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Why healthcare bills the way it does?

Jawad Arshad, MD, CEO, WoW Health Solutions

The reality of healthcare billing is that this is perhaps the only situation where the entity that is going to pay for the visit is NOT present at the time of the visit. Since whoever holds the money has the power, health insurance companies have created a host of rules to try to deny and delay payment of services. Did you know that a new medical practice can take upto a year to get “credentialed” with insurance companies...filling out the same information on different forms with back and forth correspondence that costs in the thousands of dollars per doctor.


So the insurance companies make your doctor spend incredible amounts of time to perform paperwork just to get on their “panel.” Then they make the doctor document everything to get paid...the more your document the more you get paid, regardless if it has anything to do with your healthcare or not. This is done because the health insurance company is NOT present during your medical visit so they have no way of knowing what really happened so everything has to be justified in a “written” format.


Over the years, more and more complexity and ridiculousness has been built into the system with ever increasing numbers of computer codes and terminology. ICD coding is a standardized way to give a name to each diagnosis. For example, ICD-9 had about 13,000 codes but in the fall of 2015, ICD-10 codes were released which increased the number of diagnosis codes to over 68,000. Thankfully human beings didn’t just develop an extra 55,000 diseases in 2015. This is just tip of the iceberg...there are ICD, CPT, and HCPC codes with crosswalk….and soon you realize that you in the medical billing matrix...no doctor understands it so of course we have created computer systems or EHR to handle this. If any of you have ever tried to get your records from one doctor to another, you know that these EHRs are operating about 20 years behind all other industries.


Since the party holding the money is not present during the medical encounter, they make you pay some amount for each visit to ensure that you are not abusing your privilege of being a member, and they make the doctor fill out completely unnecessary and pointless paperwork to get paid. Of course you can’t expect fast payment because each day the insurance company holds the money in their account, the more money they make on interest revenue...when the premiums that they have collected is in the billions, the daily interest revenues also run into the millions.


So now you know...the point of medical billing is to create complexity and opaqueness under the guise of good data collection and documentation. Oh and by the way, no study has found any improvements in your health because of this data collection.


Now that we have discussed how and why medical billing is the mess that it is, our next blog will look at the role that you and I have played in creating this quagmire.


About Author

Dr. Arshad is a practicing physician with extensive administrative experience, who has firsthand knowledge of running a medical practice and working in employed models. WoW Health aligns incentives for the healthcare ecosystem so all stakeholders benefit from transparent and direct relationship between patients and medical service providers.

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