One theme of this blog has been physicians' relationship with health insurers (recently addressed here, and there). Two stories over the transom today show how doctors vary in their ability to respond positively to change.

The California Medical Association is unhappy with two mergers: Anthem & WellPoint, and UnitedHealthCare & Pacificare.  Both resulted in California health insurers being taken over by competitors based in Indiana.  According to the San Francisco Business Times, The CMA's campaign revolves around lobbying the state to ramp up "enforcement action, fines, and a requirement that Blue Cross be compliant with state law."

Certainly, compliance with state law should meet with anyone's approval, but how will big fines reduce the cost of health insurance.  Furthermore, what if the law is an ass?

Over-regulation leads to artificially high costs, which smaller competitors cannot bear, which leads to mergers, which leads to reduced competition and dissatisfaction.  California health insurance is bound by dozens of state mandates (evaluated in the U.S. Index of Health Ownership) that contribute to this unsatisfactory state of affairs.

What de-regulation does the CMA recommend to correct this? Well,......none actually - just state action to tilt the playing field in favor of the medical guild.

The Wall Street Journal's (always reliable) Vanessa Fuhrmans reports (subscription required) on a West Virginia doctor with a different approach: change the game entirely.  For a monthly pre-paid fee of $125 for a family, Dr. Vic Wood, one of the vanishing breed of family doctors, will see anyone whether she has insurance or not.  The fee covers office visits, labs, X-rays and generic drugs too!

How's it going? Dr. Wood runs an 11-hour day and logs 15,000 visits a year.  The only unhappy party seems to be West Virginia's insurance commissioner, who appears to have so little productive work to occupy her time that she decided to threaten Dr. Wood with an allegation that he is operating as an unlicensed insurer!

But Dr. Wood has not shut the door on actual health insurers.  Many of his patients have consumer-directed health insurance with Health Savings Accounts and he wants to ensure that their insurers count his pre-paid fees towards patients' annual deductibles.  An lobbyist for health insurers thinks Dr. Woods' fees are too high.  Unfortunately, Dr. Wood has been wasting a lot of time in the state capital "counter-lobbying" for the right to practice medicine as he and his patients prefer.

Will he succeed? Will health insurers negotiate with him in good faith about accomodating their business models? Time will tell.  In the meantime, it's good to see another individual physician innovate where organized medicine tends to simply say "No"!