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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