Red Adair, oil well fires and defending your fees

Neil Baum, MD

"I've done made a deal with the devil. He said he's going to give me an air-conditioned place when I go down there, so I won't put all the fires out." 
-Red Adair, Extinguisher of Oil Well Fires

Red Adair, who was famous for putting out oil well fires from 1960-1990, charged clients an exorbitant amount to douse fires since fires not extinguished could lead to significant financial losses. He once charged a client $500,007.62 to put out a fire. The client called Red Adair and said he understood the $500,000, but what was the $7.62? Red Adair said $7.62 was for the chemicals, the mud, and the explosives; the $500,000 was for the recipe of the right combination of these ingredients and when and where to put them.

Adair fought more than 2,000 oil well blowouts since 1938--most by a combination of mud, guts, and explosives.

For example, we give the patient an inexpensive injection, but knowing what to inject, where to inject it, and taking responsibility for the outcome, including any complications, is a significant part of the cost of the injection. This same analogy might apply to health care professionals. What we do is so unique that people are willing to pay large amounts of money because of our expertise and not the $10 vial of penicillin.

Physicians order tests, prescribe drugs, give referrals to specialists, and recommend surgery — almost always without ever addressing how much all of it costs.

Few physicians have cost conversations with their patients. When cost considerations come up, we are generally out of our comfort zone.

According to a recent study, cost conversations occurred in only about 28% of visits. This is not because patients do not want to discuss the cost of care but because physicians are uncomfortable with the topic. Money conversations are rarely part of most health care visits.

Patients prefer a physician who discusses cost over a physician who does not. This flies in the face of a common misconception—that patients do not want to talk about money with their doctors.

In a perfect world, costs would be discussed before treatment is instituted. If a treatment decision is made and later determined that the patient cannot afford it, you and the patient have wasted your and the patient's time.

Patient encounters that include cost discussions are usually longer than those that do not. There is a concern that bringing up costs will wreak havoc on our schedule. However, a slightly longer office visit may be worth the investment of the time that it takes to have a cost discussion.

The challenge is to address costs without consuming a lot of time.

Consider broaching the topic by stating, "We want to make sure to discuss the treatment options that are right for you. We'll also want to consider the cost to find a treatment option that works for you financially."

Encouraging patients to share their reasons for non-compliance is a much better idea. That gives everyone a chance to come up with an alternate plan (e.g., finding a lower-cost medication or giving patients samples).

Some physicians directly addressed costs, some avoided discussing costs, and some falsely reassured patients about cost concerns.

Discussing costs

Both patients and physicians are uncomfortable bringing up money. When we are involved in a patient encounter, we do not know what portion of the bill the insurance company will pay.

Physicians should acknowledge that part of their role is developing a plan that will not financially devastate the patient. When there are treatment options, including cost as a factor in decision-making should be discussed with the patient.

It is not realistic or desirable for physicians to spend time navigating the complexities of health care coverage. It is not practical for physicians to have financial conversations. It is not their area of expertise. Physicians are trained to diagnose and treat patients, not deal with health plans, and be knowledgeable about the cost of care. Physicians want what is best for their patients, regardless of cost.

A primary care physician would not try to manage someone's myocardial infarction; they would call a cardiologist. Physicians need someone with insurance expertise to discuss cost issues. That is where revenue cycle staff come in. Ideally, physicians should direct all patients to the person(s) knowledgeable about care costs. This is not part of the job description of the receptionist. Scheduling the next appointment and other front desk responsibilities, and trying to manage the patients' finances is too many actions for one person.

Consider having a financial person near the reception and treatment rooms and allow privacy when conducting financial issues. Patients agree on a treatment plan during the doctor-patient encounter, usually in the exam room. visit. At that time, they may not know what their insurance will cover. The trouble starts later when patients discover the cost of care is not covered. Some decide to forgo the ordered tests or expensive drugs.

Discussing the cost earlier buys time to develop a better plan. For example, a discussion on medication costs might be, "Many new medications for weight loss have costs exceeding $1000 a month. We can check with your insurance to see if your plan covers these expensive medications." This sends a message to the patient that the doctor is sensitive to costly medications.

Suppose cost is a barrier to filling a prescription or undergoing a test. In that case, physicians should ask patients to contact the office so everyone can work together on an alternate plan.

Physicians need accessible information to ensure that prescribed medication is on the insurer's formulary.

A patient visits the pharmacy and learns about a high copay because that drug is not in the health plan's formulary.

Physicians need this information in real-time as part of their normal workflow. For example, when a physician orders a diagnostic test, automated tools can perform checks: Is prior authorization needed? Is the test a covered service? Are medical necessity criteria met? Is the plan even in the network? Now there are EMR programs that will reveal this information at the time of the doctor-patient encounter.

Likewise, other options should appear automatically if a non-formulary medication is ordered. Indeed, AI is going to make this possible. This can reduce denials, improve the patient and physician experience, and help to improve compliance.

Bottom Line: Physicians need to develop communication skills to discuss the cost of care. Any time a patient or a payer questions the cost of care, tell them the story about Red Adair and his fees for putting out the oil well fires. This usually stops all discussion about a physician's fees. Next, be proactive about the cost of care with patients. Don't be like a deer looking into the headlights and be paralyzed when cost discussions are appropriate to provide exemplary patient care. We don’t need to be defensive about our fees.

Neil Baum, MD, a Professor of Clinical Urology at Tulane University in New Orleans, LA. Dr. Baum is the author of several books, including the best-selling book, Marketing Your Medical Practice-Ethically, Effectively, and Economically, which has sold over 225,000 copies and has been translated into Spanish.