Primary care is disproportionally hurt by Medicare cuts

Doctors don’t garner much sympathy when they rail against the perpetual threat of Medicare reimbursement cuts.

In a story from CNNMoney.com, a primary care physician provides some stark reality.

In an independent solo primary care practice, employing an office staff and two nurse practitioners for instance, fixed costs add up to $60,000 per month. A 21% cut in Medicare reimbursement, assuming an average sized Medicare panel, can take away $3 out of every $5 a physician earns.

Compound that with the pressure for doctors to adopt expensive electronic medical records, along with rising malpractice insurance rates, and it’s easy to see why generalist doctors get disproportionally hurt by any decrease in Medicare payments.

Furthermore, private insurers often base their rate schedule on Medicare’s, so it’s likely their payments will correspondingly go down as well.

Two points become apparent from this situation. One, it’s another disincentive for any newly graduated doctor to pursue such a financially risky field like primary care; and, two, it’s apparent that the days of the solo practitioner are numbered.

Primary care practices will have to function as loss leaders, surviving only after by being bought by hospitals or larger physician organizations.

View 14 Comments >