Fragile Medical System Ready to Break

on 06 2, 2010

I wanted to inform everyone of the fragile medical system that we are facing and the potential catastrophic consequences that will arise if Congress does not act quickly.  For the third time Congress is trying to postpone a 21% cut in Medicare spending  to Physicians.  This cut could potentially kill medicine as we know it.  Health care costs are out of control and are already 19% of the US budget, but this potential cut is not the answer.

Family practice or general practice Doctors will be heavily affected.  Most offices operate with very high expenses.  Employment, paperwork, office expenses, health insurance and malpractice insurance keep their total expenses up near 70 % of revenues.  I know most people are saying that they are the reason that health care costs are going up.  Unfortunately, Doctors have not had a pay raise for many years thanks to cuts from the Insurance Companies and cuts from Medicare and Medicaid.  Insurance companies take their cues from Medicare as to what they can cut.  Family practice Doctors are getting squeezed from both sides. Their reimbursements have been cut and their expenses have gone up.  They are an employer just like every other small business and the health care costs that have increased  across the country affect them as well.

Insurance companies force Doctors to do more paperwork and more red tape to get the same procedure covered for their patient.  More support staff are needed to fill out the paperwork and more insurance staff  to read the paperwork means more people to pay through the process.  This is a system that can not handle a serious cut in reimbursement.  As more baby boomers are retiring and middle class comes to rely on Medicare it will put further strain on the Medicare system.  Doctors who are already overwhelmed from years of cuts and higher expenses will do exactly what they have done with the low reimbursements of Medicaid.  They will simply stop accepting new patients who use Medicare as their main payment source.

More people trying to use Medicare and less Doctors accepting medicare is going to create an explosive situation.  The end result will most likely be the government trying to force Doctors to accept a percentage of their patient s as Medicare patients or revoke their licenses.  We know how this will go over.  There are already less family practice Doctors because there is more money in specialized medicine.  No one wants to deal with the hassles of everyday general care.

If the government forces Doctors to see patients then we will see a mass exodus of Doctors.  Many will retire and some will just outright quit.  The medical school system can not keep up with the demand.  Once high standards to get into medical schools will have to be lowered to accommodate the increase in demand for family practice.  In the meantime, care will be decreased and put into the hands of inferior health professionals that do not have any where near the same schooling or hands on experience as a Doctor.  I do not want a Nurse Practitioner or a Physician Assistant with less than half the education  or very little to  no residency hands on experience compared with a Medical Doctor.  Even though I think residency is a brutal experience for a Doctor to go through, it truly tests the knowledge and skill of that Doctor to make sure they have the skills and education needed to be a Doctor.  I know several people that were forced out of residency and potential future patients were safer for it.

Insurance companies and Medicare want medicine to be like the auto repair shop: order a few parts,  maybe change fluids, bill an hourly rate and send them on their way.  Unfortunately, the human body is one of the most complex systems in the world and we still do not understand how things work.  Why does one person get cancer and another person who smokes two packs a day does not?  Technology is improving care.  The ability to take complex images is changing how Doctors can see and treat patients in a timely manner but this technology comes at a cost.

The best example I can give you of the breakdown in the system is a personal one.    I recently had to have several tests done in the hospital and needed a specific treatment for my illness.  After my Doctor consulted several other Specialists on the best treatment, I was told I needed and IV antibiotic for 3 weeks.  That meant hospital or home care.  I choose home care.  The process of getting approval for the home care took several days.  This meant that I needed further blood work to confirm things for insurance.  It also meant that a nurse had to fill out extensive paperwork and push the insurance company to cover home care.  My Doctor informed me it would have been much quicker if I was put in the hospital immediately because it would have meant that the insurance company had something to gain by me not being in the hospital.  If I was in the hospital they would have that expense.  On the other hand if I was out of the hospital, just the home care expense…a much lesser expense than a hospital stay.  It took the nurse several days to get approval for the same antibiotic that was recommended by several Doctors.

The system is broken when it comes down to the insurance company not wanting to pay.  Even worse, Doctors know they may have to admit you to the hospital to actually get the proper care needed in a timely manner because it means it would cost the insurance company more money and they will respond quicker to save money.  This is truly a sad state of affairs.

As other countries with socialized Medicine (Canada and UK), are trying to curtail their budgets, the US has expanded its budget with this recent health care legislation.  An attempt to pay for some of the legislation with these Medicare cuts is a very poor decision.  There is a reason that the US is the highest standard for medicine in the world.  There is a reason that ranking medical officials come to the US for their procedures rather then stay in their home countries.  I would rather have access to the best Doctors in the world then live in a country where I am forced to see a Doctor I don’t like or told what procedure/medicine they will pay for compared to what is needed or recommended by the Doctor.

Our standard of patient care and rights are soon to be subject to the government telling your Doctor who they must see.  If this happens our system will become more like Canada and UK.  The more people we put into a system that is not properly paying for current people in the system the more pressure they will put on the backbone of the system.  The backbone is the family Physician.

The best way to hit the point home is through a simple example. Let’s say one Doctor brings in $500,000 in revenue.  She has 70% in expenses or $350,000.  So she takes home $150,000.  If her practice is 25% Medicare patients, then this translates to $125k of the $500k total.  If Medicare cuts 21% of that $125k, that is $26,250 less that the Doctor would collect for seeing the same patients.  She still has the same expenses of $350k, so the Doctors automatically takes a hit of the $26,250.  Well most Doctors are not going to be able to take that kind of a cut, so they will do a couple of things: lay off staff, stop seeing new Medicare patients, limit the amount of time in a day that they see Medicare patients (only a few spots a day) and will probably add on more patients in a given day to make up for shortfall.  These cuts will mean layoffs for support staff, longer wait times for the patients and less access to Doctors for Medicare patients.

Doctors are already facing pressure because of the failure of Congress to stop these cuts, so Medicare is simply holding the Doctors reimbursements.  This means cash flow crunch for Doctors across the country.

Another crunch that Doctors are now facing from Medicare is potential fines going back to 2008.  I found this hard to believe, but the cash strapped Medicare is conducting reviews back to 2008 of improper handling of patients and potentially fining Doctors for that care.  I find this concept hard to grasp, but when you are broke I guess you have to raise money somehow.  How many Doctors are going to want to participate in a system that will fine or withhold their reimbursements without notice or regard for their practice.

The family physician is the  backbone of our system and by Congress not acting to stop the Medicare cut it  is going to crush these Doctors.  There is no quick fix to health care, but major cuts like this just adds more pressure to an already fragile system.

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  1. […] 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 […]

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