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Because goofnoff said so - he noted in his original post that his doctor waived the fee that he normally would have collected for the extra day,

That was in his third post, not the original post. His statement, "also knowing his fee would be waived," I took to mean the doc would agree to waive any out of pocket patient payment incurred if the insurer declined the entire hospitalization, for example. I agree that goofnoff's statement could have indicated a per diem, fee-for-service (FFS) arrangement.

Side note - in my experience, in a FFS arrangement the doc gets paid on some or all of the denied hospitalization days. The insurer takes their ounce of flesh out of the hospital billing, which is a much higher cost to the insurer than the lower bill for the doc visit.


That means that I (like all insureds) have two competing interests - I want my consumption of health care to be unfettered, but since I have to pay for it I also want to make sure that it's worth the expense.

Yes, balancing costs and benefits is reasonable and necessary, but in the post to which I replied I found your wording suggestive of the idea that the insurance company medical director necessarily was more authoritative on the medical issue in question or had some higher stake in the process. Your statement, "double check to make sure...the medical services are really necessary" is what I'm referring to, thus my "naive" comment.

It's too numerous to count how many times I've said by telephone to an insurance company medical director, "I don't care that the vital signs are normal, if YOU were standing here LOOKING at the patient as I am right now, there's no way you would discharge her home today".

The point is, PATIENT ADVOCACY (ie, doing what's right for the patient). I'd argue that in the balancing of costs vs benefits, the attending doc (more than the insr company medical director) has a higher stake in achieving proper balance because the attending doc has both a legal obligation (malpractice) and cost containment obligation (can be dropped from insurer network if cost-per-case is excessive).

The insurance company medical director has ZERO downside risk in denying a day or two of hospitalization. ZERO patient advocacy is involved.


The doctors, hospitals, and other providers lack any economic incentive to try to minimize costs that will be paid for by third-party insurance.

I think to say "any" is wrong. Cost-per-case metrics have been used for the past decade by insurers to exclude providers, and case-rate arrangements have been increasing each year as well. Also, capitated plans have been around for many years. But, yes, all of those arrangements represent fewer health care dollars than FFS.

Going forward, thankfully with the ACA we have started the process of structurally changing health care reimbursement from incentivizing overtreatment to pay-for-performance (or, at-risk reimbursement).
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