Blue Cross and Blue Shield of Maryland's plan to slash specialists' fees will cost doctors $52 million in 1995, according to calculations by state regulators.
Although Blue Cross officials refuse to disclose how much the fee cuts would save them, insurance regulators yesterday estimated the total would be about $52 million, based on information the company has provided to the state but which has not been released publicly. These savings would represent lost income for most of the more than 11,000 doctors who have contracts with Blue Cross.
The company, the state's largest insurer with 1.4 million subscribers, informed the state insurance commissioner's office Tuesday of the plan, which would take effect in January and result in fee reductions of up to 25 percent. Commissioner Dwight K. Bartlett 3rd will hold a public hearing Jan. 9 and 10 to determine how it would affect consumers and the company.
While the company's plan enrages many specialists, it sparks some praise from apparent beneficiaries: primary care doctors, such as internists and family physicians, who will receive fee increases of as much as 13 percent.
"We certainly are happy for any small increment that comes our way," said Dr. Louis O. Olsen, past president of the Maryland Academy of Family Physicians. "We're as pleased by the fact that there is recognition for the importance of the work that we do and that in itself is encouraging."
But some primary care doctors doubt the proposed increases will ever materialize. Some also worry that the plan, which replaces a long-standing fee formula with a new method for calculating the value of doctors' services, will provoke deeper divisions in a profession already divided by the disparity in income between specialists and primary care doctors.
"It has the effect of pitting specialty groups against each other, only to the advantage of the insurance company," said Dr. Joseph Zebley, a family physician who is co-chairman of the legislative committee of the state medical society and secretary of the Baltimore City Medical Society.
Family doctors in the mid-Atlantic region had average net incomes of $101,500 in 1992, less than half of the $230,000
earned by radiologists and the $228,000 taken in by surgeons, according to the latest data of the American Medical Association. Obstetricians and gynecologists earned an average of $215,000.
The Blue Cross plan is in line with a national trend in which insurers are emphasizing greater use of primary care doctors and less use of expensive specialists. Health maintenance organizations, which closely manage patients' care, are leading the way, cutting specialists' fees and offering financial incentives to primary care doctors, such as internists and family physicians.
"Essentially it is what the marketplace is doing around the country," observed Gerard S. Anderson, professor of health policy and management at the Johns Hopkins School of Public Health. "The marketplace is recognizing that there's a surplus of specialists in the United States and either a near balance or potential shortage of generalists. And so the marketplace is working to re-engineer these prices so they're more in balance with supply and demand."
But while greater use of primary care services is widely recognized as good, medical experts like Dr. John D. Stobo worry about the change being driven purely by market pressure.
"I think the marketplace tends to be chaotic, capricious, and we're talking about a very important issue: that is how we train the right number of individuals and the right type of individuals to practice medicine and deliver care, but also to continue the tremendous advances that medicine has achieved in innovation and discovery," said Dr. Stobo, chairman and chief executive of Johns Hopkins HealthCare, which provides clinical services to patients.
"If you look at all the major advances that have come about in the past half century, they have emanated from the areas of $H specialty medicine and we have to be very careful about not losing that," he said.
While not criticizing Blue Cross, Dr. Stobo said the company's fee plan "sends a message if you are interested in specialty medicine simply because the reimbursement is high, you better think again."
Dr. Herbert Muncie, chairman of the Department of Family Medicine at the University of Maryland Medical School, said he'd like Blue Cross to increase use of primary care services without reducing specialists' fees. If the company wants to cut costs, he said, it ought to do so by discouraging unnecessary services.
"In other words, pay people for their work, but not overutilize resources," Dr. Muncie said.
The AMA warned through a spokesman that cutting specialists' fees "could result in unexpected and unwanted consequences. There are situations where a patient really would want a super specialist who is extremely well trained and well qualified, and that person may very well earn the higher income he or she receives."
WHAT DOCTORS MAKE
Mean net income (income after expenses, before taxes) for physicians in the mid-Atlantic region, 1992
Field of practice .. .. .. Net income
General/family .. .. .. .. $101,500
Pediatrician . .. .. .. .. $110,300
Psychiatrist . .. .. .. .. $125,900
Internist . .. .. .. .. .. $152,700
gynecologist . .. .. .. $215,400
Surgeon ... .. .. .. .. .. $228,300
Anesthesiologist ... .. .. $229,700
Radiologist .. .. .. .. .. $230,300
All physicians .. .. .. .. $168,600