A bill to drive physicians out of practice in the state of California

A guest column by the American Society of Anesthesiologists, exclusive to KevinMD.com.

If you have not yet heard about Assembly Bill (AB) 3087, a bill that was presented in the California State Assembly this spring, you should keep reading and be very concerned. This bill, introduced by Assemblymember Ash Kalra (D- San Jose), is the latest effort by special interests to unilaterally implement state control of physician practices and payments. It is also one of the most poorly conceived and dangerous bills regarding health care that we have seen in California in some time. Unfortunately, the bill’s fundamental concepts could metastasize to other states.

As noted by the California Medical Association (CMA) in its letter of opposition to the Assembly Health Committee, “The bill establishes an unelected Commission of nine individuals who are charged with setting physician and hospital rates for the entire commercial market in California.  This Commission is funded in part through the use of physician licensing fees even though physicians are expressly prohibited from serving on the Commission.  Physician licensing fees will also be appropriated to pay for the sponsors of the bill to lobby and receive witness fees to testify in front of this unelected commission.”

Furthermore, the base rates for setting physician, health care provider, and hospital prices in the commercial insurance market would be based on a percentage of Medicare rates (which is not an appropriate benchmark for determining out-of-network payment) and would tie this to a global cap based on the state’s gross domestic product (GDP). If spending is capped, inevitably delivery of patient care would be rationed. There is a potential appeals process, but the same commission that sets rates would be in charge of the appeals. Finally, there would be a blanket prohibition on out-of-network payments.

If this sounds to you like a setup for a race to the bottom of the food chain for physicians, you would be correct. When you set payments at percentages of Medicare to a state GDP cap, prohibit physicians from participating in the price-setting commission, and use physician licensing fees to pay for the commission to fix their prices, I’m not too interested in continuing a discussion about how this might work, even if the bill is revised. To quote the CMA letter, “Physicians are not a public utility and should not be treated as such.”

If enacted, this bill is more likely to dramatically restrict patients access to care, promote early physician retirements and a physician exodus from California, as well as deter the entry of young physicians into practice in California, than anything we have seen to date.  If the bill’s authors were truly serious about addressing physician shortages in our state, they might have started with provisions to assist medical and osteopathic students with tuition and increase funded positions in residency and fellowship programs, so that students can finish their training. Medical students currently carry about $200,000 of debt after graduation on average, and 25 percent of them owe even more.  Countries where health care costs and compensation for physicians are state-controlled in some manner typically do not require medical students to pay for their own education.

If you have a devious mind or believe in conspiracy theories, you might suspect that the actual point of this bill may truly be to drive physicians out of practice in the state of California.

Since hospital payments would be fixed by the commission as well, the effect of AB 3087 would likely also be to force struggling, smaller hospitals out of business completely. Californians deserve high-quality, safe medical care from hospitals, physicians, and other health care professionals whose work is respected and supported, not attacked, by their state government.

The California Society of Anesthesiologists (CSA) is united with the CMA, hospitals, payers, and other organizations in opposition to AB 3087, and other organizations in opposition to AB 3087, and we will do everything we can to advocate for the bill’s defeat.

Linda B. Hertzberg is an anesthesiologist.

Image credit: Shutterstock.com

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