The Restaurateur Who Thought Like a Pathologist

Again, the talk of not healthcare reform but rather healthcare payment reform and the interests of lawmakers, physicians, patients, payers and industry at stake with potential significant cost/reimbursement and research budget cuts proposed has led me to thinking, without politicizing, how bizarre it all really can be.

My first year of medical school a friend and I rode our bikes down to the Daley Center to hear candidate Mr. William Jefferson Clinton and his wife, Hillary Rodham Clinton speak in September of 1992.  “Hillarycare” was going to threaten the entire medical establishment.  Then “Obamacare”, now a “Repeal and Replace” or “Trumpcare”.

Between the Accountable Care Act and now, laboratories took a hit on reimbursements to some of the most commonly used codes for surgical pathology – the biopsy CPT code (88305) and the immunohistochemistry code (88342), including this being replaced for a year by a “G code” system. Now we have 88342 back.  But if we go back to the future, back to 2014, lab Armageddon was predicted by many.

It didn’t really happen. Many labs did not close and new labs still opened. Not at the pace at which they did before and some labs consolidated their technical resources which likely provided some competitive advantages while maintaining costs/expenses/margins leveraging economies of scale.

But in 2014 it seemed things could go a different way including for one pathologist who opened up a restaurant – courtesy of McEvoy and Farmer – IVD market observers since 1986. Who knew healthcare could be so complicated?

In the summer of 2014 a certain American pathologist decided that he couldn’t stay in business anymore, given the 88305 and 88342 cuts, so he decided to open a posh restaurant. He was loyal to his staff, so he gave his histotechs jobs in the kitchen, and he gave his sales team jobs as waiters. But old habits die hard, so when the first customers came in there was an unusual back-and-forth…

Suave banker, obviously on first date with a lovely lass: May I see the wine list, please?

Former lab sales manager/now head waiter: Certainly, sir (opens the wine list and hands it to Romeo)

SBoFD: Hmmm, I think we’ll try this Bordeaux.

Lovely Lass: Which way to the ladies room please?

FSMnHW: Just past the bar, then to the left, ma’am (LL excuses herself)

SBoFD: (now alone with waiter) Excuse me, but what’s with the three price columns on the wine list? I’ve never seen this before. The first column says “co-payment with insurance,” this second column here – Ack! I could buy a used car for some of these prices! says “full payment without insurance” and the third column says “Wink, wink – the sum we actually expect to collect from you if you don’t have insurance.” The prices in that column range from 17% to 43% of the second column prices, depending on the wine. I’m totally confused. And what kind of insurance are you asking about, anyway?

FSMnHW: Restaurant insurance, sir

SBoFD: Restaurant insurance?

FSMnHW:Yes sir, restaurant insurance. If you have a current policy with Aetna or New York Life, we bill them for 60% of the price in the uninsured column. If you have a policy with some lame-ass carrier we don’t do much business with, we probably bill them at 85% of the price in the uninsured column, but your co-payment stays the same. If you don’t have insurance, then we let your date think you’re paying for the $500 bottle, and it’ll say $500 on your check, but all you have to give us is $150 and you can walk out the door without being chased down the street. And there’s a page at our website that explains how you write off the $350 balance anyway (as a customer service).

SBoFD: Cool, and you’ll still bring a bottle to the table with one of those five-hundred-dollar-labels?

FSMnHW: Yes, of course, sir (clears throat loudly as LL returns to the table.

LL: So did you decide on the Bordeaux?

SBoFD: Waiter, I’ve got an Aetna Platinum card here – take down the number will ya? I think we’d like a tour of the rare bottles in the cellar….

In the US last year, Medicare accepted 92% of the claims filed for histology staining, flow cytometry, molecular oncology, and tumor markers, but reimbursed between 17% and 42% of the values of the invoices presented. The financial mechanisms for paying for cancer diagnostics in the US have degenerated into a silly game of cat and mouse.

Is this any way to run a seventeen billion-dollar a year industry?

In what other realm of our lives would we tolerate this economic model?