The following op-ed was published on August 6th, 2007 in the New Hampshire Union Leader.
Medicare is planning to cut physician payment rates by 10 percent in 2008. These reductions will continue annually, and it is predicted that the total cuts will be about 40 percent by 2016.
The topic of physician compensation generally elicits little public sympathy. After all, the average primary care physician salary in 2006 was about $150,000. Who are we to complain about reimbursement? As you will see, however, cuts in physician Medicare payments affect everyone.
Medical practices today essentially function as small businesses. Physicians are responsible for expenses like rent, payroll, employee health insurance and malpractice insurance. These costs are expected to increase 20 percent in the next nine years. During this same time, physician Medicare payments are faced with cuts of 40 percent. Already, some practices lose money every time a Medicare patient is seen. Some may find the link between medicine and money distasteful, but the hard truth is that it is impossible to practice medicine in a business model that is headed for financial disaster.
At a time when baby boomers are approaching the age of 65, some physicians attuned to this economic reality have simply stopped accepting Medicare patients. According to a recent survey by the American Medical Association, 60 percent reported that they would have to limit the number of new Medicare patients they treat due to next year’s cut. Half would reduce their staff. Fourteen percent would “completely get out of patient care.” Some seniors are already faced with calling 20 to 30 providers in the desperate hope that someone will accept Medicare.
It is unlikely that the primary care shortage will improve in the near future, as Medicare reimbursement rates continue to be a primary driver of physician salary. In a report by the Center for Studying Health System Change, incomes of primary care physicians fared amongst the worst in keeping pace with inflation between 1995 and 2003, while medical specialists fared the best.
Medical students, already burdened with an average debt in excess of $100,000, are clearly gravitating towards specialties where salaries have better kept pace with inflation. The report concludes that with “the diverging income trends between these specialties and primary care, the result is likely to be an imbalance in the physician workforce and perhaps a future shortage of primary care physicians.”
Some may be wondering if this is just a “Medicare problem.” Should you care if you have private insurance?
Absolutely. With primary care being the backbone of every health system, patients cannot have their chronic medical issues addressed in a timely fashion with a lack of primary care access. In delaying care, chronic diseases blossom into more serious conditions that are forced to be seen in already overcrowded emergency rooms.
Hospital-based care is often the most expensive and the corresponding rise in health care costs plays a major role in the increase of health insurance premiums. Unfortunately, the government responds to rising health care costs by further reducing physician payments and the cycle continues to spiral out of control.
You will hear physicians rallying against the Medicare fee reductions in the coming year. Think about how this affects you. Contact your government representative and do your part to break this vicious cycle.
Similar Posts:
- Why the Mayo Clinic is refusing to see Medicare patients
- Medicare slashes pay to doctors, and what that really means
- AMA: Why patients should care about fixing the Medicare physician payment cut
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Yes, unfortunately I am currently forced by my main hospital to see every neurosurgical pt. that comes into the ER, including Medicaid and “No-caid.” We did negotiate some call reimbusement for this, which at least partially offset the loss.
In the office, we place strict limits on public assistance and Medicare patients. If reimbursements actually fall, I plan to d/c new Medicare. We have had a few false alarms on this, so we’ll see.
You are correct in that most physicians have no idea how much it costs to actually see a patient. Its more than many think. My solution has been to expand into imaging, physicial therapy, pain managment, and outpatient surgery. Regular office visits are break even at best- just running on a treadmill. Docs need to expand their horizons and realize that payors reward diversity in treatment and horizontal integration. Just my experience.
“Not viable? Think again. All of these people, whom I know, left their practice because of declining reimbursements and increasing government/beureacratic hassles.”
You should welcome that. It makes your skills more valuable. Now, you should exploit that scarcity to cut a better deal for yourself.
“You should welcome that. It makes your skills more valuable. Now, you should exploit that scarcity to cut a better deal for yourself.”
Here’s the problem when it comes to taking care of our senior citizens. If I completely drop out of Medicare, then, if I need to get back in, by federal law, I have to wait 2 years (from the date of dropping out) to once again participate. Each patient gets an individual contract for care, and he/she can’t get reimbursed by Medicare. I can elect to go non-par, which means I can accept assignment on a case by case basis, but, again by federal law, can’t collect more than 115% of the allowed reimbursement. The check goes to the patient. While you can charge upfront in the office, try collecting from a dead patient who you saw in the hospital. You can accept assignment on such a patient as a non-par, but will only get 95% of the already low reimbursement. So – screwed, by law (!!!) and not by choice.
And we’re not scared of NP/PA’s doing our job better. Were scared that they’ll take the simple business and leave us with the REAL lengthy visits, of which we get paid the SAME DAMN AMOUNT regardless of time spent! Primary care needs a balance of both. But by sucking them away to the NP’s, you just hasten the demise of primary care.
No body said anything about doing your job better than you. Even if they do the job 75% as well at a fraction of the cost then it should be up to the individual patient to decide if that extra 25% is worth the extra cost. I do think it is fear in that there is a realization that enough would choose the less qualified at the much lower rate. As far as primary care goes… kill it now. Let the MDs do the specialist work and let others handle the primary care work.
As far as not knowing how much it costs to take care of patients, that’s the problem. We regularly have patients sent to the “Urgent Care” side of our Emergency Department (non-acute, colds, minor complaints)who turn out needing admission for something really serious. Perversely, many of the patients on the “Grown-up” side turn out to have nothing.
Medicine is not about check boxes and neat algorithms. Patients are unpredictable and some of them are medical booby-traps. We are not making widgets wiht fixed costs and predictable inputs and outputs. Medical economics are rational on the macroscopic level but down at most of our levels things are very unpredicatable…which is why so many PCPs are going to stop accepting medicare patients who, after all, could be train wrecks who will suck up vast amounts of the physician’s time but reimburse no better than someone presenting for a cold.
What no one is saying outloud is that the elites already have figured out that we don’t need good health care in this country, and they are willing to sacrifice it for corporate profits. The decision makers will always be able to purchase superior care for themselves to optimize their own opportunities for a vigorous and long old age.
For the economy as a whole, however, healthcare is a drag–for more efficient for the sick and crippled to die sooner rather than later, and as cheaply as possible. The vigorous and productive don’t need much healthcare, and the sick and lame aren’t needed.
It isn’t that they don’t see what Medicare cuts will do, rather it is that they do see it and accept it.
I think one thing that keeps getting left out of this discussion is that, by in large, physicians are altruistic. We want to help people. We don’t want to leave patients out in the cold. We want to make health care work.
When reimbursements are continually cut for primary care, medical students will continually choose to prefer specialties over primary care.
Which creates a problem we’ve all foreseen for decades: A shortage of primary care physicians, while those who remain are often frustrated at the situation.
This leaves PCPs with 3 options:
a.) be a “bad doctor” and only see patients who are profitable
b.) destroy their family life and work ridiculous hours to avoid bankruptcy
c.) quit and go into something else that makes more money (which isn’t all that hard to do).
Since option (a.) runs counter to the beneficent ethos of medicine, most doctors avoid that route, and current government restrictions make it harder to exercise option (a.) for some doctors(if you’re on call, you have to take the patient).
Which leaves either workaholic PCPs or PCPs who retire early and do something else. The vicious cycle continues, the meltdown of American health care continues, and doctors keep on warning the public that the destruction of primary care is only making things worse…. to seemingly no avail…
“c.) quit and go into something else that makes more money (which isn’t all that hard to do).”
Why do physicians believe this? If you’re a bad businessman in one field, what makes you think you’ll be any better in another? Making money is making money, no matter what industry.
“Why do physicians believe this? If you’re a bad businessman in one field, what makes you think you’ll be any better in another? Making money is making money, no matter what industry”
Clearly spoken by somebody who knows nothing of the business of medicine. Doctors’s don’t get paid via what the free market will tolerate or via ability. They are paid via what the government determines is the price per visit, procedure, etc. Private insurance keys of medicare rates. Being a good or bad businessman has nothing to do with it. I for one would love to have a free market system in medicine. But it isn’t going to happen. All you have shown anon is you nothing about the business side of medicine and our inability to pass on our cost increases to the consumers (unlike your profession). So doctor’s (PCP’s especially) go faster and faster on the hamster wheel. Which results in increased burnout, increased chance of errors, and unhappy patients and doctors. The winners here are the government and the lawyers at the expense of patients and doctors.
If you don’t have any experience in the free market, and you continually enter into bad agreements with the government and with health insurers, why are you going to be any better at negotiating deals in any other setting?
Most of you have never had to market your skills, because those contracts supply your “customers”. I completely understand your system, and it has nothing to do with the real world. But a bad deal is a bad deal, and if you can’t recognize it in medicine, how do you plan to recognize it anywhere else?
“Why do physicians believe this? If you’re a bad businessman in one field, what makes you think you’ll be any better in another? Making money is making money, no matter what industry.”
I’ll tell you from first hand experience: I did quit clinical medicine to start a business, and its quite miraculous how good a businessman you can become when you have time to review financial statements, develop business relationships, study the marketplace, etc.
Many docs could be good businesspeople, its just that clinical duties are so overwhelming, that there is simply no time or energy to deal with it.
“I completely understand your system, and it has nothing to do with the real world. But a bad deal is a bad deal, and if you can’t recognize it in medicine, how do you plan to recognize it anywhere else?”
Because CJD I used to work in private biotech firms before going back into medicine. I know a fair amount about the “real world”. Yes, medicare/medcaid/HMO’s are a bad deal. But unless you are a elective procedure doc/concierge doc there is no alternative. Saying simply “don’t sign the contract” shows how little you know about the business of medicine (despite what you think about completely understanding out system). The vast majority of patient’s have one of the big three types of insurance and unless you fall into a niche specialty that can charge cash you have no choice or you don’t have patient’s. It is that simple. How many times do people on this blog have to explain this to you? Are you dense or just stupid? Yes you can drop on or even two of the big three types of insurance but unless you fall into a niche specialty, dropping all three is not an option for most of us. Do you work in private practice or are you a government lawyer? Becasue frankly every one of your comments shows
A: You know nothing about the business side of medicine and the government/nongovernment monopolies in payers.
B: I strongly wonder based on your comments if you are even in private business yourself.
The guy who left private business for a career he says is a bad deal is lecturing others on economics.
Ahh, sweet irony.
You don’t have to sign the contract. Physicians existed before Medicare/Medicaid and even today they exist without utilizing those contracts. They even *gasp* find time to blog about it. Although how they afford the internet service I don’t know.
Criticizing others doesn’t undo your bad choices. Sack up and be a man and take responsibility for something once in awhile.
Anon 11:59… you forget that specialists don’t WANT TO SEE those patients who have primary problems that are complicated. And who is going to refer them? The NP and PA? What if they send them to the wrong specialist cause they just dont have a good sense? You seem to think that its 75% as good to see an NP. Where did you get this formulation?? I had an NP ask me to look over an EKG for them cause they “just werent sure”. How does THAT make you feel? Guess she can refer to a cardiologist. Good way to rein in costs… get a bunch of pointless, useless consults and tests, AND to boot, use up the time a specialist could have been seeing someone who could actually benefit from their expertise.
Primary care itself is the way to contain costs. If only the dopes who post here would realzie it, instead of berating it.
“You don’t have to sign the contract. Physicians existed before Medicare/Medicaid and even today they exist without utilizing those contracts. They even *gasp* find time to blog about it.”
You just don’t get it CJD. Tell you what. Why don’t you look up and find the statisitic’s about all those docs who make it without medicare/medicaid/private insurance. Put your money where your mouth is. I have been in this field for for well over a decade (after training) and have yet to see such a doc (outside of concierge/elective procedure types). Do show me all those docs out there is the hardcore fields of medicine and surgery making it on cash patient’s. Good luck. The simple fact is the big three have a monopoly on patient’s. Get back to me when you find the stats.
“Sack up and be a man and take responsibility for something once in awhile.”
I take responsibility for every patient I see, ALL THE TIME. That is real responsibility, not throwing out childish, uninformed, anonymous, insults on the internet.
“I take responsibility for every patient I see, ALL THE TIME.”
That’s great, but all professionals take responsibility for their patients/clients. I’m talking about taking responsibility for the financial choices you’ve made. Something you seem unwilling to do.
At the end of the day, you continue to expect different results from doing the same thing. Why, I don’t know. But if that’s how your mind works, you definitely don’t need to be in the truly free market.
CJD:
I am still waiting for the data that you specifically CAN’T SHOW. Leave out your worthless statements and put your money where your mouth is. Unlike you, I’ve worked in this business. I know the people who are and are not taking insurance/medicare/medicaid. I know how the only ones who cannot fall into the niche specialties and how the rest of us are stuck because pt’s are monopolized by the big three. Either show me some data to support your statement or keep your clueless statements to yourself. As I stated, I have worked in a free market system (outside of medicine) and in this system. I know the difference. Do you?
Well CJD
Your silence speaks volumes. Get back to me when you have some evidence to support your statements
Anon:
You will be waiting a long time for evidence from his ilk. He is the smoke and mirrors type not evidence-based.
Bill like a dentist.
Amazing that the dentist accepts “insurance” covering less than half of my dental cleaning and I pay the rest ($75 + $75).
My patients whine about the copays and the expense of their urology visit.
1. Medicare WILL be bancrupt by 2017 as the baby-boomers reach the age of 65 (50% are 60)
2. Fee-For-Service will become more popular. Either see the FMG (foriegn med grad) in a VA (Veterans Assoc) style system…and take a number and wait or pay the difference in what your insurer provides to get good care.
3. Deregulate Medicine. Let the docs be the McDonald’s. Cut my salary but allow me to own the lab/ct scanner / hospital / surgical center and accept all because of my better product for less.
STARCK and anti-trust b.s. is rediculous! DE REGULATE the industry. Let private enterprise SHINE!
It is amazing how the public will pay high ticket prices to see their favorite professional athletes, who make millions hitting a white ball or put an air filled piece of leather through a hoop, yet scream bloody murder when they get a medical bill. What’s more important, entertainment or your life?
Look at the problems with trauma, which happens to be the leading cause of death for those 20 – 45. Nobody wants to pay for a trauma system or subsidize physicians who take care of these patients, who are disproportionately uninsured. So right now, unless you are in an urban setting, you will have a long wait and transfer time to a place where a surgeon is willing to take care of you after you smash yourself into a telephone pole. People are dying in the process. If you don’t think this is happening, then get your head out of your ass.
Complain all you want about how much doctors make. They earn every cent. Stop paying, then you will see doctors no longer willing to get out of bed at 2 am to see you in the ER. This is already happening.
What is worth more to you, your big screen TV or someone who can stop your internal bleeding at 4 am?
Health care is probably the most elastic service on the market; in terms of, if the situation is right, people will give every dime they have for the surgery that will save their leg. This price floor that the government is instating is almost ridiculous to me. For a well educated specialized doctor, it is 13 years of post high-school training, as I’m sure most of you know, not to mention the loans and time spent getting to where they want to be. All of those costs should be reimbursed by a good salary, look at lawyers! Sure you can go grab a free public defendant, but your not going to win the case, but you now can go to the best doctor in America and whip out a card that will save you a few grand?
I am sorry to see all the anger in these blogs. As an RN (working on my master’s degree for FNP) who is married to a physician, I try to see all sides of the coin. First, We do not live in a mansion, my children do not wear designer clothes and we (like everyone else) live with a mortgage and budget. We own our own practice, situated in a small town. It is extremely challenging to run any small business. Medical practices are harder than most other businesses because we cannot control costs (usually dictated by inflation), nor can we control what we charge. When Medicare cuts reimbursement, the private insurance companies do the same, United Health Care usually leads the way. So to say, “Stop taking Medicare” really doesn’t help the financial aspect. Physician’s (and other providers) would have to stop taking all insurance. Some practices are doing just that. But that is not the reason any of us went into medicine or nursing. We wanted to help mankind. And most of us still do. The problem is how to do it without going bankrupt. My husband and I work 24/7 to keep our practice running. I answer the phones on the off hours and triage each patient. Our teenage children earn their spending money by cleaning, painting and keeping up the office. And my husband starts his day at 6:30 am. Makes rounds at two hospitals, gets to the office at 9:00 and sees patients until they are gone, usually around 6:00 pm. Then he spends two more hours returning patient calls and doing paperwork. Although the office hours are 9-5 with an hour for lunch, he doesn’t finish until 8 or 9 pm, frequently doesn’t get a lunch because he is finishing seeing the morning patients and is forced to take hospital ER call (which he is rarely paid for). Last year his salary was a whopping $100,000.00, but the practice lost $20,000.00, so in reality, he made $80,000.00. Why does he do it? Because he Cares! That seems to be forgotten in all this fighting. Lets try to work together to develop ways to enable our profession to care for all our patients. Right now, HR 6129 needs support. It will not increase Medicare payments, but it will stop the immediate cuts. Please contact your legislators to support this bill. Working together, we can make health care accessible and affordable. CaringRN
I am a third-year resident in a primary-care specialty and am happy to tell y’all that every single resident I know is thinking of cash-based practice. We all hate medicare/medicaid and the other insurances aren’t much better. Sure, we will such it up for a couple of years hamstering for some multi-specialty group, but the majority of us will abandon these slavedrivers in a heartbeat when we get a better opportunity. One of my best friends in the residency program is going to start working for a gym (!!) when he graduates. Lawyers and politicians have destroyed primary care in America and they will get what they deserve and I’m not shedding a single tear over it.
AyurMD
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