Two different MHM clients – both consultant surgeons – have been advised by a specific insurance company that the fees for their initial and follow up consultations are being reduced. They are not amused, to say the least. But what can they do about it? Nothing.
Actually, that’s not strictly true. In a perfect world, there is much they can do. But we don’t live in a perfect world. We live in this one.
In a perfect world they can, for example, pass any reduction in fees on to their patients. Save of course their recognition agreement with the insurance company forbids them to do so. If they do they are at risk of de-recognition. Ah came the reply, the insurance company won’t find out. Yes, they will.
Or they can stop seeing patients referred to them by that specific insurance company. In both cases during the last half of 2017 that is over £10,000 worth of referrals. Both would suffer double percentage digit drops in private practice turnover. That is not good.
Both of these consultants, however, are by no means stupid. Neither of them just react. An immediate reaction is potentially the worst thing to do. Indeed many years ago MHM worked with one consultant who did just that when denied a fee by an insurance company. He even went so far as to tell the insurance company concerned unless they immediately put his consultation fees back up he would forgo his recognition with them and refuse to see their insured patients. They didn’t so he did. And immediately saw a 23% drop in the private practice turnover. Do NOT react. What is required is a considered response to all the options.
In the case of the MHM clients, I calculated what the drop in consultation fees would mean over a six month period against an assumption that the lack of referrals would lead to 25%, 50% or a 100% drop in patients from that specific insurance company. In all cases, for obvious reasons, there was a loss. But at least that loss was now quantified.
It is worth noting that the drop in consultation fees would not impact in a drop of surgical fees because surgical fees were excluded from the reduction.
That said a refusal to see patients from the specific insurance company concerned due to consultation fee reduction would automatically lead to a 100% drop in surgical fees as clearly if a consultant does not see a patient, it is extremely unlikely he’ll take that patient into a theatre.
Who is driving the car?
Sadly there are only two options in reality: accept the reduction or don’t accept the reduction. I’m afraid the insurance company really are in the driving seat when it comes to setting their fees and there is little a private consultant surgeon can do about it. Many years ago a private consultant surgeon could charge what they liked and to a certain extent with a self-funding patient, they still can. However, with insured patients, those days are long gone. Rightly or wrongly, those days are over.
So what should the private consultant surgeon do?
MHM suggests an analysis of how the reduction will impact on the private practice should be undertaken. That will at least quantify how the reduction will impact on the private consultant surgeon in actual financial terms. All the data will be contained in a sales ledger and with the aid of an excel spreadsheet, it’s relatively easy to perform the analysis.
Such an analysis also confirms how the reduction will impact on MHM for MHM charges a percentage of what is actually paid to the consultant. If that figure is lower then the MHM fee will also be lower. In other words, the pain is shared. Thus I don’t like it any more than the private consultant surgeon but I can’t do a lot about it either.
The bottom line remains to accept the fee reduction or reject the fee reduction. That I’m afraid is the reality.