CheapIV.com

Medicare Cut Goes Through

admin on 06 19, 2010

Well, it was very depressing news I got this morning: Congress did not back the Doctor fix and went through with the Medicare cut of 21%.  I wrote on 6/2 how this system is very fragile and this while not time sensitive to the stock market is the start of something very big.

In a nutshell, this cut is going to hurt all Medicare patients.  It is going to create a very large problem of access to Doctors.  Who will get blamed for this…the Doctors.  They are in the most difficult position because they have already been squeezed.  Main street media positions the Doctors as “rich” and they have the ability to absorbs the cuts.  Physicians have  not had an increase in reimbursement rates for the past 7 years even while the Medical Insurance keeps increasing.  Meanwhile medical expenses of their staff have gone up just as much as every other business around the country.  The majority of a physician’s expenses are tied up with  their staff.  Their margins have been squeezed by insurance companies and government lowering of reimbursements through Medicare and Medicaid.

So here is what will happen immediately:

• Doctors will stop taking new Medicare patients.  This is what has already happened with Medicaid because the reimbursement levels are too low.  More on this in a second.
• Reduce the amount of Medicare patients they see in one day. This will average out their costs over the day so they can absorb some of the lost reimbursements.
• Lay off staff. Unfortunately, the staff are the easiest place for a Physician to cut expenses.  Almost all other expenses are fixed or necessary to run the practice.
• Stop hospital care. This will be dependent on the type of Doctor, but some will stop seeing their patients in the hospital all together.  The cost and time involved in this is substantial.

Combine all of these points above that are forcing cut backs with the extra added burden of more Medicare patients being added.  They are being added from the aging population and the new Health Care bill that will role people in over the next few years.

New patients will be hard pressed to find a Doctor that will accept them.  This will affect the aging population the most.

The only way that the government can force Physicians to see these patients is through licensing.  They will have to put some system into place where they have to see “X” amount of patient in order for their license to be renewed.  We can guess how this government intervention will be handled by Doctors: a lot will retire and some will just quit.  This just reduces the amount of good Doctors available to see.  Medical schools can not keep up with the demand and less and less students are choosing General or Family Practice because there is no money in it.  Some specialties make double the income with less hours worked.

I think the important thing to consider here is that every union in this country has fought for pay raises for the past 7 years.  Some are fighting for 5% raises this year in the worst recession we have seen in a long time.  Some complain that they have to pay into their health care because the employer can no longer absorb the entire increase.

So on one hand we have no increases for seven years plus a 21% cut now and unions which have kept up with inflation over the past 7 years on average of 2% a year.  So physicians are now down at least 21% and union workers are up 14%.

The family practice Physician will have to work more hours to make up for the short fall or lay off staff.  They can not get rid of their Medicare patients because that is illegal.  The average family Physician already works over 60 hours week and has gone through 4 years of medical school and three years of residency.  In my opinion it is a pretty lousy job…people complaining about their health to you all day long…no thanks.  You do not go in family practice for the money, that is for sure.

This backbone of the health care system will be broken.  More patients will be forced to see inferior physician assistants or super nurses.  When you are truly sick I hope that you are seeing the Doctor that day not an assistant.