Stanley Feld M.D.,FACP,MACE
Physicians might not now understand the exact implications of President Obama’s healthcare reform act. The impact will be terrible for physicians and their patients.
“The act will reinforce the worst features of existing third-party payment arrangements in both the private and public sectors — arrangements that already compromise the professional independence and integrity of the medical profession.”
I am writing this for both patients and physicians. Both must increase their understanding of the provisions of President Obama’s healthcare reform law. The law will decrease, not increase, physicians’ ability to deliver care.
- Physicians will find themselves subject to more, not less, government regulation and oversight.
- Physicians will become increasingly dependent on unreliable government reimbursement for medical services.
- Medicare and Medicaid payment, including irrational government payment updates, are preserved but expanded to larger portions of the population. Limited federal funding will result in lower reimbursement to physicians.
- President Obama’s healthcare law will create numerous bureaucratic agencies. These not elected agencies the authority to dictate health benefits, and medical treatments.
- Physicians will not receive serious tort reform relief. This is a major problem in the current system. There are no provisions in the law to compensate for the liability expenses.
- Physician surveys reveal deep dissatisfaction and demoralization among medical professionals as illustrated in my blog entitled the Vanishing Oath. I predict the dissatisfaction will intensify.
Eighteen million people are expected to gain healthcare coverage through Medicaid in the next ten years. Medicaid is partly funded by the federal government and the individual states. Medicaid is administered by individual states. States outsource administrative services to the healthcare insurance industry. The federal government decides on the percentage of funding it provides to each state. Different states get different levels of funding according to the deals state representative make with the federal government.
There are many problems with increasing the Medicaid burden on the states.
- States are broke. The cumulative amount is $3.1 trillion dollars in unfunded liabilities. There is a $55 billion dollar collective gap between states’ income and obligations next year.
- Some states have more people who will qualify for Medicaid than others.
- States will have to raise local taxes on the middle class.
- Medicaid reimbursement is lower than physicians’ costs to provide the service.
- Many physicians do not accept Medicaid patients, creating a work force shortage.
Medicaid reimbursement is 56% of private insurance reimbursement. Medicare pays 81% of private reimbursement. However, private insurance reimburses 60% of physicians’ billings. Therefore, Medicaid pays 33.6% of the billed rate and Medicare pays 48% of the billed rate. Clearly, it is better for physicians not to accept Medicare, Medicaid or private insurance.
Reimbursement for Medicare and Medicaid services will be lowered further by President Obama’s healthcare reform act. The government cannot afford to increase reimbursement.
Medicare physician payment is annually updated on the basis of a defective Sustainable Growth Rate (SGR) formula.
The SGR cumulative reduction has been delayed until November 30th. Medicare reimbursement will be reduced by 21.3% percent on December 1st. The impact on the physician workforce is not difficult to imagine.
Rather than Repairing the Healthcare System, President Obama is moving forward in destroying the healthcare system.
Instead of trying to fix the unaffordable government entitlements and making them affordable with satisfied stakeholders, President Obama is expanding the entitlements and making them more unaffordable to patients and the government.
President Obama’s problem is the continuation of the negative elements in the healthcare system.
What is going to happen when the entitlement is expanded?
President Obama’s healthcare law does not change the general pattern of the government's systems of physician payment. It increases government control over physicians and adds layers of bureaucracy and regulatory restrictions to the delivery of medical care.
Three new bureaucratic agencies are created and have a direct impact on physicians and the practice of medicine.
- Patient-Centered Outcomes Research Institute. The Institute will be financed through a Patient Centered Outcomes Research Trust Fund. By 2013, the fund will receive $150 million dollars a year from the government. Its mission will be to examine clinical effectiveness of medical treatment, procedures, drugs, and medical devices (Dr. Donald Berwick.) Just imagine the amount of government control this organization with have on a physician’s medical decision making ability.
- The Independent Payment Advisory Board. Its goal is to reduce the per capita growth rate in Medicare spending. It will be a 15 member board appointed by President Obama. Its recommendations will be passed on to the CMS director. This is where rationing of care begins (Dr. Don Berwick). This Board increases the power of the executive branch and weakens congressional power.
- The Physician Quality Reporting Initiative. Its goal will be to focus on the quality of medical care delivered to Medicare beneficiaries. I have not seen an appropriate definition of quality medical care. The initiative will institute rules and regulations. These rules and regulations will be time consuming to physicians and distract from patient care. This Board will try to develop pay for performance rules. Pay for Performance will not work for all of the reasons I discussed earlier. Government bureaucrats are good at making rules and regulations. The rule may be inefficient and ineffective. The government has not been proven efficient at implementation and enforcement.
President Obama should be constructing a healthcare system that eliminates the defects in the present system.
President Obama is disregarding consumers’ power and intelligence. If he created a system in which every consumer was responsible for his own healthcare dollars and his own health, he would be creating a system that would work for patients, physicians and the government. The healthcare insurance industry would have less expense and make less profit.
Instead, he is creating a system that is going to make everyone unhappy.
There is more grief ahead.