Medpundit looks at how the Medicare cut affects her. “How does that translate into day to day life? It means that my staff didn’t get a cost of living raise this year. It means that I’ll have to drop their health insurance if the premiums increase. And it means that I’m working harder – double booking patients when I can and adding an extra half day to my work week. Hopefully, I’ll break even and avoid a decline in my own wages.”

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  • Anonymous

    Kevin:
    Is this blog getting away from you?

  • dr john

    The Medicare payment formula amounts to a price-control scheme, and price controls never work, no matter the industry or service. Price controls always whip-up demand while they simutaneously limit supply; that’s why they always lead to shortages and lines.
    Let’s see: it’s no longer worth having Monday night hours, nor is it worth tackling difficult, time-intensive cases — they can go to the ER.
    (Did I mention that price controls always lead to a misallocation of resources?)

  • TXMed

    I’m ignorant of this. However, isn’t it inevitable that Medicare will reach a level of market control, where so many people are covered by it, that you’ll have to take the Medicare covered time-intensive case, because there’s no other non-Medicare patients to fill the spot?

    I keep hearing from doctors that cuts will reduce the number of physicians who see Medicare patients. Medicare seems to be growing, though, and eventually there won’t be the non-Medicare patient base for physicians to be so choosy will there?

    Maybe not. Someone clue me in though.

  • Anonymous

    I think you will first see regional inequities. Medicare varies its payments by a formula that takes into account general costs in a particular area. The differences don’t always make up for what can be substantially higher operating and personal living costs in some cities versus others. In some very high cost cities, fewer doctors accept assignment since it is not possible to operate without collecting amounts larger than the Medicare allowable. It is possible that these practices will spread to areas where they were not previously as common.

    You will likely see moratoriums on new patients being accepted who have Medicare. Some practices will stop taking new Medicare patients and seek to replace those attriting from the practice panel with patients who have better insurance or who can pay in cash.

    Another strategy will be to offload patients who are even worse liabilities to a practice’s fiscal health than are Medicare patients. Medicaid and certain managed care plans are typically in this category, low-yield but high-demand. So are “charity” cases that are accepted under very lenient terms by practitioners who do so out of a desire to provide services to the needy that would otherwise not be available to them.

    Finally, where no reasonable return can be made from working, the extreme example of the entire payor market reducing/fixing the price below the costs of providing service (including fair wages for the doctor), then you will see practices close, and what will remain will be only enough providers that can survuive on a cash-pay basis; probably many fewer than existed before. The departures will be most acutely felt in specialized and high-delivery-cost services. So people in need of specialist services may find themselves travelling farther to get those services.

    In a market system, there is such a condition as no market, and it happens when prices are fixed so that no adequate return can be made on the investment of capital and labor. I don’t think we have ever seen that in the USA in a significant medical market, but that certainly doesn’t mean it couldn’t happen.

  • Eye Doc

    You don’t have to completely stop seeing Medicare patients altogether, although that’s happening all over the country. You can just stop providing difficult and time intensive services that aren’t worth the low level of reimbursement. Difficult patients will be shipped off to the academcic or tertiary care centers, procedures that pay poorly won’t be done.

    For example, I can say to a patient who wants cataract surgery “I’m sorry Mrs. Smith, but I just don’t think your cataract is ready to be taken out yet ” etc. etc. A lot of rationing can be done that way.

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