Competition Fuels the Market
by Charles B. Clark, M.D.
Perhaps we are all familiar with the quotation, “competition fuels the
market.” This is certainly true in
terms of the business world as we know it. If
one outlet charges more than another, the consumers flock to the outlet where the
prices are lower. If the first outlet
wishes to remain competitive, it lowers its prices as well. Usually this reaches a balance and the prices
level out.
So how does this apply to the world of medicine? This morning I was reading in the newspaper
about a patient who spent two days and one night in the hospital to have an operation
on his neck. The bill for the hospital
was $61,484. “Under discounts
negotiated with the hospital,” the patient’s insurance company paid $1,788. The patient paid an additional 10% of that
paid by the insurance company which was $178. If
all of this is really true, out of a bill for $61,484, the hospital received $1,966. That amounts to 3% of the amount billed.
Apparently competition is not only fueling the market, but in
this case it may be in the process of destroying the market. But how does this impact on the medical
doctor? If you are a self-employed
physician, compare your present reimbursement on a fee-by-fee basis with what you
received one year ago, five years ago and ten years ago. If you can go back further than that, so much
the better. If you are a salaried
physician, compare what you are receiving to what the fee schedule allows. You may find that you are not being
reimbursed according to the original intentions.
Look at what is happening in terms of the historical
perspective. We continually hear that the cost of medical care is increasing,
but the physicians are receiving less and less. Competition is certainly fueling the market but who are we
competing against? We are the ones
providing medical care and we are competing against each other. As we continue to accept less and less for
our services, we are losing what is precious to us - the right to continue to provide
our services effectively with reasonable compensation.
The sad thing about this is that we have so willingly accepted our fate.