More on the folly of cutting physician reimbursement

It never works to save money. This will lead to an increase in the volume of procedures, further driving up health care costs:

When physician fees are capped, the number and complexity (or volume and intensity) of services furnished to Medicare beneficiaries simply increase, including more frequent and intensive office visits, and a rapid increase in the use of imaging techniques, laboratory services, and physician-administered drugs, which will lead to price caps on pills and procedures in fairly short order. (According to a study by the World Bank, for every dollar that price controls reduce doctors’ fees under Medicare, physicians recoup 40 cents by increasing volume.)

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  • anonymous

    Guess what? There is a finite amount volume may be increased. There are 24 hours in a day, seven days a week, and 365 days a year. It is folly to think that doctors can “increase volume” much beyond what has already been increased. Besides that, bundling of services and prohibitions on payment for services within certain timeframes mean doctors are already not compensated at all for necessary services in some circumstances. The local Medicaid carrier here for instance will not pay for a test and an office visit the same day, so patients have to return a different day for necessary testing. Since this is impractical, the physician can respond by doing the test for free, or drop off Medicaid.

    Realistically, doctors have the choice of working more hours, earning less, or not accepting Medicare. Guess which choice more physicians are making? This is why you are starting to see alternative practice modes emerge such as concierge medicine, wellness medicine, anti-aging medicine, and cosmetic medicine grow.

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