This was not supposed to be a key element in healthcare reform, but it is now. I have covered a lot of this in the last 2 years here at the Medical Quack. Not too long ago I posted about a hospital in Orange County who no longer took “employer” provided insurance from United. It even confused a PR person at United who called me and said they have a contract there, and yes I agreed they do, but it was the “employer” provided element that excluded those patients, so private and other plans are ok. Anyway I thought that was interesting to see even internally how the folks that work for some insures get confused too. It’s a very complex world out there and most of the employers were being migrated from the old “Pacificare” contracts over to a “United” contract. The link below was from April of 2010 and the big discussion here were the “capitation” rates. 
Employers in Orange County Looking for New HMO Contracts as St. Josephs and Some Others Begin Cancelling Agreements with Pacificare (UnitedHeatlhCare) – Employer Capitation Contracts
Not a believer in the impact of algorithms yet? This post should somewhat perk some curiosity at minimum. The point being made here is that physicians and their groups are looking at what they can afford to take and not to take and there are a few other elements that leave a bad taste for doctors too with reimbursement. One such item was a practice from United to where they automatically deducted dollar amounts not connected to specific claims. Now in addition to low compensation rates deducting an amount they felt was over paid earlier without a specific claim reference adds some accounting nightmares, enough to provoke a lawsuit. I have personally heard this complaint voiced. 
UnitedHealthcare ERISA Class Action Lawsuit Expanded to Include DME and Ambulatory Surgical Center Providers
“So the payment made on Jane Doe’s claim 3 months ago is being rescinded and deducted on an current EOB for other patients where Jane Doe is not even on the patient list I can see where this affects the practice management software for the ambulatory doctors in the fact that the EOB is now short paid, and the short pay is not for a patient listed on this EOB for compensation, and thus the adjustments to keep current with all claims could stand to be an accounting nightmare.”
Now let’s come full circle with some recent news with credit agencies and their mergers and acquisitions and take a look at what they are doing. The folks over at Harvard better get that study in high gear that is supposed to give us the impact of mergers and acquisitions in healthcare. In the meantime you can find plenty here by searching that Google box above and used the words “subsidiary watch”. These companies offer services to help the doctors determine who is not going to potentially pay and offer some software with predictive behavior and credit information, which the doctor can pay for. They get it both ways it seems at times! The software will help them identify the patients who are a risk and I wonder if this focus is being marketed to somewhat put the fact that low compensation contracts are eating away at the root of all of this.
Experian to Buy Medical Present Value For $185 Million–More “Algos” On The Way To Market Behavioral Analytical Software Processes? –Subsidiary Watch
This company says their credit algorithms can also help predict what patients will and will not take their medications which I see as a total mis match of analytical data for real decision making, and they intend to market insurers and pharmaceutical companies, again are we trying to focus outside the areas of low compensation once more and make the patient the bad guy? What do you think? I like data intelligence and how much smarter it makes us, but also realize that analytics can get out of hand with promising less than desired results but raise profits so don’t believe that every algorithm is the gospel, especially with sales and marketing on steroids today with selling our data. Somebody has to talk about this fact and I guess it’s me today.
FICO Credit Score Company Develops New Medication Adherence Scoring Program–Risk Management Assessment Algorithms Created to Derive Profits For Corporations–Fail!
In addition, some IPAs who maybe used to pay doctors what could be considered fair are now being bought out by insurers and we know pretty much when that occurs it may just be time for new contracts and I don’t those negotiated rates going up very much if at all. Caremore, a big senior HMO in southern California was bought by Wellpoint and also Memorial Healthcare, was bought by United Healthcare, so as this occurs things change. Don’t over look the availability of data that the corporate owners get too, as they will use it one way or another.
There's lot of lawsuits ongoing too relative to compensation with physicians, hospitals and surgical centers and last year United settled the 15 year old under payment suit with the AMA. Algorithms that low balled out of network charges for that long, think about the power of those algorithms and the formulas and all the big insurers jumped in and licensed their formulas too, so more lawsuits where other insurers on the hook too.
Little me years ago used to help doctors with some small programs I wrote to where they could reconcile their EOB statements and mistakes and errors were found, so that’s why maybe I focus on this as I have seen it and helped fix some of this. It’s not as bad as it used to be now that more healthcare companies and doctors are using technology but back 10 years ago it was a big issue of using analytics 
against those who did not have it nor had the time to manually reconcile.
Outpatient Surgery Centers File Class Action Lawsuit Against UnitedHealth and Ingenix for Underpayments
So there’s part of the story from this point of view and remember those algorithms and formulas generate the parameters for new contracts.
One more time for good measure, read Charlie Siefe’s book on “Proofiness” to kind of get a good start on how all of this works today. He’s a professor at NYU and said he was going to like the math at the Quack <grin>. I am keeping up my efforts here to help make sense out of a somewhat senseless world at times and again, it’s the math for profits driving the contracts. BD
“Proofiness–The Dark Side of Mathematical Deception”–Created by Those Algorithms
U.S. doctors are turning away an increasing number of patients, including those with private insurance, according to a study in the Archives of Internal Medicine.
Physicians were willing to accept about 88 percent of patients who had private insurance in 2008, down from 93 percent in 2005, the study released today found. Patients in Medicare, the U.S. health insurance program for the elderly and disabled, also had a harder time finding a doctor. About 93 percent were accepted by physicians in 2008, down from 96 percent in 2005.
The drop in doctors willing to take private insurance was caused by low payments for services as well as administrative difficulties, said Dr. Tara Bishop, an assistant professor of public health at Weill Cornell Medical College in New York.
A reason that doctors may be accepting fewer patients is that some insurers have shrunk the network of doctors and hospitals they contract with to improve quality and value, said Robert Zirkelbach, a spokesman for America’s Health Insurance Plans. The group is the Washington trade association for health insurers led by Indianapolis-based WellPoint Inc. (WLP) and Philadelphia-based Cigna Corp. (CI)
Doctors in U.S. Turning Away Insured Patients on Low Payments, Study Finds - Bloomberg
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