docs are not exposing the financial scam of Managed Care. Readers need to google “Bill McGuire” the former CEO of United Health who was given a $1 Billion benefits package. Read the front page Wall Street Journal and New York Times Articles from December 7, 2007 highlight the $660 million fine McGuire had to pay for back dating stock options and the $800 million in stock options he had left over.

Do you recall when United Health held news conferences and was on all the networks a few years back?  United Health announced it was no longer going to require prior authorizations and then not so publicly instituted a policy of not guaranteeing payment. The standard Managed Care practice now is to deny 30% of physicians billings because Managed Care has calculated that Docs will simply not take the time to appeal as much as 1/3 of denials.

Do we not realize that we are paying an ever increasing “tax” in effect to Managed Care Executives?  Last year 3 of the largest Managed Care companies raised premiums 26 % while only increasing payments 6% for services. On average the highest paid CEO’s are Managed Care CEO’s. When the Catholic Nuns ran the largest health care system Sister Mary CEO did not get paid a salary. There is a calcualtion called dollars lost from actual provision of healthcare and supposedly Medicare loses $6 for every $100 and Managed Care loses nearly $30 for every $100 with most of this $30 going to Executive compensation. Additionally 6.9 % of healthcare dollars are lost to the time doctors spend on dealing with Managed Care authorization paper work.

Is anyone questioning how 80% of Americans are supposedly happy with their current health care? Since 20% of Americans do not even have health care coverage this means that there is 100% satisfaction of those who do have coverage. This makes no sense. Any of us who have a health plan have watched the increasing portion of our pay check going to managed care. My first employee health plan many years ago cost me nothing and had no copays. Gradually I have paid larger and larger portions of the premiums and the copays have escalated and the coverage shrank.

If Americans are happy it is because they do not look at their pay check and are not realizing the “tax” they are paying to Managed Care CEO’s. The flattening of incomes and the declining of purchasing power is directly related to the thievery of Managed Care. Doctors salaries have been stagnant by and large since 1992 yet we have allowed ourselves to be scapegoated in this process. If we do not disclose the evils of Managed care we are doomed.

Managed Care lobbyists are going to be succesful in maintaining their strangle-hold by getting a mandate for insurance and a mandate for more employer sponsored care. If Americans are happy it is because doctors are fighting the denials and doing all the authorizations and doing all the care free by phone and employers are doing all the leg work arranging the plans and American industrial production and workers are economically suffering as a result.

The only ones ‘doing well” in this system are the Masnaged Care executives and perhap Managed Care shareholders. This needs to stop. Healthcare needs to be disconnected from employment, and patients, not doctors, need to deal with insurance denials then there will be true competition because patients will not put up with what doctors have put up with from Managed Care. We need to call upon the media to do its job and expose Managed Care for what it is a profit scam for its own Executives.

Dr.  Barry Jacobs is a Reproductive Endocrinologist, practicing in Carrollton, Texas, a northern suburb of Dallas. He completed his residency training in obstetrics and gynecology at Baylor College of Medicine in Houston, and remained at that institution to become its first fellow once Baylor achieved accreditation for an advanced training program in Reproductive Endocrinology and Infertility. Dr. Jacobs has served on the faculty of several medical schools and was director of Reproductive Endocrinology at Texas Tech Health Science Center in Amarillo. Currently, in addition to his clinical activities caring for infertile patients and those with recurrent pregnancy loss, he is Chairman of the IVF committee at Baylor Medical Center in Carrollton.

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- who has written 15 posts on Small Business Against Big Government.

Dr. Jacobs is a native Texan, who grew up in Beaumont, 90 miles east of Houston. After graduating from the local college and he attended the University of Texas Medical Branch at Galveston, where he received his degree as a doctor of medicine. He then spent a year in Los Angeles as a surgery intern and returned to Texas to receive specialty training in obstetrics and gynecology. His OB-GYN residency training program was interrupted when he was called to serve his country during the Viet Nam war. While stationed at a pilot training base outside of Lubbock, Texas, he saw several patients each month who complained they were having difficulty becoming pregnant. Recognizing his own poor knowledge in the area of infertility, he assumed he would gain that education when he completed his OB-GYN training. He was mistaken. At the conclusion of his OB-GYN residency, he knew no more about helping infertile couples than he did while in the Air Force. Being dissatisfied with his inadequate abilities in the realm of infertility, he spent 2 more years in a fellowship studying nothing except Reproductive Endocrinology and Infertility. One year of the fellowship was devoted to basic research of ovarian physiology, during which time, he and his mentor and collaborator were able to make a small but landmark contribution to the scientific and medical literature. After completing his formal training, Dr. Jacobs has spent a number of years both as faculty at various medical schools and in private practice. Even in private practice, he remains an educator. Instead of teaching medical students and OB-GYN residents, he educates his patients as to their problems and treatment options. As part of his efforts to teach others what he knows, he has made his web page,, as informative as he can. He derives a great deal of pleasure working with couples and trying to help them. New information and understanding of human reproduction is progressing rapidly. For that reason, Dr. Jacobs devotes a large amount of time reading the current medical literature and participating in continuing medical education seminars. His desire is to provide the best quality care for infertile patients, while trying to make them feel comfortable with the difficult and stressful processes they must endure in their efforts to become parents. In addition to his clinical responsibilities, Dr. Jacobs currently serves as chairman of the IVF Committee at Baylor Medical Center in Carrollton, Texas.

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