Medicare cuts will strengthen doctors’ negotiating position

Doctors will soon be wagging the reform dog.

Look at it this way. Expansion of insurance coverage to the 31 million more Americans, as envisioned in the current reform bill, will require more doctors to care for them. The starting entry of 78 million baby boomers in the Medicare pool, starting in 2011, will also take more doctors.

As everybody knows, coverage does not equal access. This is most vividly illustrated in Massachusetts. It has 97% coverage, but its waiting lines to see a doctor are twice the national average. Yet Massachusetts, after Washington, D.C., has the highest number of doctors per capita as any other state. How long will waiting lines be in states will fewer doctors and larger Medicare and Medicaid populations?

Several factors will contribute to doctor tail – reform waging phenomenon.

• A shortage of doctors, estimated at 50,000 but headed towards 150,000 by 2020 exists.

• Physician hours spent practicing per week have dwindled by about 10% over the last 5 years, due in part to dwindling reimbursement and desire for saner and more balanced work hours by younger doctors and women physicians.

• Starting on March 1, using the Sustainable Growth Rate formula, Congress will cut physician Medicare reimbursement by 21%. Even if a fix or patch occurs, doctors get the message. Add to that more than 40% cuts in certain cardiology and radiology fees, and the handwriting is even more clearly on the wall.

• Presently doctors are not accepting new Medicare patients at about the 30% level and new Medicaid patients at a 50% rate.

• Doctors are rapidly avoiding third party payment – from Medicare, Medicaid, and HMO/PPOs – because of lowered reimbursements, regulation expenses, and harassment burdens by switching to new business models, involving cash only payments, direct contracting with patients, and concierge practices.

A major access crisis is brewing out there – and federal and state policy types know it. They may attempt to short-circuit the crisis by tying medical licensure to acceptance of patients in federal and state entitlement programs. This is already in the works in the Massachusetts legislature.

No matter what happens, government officials will have to explain to an angry public why people can no longer find a doctor to care for them in their communities, why no specialists are available in emergency rooms, and why people have to travel long distances to find a doctor.

At that point, the doctor tail will be wagging the reform dog, and doctors will be in a better negotiating position.

Richard Reece is the author of Obama, Doctors, and Health Reform and blogs at medinnovationblog.

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  • Happy Hospitalist

    I love the part about forcing physicians to accept insurance.

    “I’m sorry Mr Jones, I understand you have Medicare and I am forced to accept you as a patient, I just don’t have an opening for another twelve months. Would you like me to book you now?”

    That’s how you get around those slavery rules.

  • Evinx

    It is hard to comprehend why so many doctors are volunteering to be enslaved.

    Medical licensure will be, as Mass is trying to do, linked to accepting whatever federal and state entitlement programs decree.

    Is there any physician who has read Hayek’s Road to Serfdom?

    Stop being whining facilitators and opt out of Medicare. Force the issue and then, you will be free with dignity and ultimately, a financial future free of political machinations.

  • Jenga

    I agree happy, Mrs. Jones I know you think you need a knee replacement, but I think you should try these exercises. Good luck!

  • lazza11

    I believe that Doctors need to come aboard (or initiate) measures to implement cost control, or they will have cost control forced upon them (like in MA)

    At present the US spends over 16% of its (huge) GDP on health care, and the rate of growth is unsustainable and will bankrupt the country if not controlled. This is simply a fact.

    Many cardiologists and radiologists make amounts that are unsustainable for the public coffer.

    Doctors need to embrace efficiency, integration of care, payment reforms that move away from fee for service, and be at the forefront of research working out the most EFFICENT and cost effective ways to care for patients. If drug therapy with generic drugs is proven scientifically to be as effective as a newer drug, or as effective as an expensive operation then that is the path that should be chosen.

    In my view the expensive boutique treatments should be reserved for cash only patients. The US government should agree to pay out only for treatments that are proven cost effective (like every other national government in the world!) This would provide a sustainable floor of treatment that everyone in the country deserves. If you have private insurance that covers more sophisticated treatment, or have the means to pay out of pocket then you should have the right to do so.

    If doctors services can be made less costly (by increasing efficiency and eliminating fancier unproven treatments) then public insurance coffers should be able to afford the rates. The more affluent may occasionally get better care, but I am willing to bet that in most cases basic treatment methodologies are sufficient – that is what the rest of the developed world gets by with and they seem to be doing fine.

    • David

      I am growing tired of hearing that doctors need to embrace cost control more willingly…I was in “school” until I was 32 years old and sacrificed my whole childhood to get the best grades, volunteer at the local hospital—to practically live in the library in college…and continue in that manner through medical school, and a grueling residency and fellowship…Now I am reimbursed under $400 for a carpal tunnel surgery and well under $1000 for painstakingly piecing together a shattered wrist…What a joke—$380…for an OPERATION!—. decades of sacrifice and preparation, daily risk of exposure to HIV, risk of lawsuits/financial ruination, for less money than the plumber or roofer…I ask how much less money would you like me to be paid for saving your hand–What is a hand “worth” that is painful, smashed, or sitting in a bucket waiting to be miraculously re-attached?

  • Primary Care Internist

    Isn’t this news conspicuously absent from the mainstream media?

  • richard

    You can get fast, cheap, and good health care – but you only get to pick two of the three.

  • paul

    yep. as weak as physicians are as a group, eventually the fact that we are the ones providing the care will give us more levarage than any other group involved in this mess. problem is, that kind of leverage probably won’t come around until we are nearing or at a complete health care system (and possibly economic) collapse…

  • E rob

    I’m all for physicians doing our share to reduce the cost of health care. There are only a few things I ask in return. 1. Ask the public to pay back my 180k in student loans 2. Give me a 40 hour work week with no additional meetings or commitees 3. Make hospitals a 7-5p arrangement 4. Allow me to only do test that are likely to change treatment or outcomes by amd sheild me from litigation 5. Tort reform- public insurance can’t sue as we are already paying for it. 6. Limit the number of hospitals in an area that provide the same services such that multiple hospitals in a community are empty 7. Only use expensive technology that is better ( robotic surgery) 8. Have doctors and nurses provide healthcare instead of doing paper work. We have problems in this country with healthcare because we expect the best technology, quality, and convenience. That isn’t cheap!!!

  • Dr. W

    The 21% cut is going to kill us who have 98% Medicare patients. Think NH and ALF’s. I now work 5 days for 4 days pay. AMA (who represents only 30% of doctors) sold us down the river for a PROMISE of POSSIBLE SGR fix. STUPID. Now they have no reason to do it. Should have gotten SGR fix BEFORE!!

  • robert littlefield

    This is the first time I have read about Kevin MD. In addition to my Paying Job I am on the Board of Directors for a Community Health Center. I have been saying the exact same things about the medical infrastructure that the U.S has currently. It is not the cost of this program that is going to create the problem it is the lack of Doctors to see the patients. In my research Texas has approx 5.5 million uninsured patients with a current ratio of 1 PC DR. for every 1100 residents. Do the math with a growing shortage of PC Dr’s and an additional 5.5 million policy holders, what do they think going to happen. The ER’s will be a total nightmare. Ma.had approx 450,000 uninsured when we adopted health reform with a ratio of 1 PC DR. to 550 residents and we still had a 7 % increase in emergancy room visits. I am so glad to read that there are other people out there that get it. YOU NEED TO WALK BEFORE YOU CAN RUN. We need to compensate PC DR’s properly and enhance the notion that it will truley be the answer to lower costs and quality medical care.

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