Why don't physicians have any control over their reimbursements?

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rekrul

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Reading the attending forums, there is one theme that always pervades discussions of the future: "things are going so and so right now, but it all depends of what happens to reimbursements going forward."

It appears that physicians view themselves as passive figures, always at the mercy of faceless government committees or rapacious insurers that can at any time cut their recompense by X% on an arbitrary whim. Why is this? Plumbers will laugh in your face if you tell them you've decided to pay them 20% less "because my plumbing expenses are growing at an unsustainable rate." It up to the plumbers to decide how much they charge for their services, and its up to you to decide whether you are gonna pony up or do without said services.

If there is any profession (because that's what medicine is, a profession) that is uniquely suited to hold pricing power, it would seem to be medicine, since the demand curve for medical services is inelastic. Yet doctors are precisely the people that appear to have zero influence on the prices of the services they provide. Why is this? If the government says "we're going to cut reimbursements for X procedure by Y%, suck it!" why is that the final word? Surely doctors can say "no way Jose, ain't happening. Go tell the AARP that they can no longer use medicare for procedure X and start applying for barista jobs so you have something to do after the next election."

I'm not advocating for greed in medicine. I am simply hard pressed to understand why doctors would allow themselves to lose all control over what they receive for the services they provide. I know that doctors are barred from unionizing, but dang, I'd imagine that with so many smart people among the ranks, they'd have figured out SOME way preserve influence when it comes to reimbursements, ie their livelihoods.

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Dentists do :)

As for medicine, I can't think of any foreign country where doctors have much control over their reimbursement, it's universally controlled by the governments.
 
Dentists do :)

As for medicine, I can't think of any foreign country where doctors have much control over their reimbursement, it's universally controlled by the governments.

I don't think dentist control the reimbursement rate. In fact, medical pay dentists only about 50$ a filling (compare to 120$ otherwise/insurance price). So it is universal for all medical field. It is more like you can either take medical (government)/insurance HMO/PPO for lower price/reimbursement. Or if you want to charge full price , then no one can stop you; but you then will have very low number of patients (nearly everyone has some sort of insurance nowadays). The only way to charge full price and still have lot of patients is to practice in rural area when you are the only provider; then you can be God and charge whatever price you want, and do not have to worry about the imbursement rate. I know how harsh it sounds
 
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I know that doctors are barred from unionizing, but dang, I'd imagine that with so many smart people among the ranks, they'd have figured out SOME way preserve influence when it comes to reimbursements, ie their livelihoods.

They are not barred from unionizing exactly. It is only those that hold manager level positions. During the 90s, the majority of physicians were self employed and thus could not unionize, since they had staff under them. However, now that more and more physicians are employees of hospitals they can unionize. The only exception is that some physicians are managing people underneath them, like chief of medicine/head physician or a similar position.

The second reason is that the job hours are very demanding and thus they don't have the time to play an active role in policy and politics. Just count the number of physicians vs. lawyers in congress. There is like 1 physician for every 10 lawyers.

Back in the day (like 1950s) the AMA was probably the most powerful interest group in the United States. This you could also call one of the golden eras of medicine. However, now there are a lot of groups just a powerful as the AMA. I think part of the downfall of the AMA from its former glory was because of the various types of physicians in the group. The primary care doctors wanted different things in policies vs. specialists, thus caused fragmentation within the ranks.

So there are various reasons why doctors are not that powerful as a group and thus are at the mercy of all these politicians, mid-level providers, and hospital administration.
 
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I know it is kind of taboo/forbidden to talk about money/income regarding healthcare. But basically at some extend, supply/demand principle still apply. I know all physicians still refer cash/good insurance patients. But most of them still have to take medical, HMO when the majority of patients have those type of coverage. So more precisely, it is not that physician/healthcare professionals don't like 100% reimbursement rate (who wouldn't). But if you deny all medical/low reimbursement rate , then the next guy will gladly take all your business , and you will be left with very low number of patients. With no income to pay for your business , your office will fail and have to close.
 
Insurance companies/Medicaid decide how much they want to pay. You as doctor can either accept those rates or find another patient base. Most have decided that even with reimbursement cuts the benefit of a volume business and a solvent payer offsets the cost. You don't work for these insurers, so unionizing does you no good -- the hospital you work for is on your side and would love for your work to be reimbursed at a higher rate, so striking only hurts your allies. So really your only resource is through lobbying. We need to make the government officials understand that the guy who does four years of medical education and then five years of residency brings more to the table than a $15 per office visit that they want to cut to $13. Or that not every case is the same and that it's absurd that someone should actually lose money on the harder/longer cases instead of getting paid more to tackle them.

Bottom line is medicine has done a really good job of hiding what it takes to be a doctor from the public and government. As we are seeing now in Missouri, government officials don't get that med school is only part of the journey and probably the least important part in making a doctor. It's time to come out if the shadows and let people know that many of us spend over a decade of professional school and residency before we practice. That they really aren't getting the same level of expertise when they see an NP, despite both people wearing white coats and seeing a similar demographic of patients. Until the public and government appreciate this, cuts will keep coming because people aren't understanding the quality and expertise value they are getting for their money. They have an easier time forking $50 per hour to the plumber or car mechanic because what they see is what they get, while you can never really see a level of expertise unless it's promoted.
 
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If there is any profession (because that's what medicine is, a profession) that is uniquely suited to hold pricing power, it would seem to be medicine, since the demand curve for medical services is inelastic..

The demand for medical services may be inelastic, but the demand for medical services delivered by a physician in private practice (or even by any physician) isn't. Walmart clinics run by nurse practitioners are the wave of the future.
Of course, physician services won't be eliminated- surgeons are still needed and someone needs to supervise the NP's, and many people do have a slight preference to having a doc deliver their care (if it doesn't cost too much more than an NP).
 
Physicians theoretically can control their reimbursements by just not taking certain insurances anymore. Like if medicare cuts reimbursements, doctors can just stop taking patients with medicare (and many physicians already have done this). Another way is for primary care providers to become 'concierge' practices, taking a pricey membership fee in addition to insurance reimbursements. Many physicians don't want to do either of these things because it excludes the patients who are most in need, but it might be a last resort for them if their practices are tanking.

I don't actually think Walmart clinics run by NPs are the wave of the future. I'm working in a practice right now with NPs and pysicians. The NPs are experienced, but they can't handle anything that deviates too far from the typical (for primary care: UTIs, colds, vaccinations, physicals, etc). There needs to be a physician around for the more complicated cases (which do come up on an almost daily basis where I work).

Plus, some people demand unrealistically good service from their health care providers. They don't understand how much work the doctor does outside of their appointment room or how many patients the physician has to see to cover his/her overhead. Some patients even call during the day and demand to speak with their physician, like he's sitting by the phone waiting to take their call. Something makes me think that these people who demand time and attention from their health care providers wouldn't be happy going to places like Walmart.

Edit: Where I live, the practice I work for could easily afford to cut out the worst insurance companies, and we'd still be overbooked. I don't know if that deviates, depending on the area.
 
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There are doctor's unions! They're called the AMA and the AOA. "Association" sounds more polite than "union".

They are not barred from unionizing exactly. It is only those that hold manager level positions. During the 90s, the majority of physicians were self employed and thus could not unionize, since they had staff under them. However, now that more and more physicians are employees of hospitals they can unionize. The only exception is that some physicians are managing people underneath them, like chief of medicine/head physician or a similar position.

The second reason is that the job hours are very demanding and thus they don't have the time to play an active role in policy and politics. Just count the number of physicians vs. lawyers in congress. There is like 1 physician for every 10 lawyers.

Back in the day (like 1950s) the AMA was probably the most powerful interest group in the United States. This you could also call one of the golden eras of medicine. However, now there are a lot of groups just a powerful as the AMA. I think part of the downfall of the AMA from its former glory was because of the various types of physicians in the group. The primary care doctors wanted different things in policies vs. specialists, thus caused fragmentation within the ranks.

So there are various reasons why doctors are not that powerful as a group and thus are at the mercy of all these politicians, mid-level providers, and hospital administration.
 
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There are doctor's unions! They're called the AMA and the AOA. "Association" sounds more polite than "union".

They can work like unions at times, but they are really interest groups.
 
Physicians theoretically can control their reimbursements by just not taking certain insurances anymore. Like if medicare cuts reimbursements, doctors can just stop taking patients with medicare (and many physicians already have done this). Another way is for primary care providers to become 'concierge' practices, taking a pricey membership fee in addition to insurance reimbursements. Many physicians don't want to do either of these things because it excludes the patients who are most in need, but it might be a last resort for them if their practices are tanking.

I don't actually think Walmart clinics run by NPs are the wave of the future. I'm working in a practice right now with NPs and pysicians. The NPs are experienced, but they can't handle anything that deviates too far from the typical (for primary care: UTIs, colds, vaccinations, physicals, etc). There needs to be a physician around for the more complicated cases (which do come up on an almost daily basis where I work).

Plus, some people demand unrealistically good service from their health care providers. They don't understand how much work the doctor does outside of their appointment room or how many patients the physician has to see to cover his/her overhead. Some patients even call during the day and demand to speak with their physician, like he's sitting by the phone waiting to take their call. Something makes me think that these people who demand time and attention from their health care providers wouldn't be happy going to places like Walmart.

Edit: Where I live, the practice I work for could easily afford to cut out the worst insurance companies, and we'd still be overbooked. I don't know if that deviates, depending on the area.

Until medical licensure is tied to accepting Medicare and Medicaid...
 
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Yea **** the next generation but please not this one. Not until the end of my lifetime.
 
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If there is any profession (because that's what medicine is, a profession) that is uniquely suited to hold pricing power, it would seem to be medicine, since the demand curve for medical services is inelastic. Yet doctors are precisely the people that appear to have zero influence on the prices of the services they provide.

I would not agree that demand for medical services is inelastic. Un- and under-insured people routinely put off preventative and elective medical care, or stagger high- and low-use years to navigate high deductibles.

I'd also disagree to some extent that doctors are unable to set prices for the services they provide. Dentists who decline to accept dental insurance (many/most?) have complete autonomy in pricing. Physicians who don't accept medical insurance have similar pricing flexibility. I have seen several "I don't accept insurance, but you're welcome to file a claim yourself" physicians in the past and been very satisfied with both the quality of care and value received. (Those physicians also had much smaller administrative support staffs -- no rooms full of billing clerks!) Patients pay in full on the way out the door -- no forms, no surprises, no problems. Of course, that business model does limit your client base to those who don't need to rely on health insurance to cover every visit - so not for surgeons and oncologists...
 
I would not agree that demand for medical services is inelastic. Un- and under-insured people routinely put off preventative and elective medical care, or stagger high- and low-use years to navigate high deductibles.

I'd also disagree to some extent that doctors are unable to set prices for the services they provide. Dentists who decline to accept dental insurance (many/most?) have complete autonomy in pricing. Physicians who don't accept medical insurance have similar pricing flexibility. I have seen several "I don't accept insurance, but you're welcome to file a claim yourself" physicians in the past and been very satisfied with both the quality of care and value received. (Those physicians also had much smaller administrative support staffs -- no rooms full of billing clerks!) Patients pay in full on the way out the door -- no forms, no surprises, no problems. Of course, that business model does limit your client base to those who don't need to rely on health insurance to cover every visit - so not for surgeons and oncologists...

Those concierge practices only exist because almost nobody does them. If more than 1-2 open in a region, they quickly drive each other out of business. Ive worked with a few in a legal (think belly up) context and its just a bad business model -- proably the least recession proof business you could ever think up. The number of people who are willing to pay cash out of pocket in lieu of using their health insurance is a very tiny group. So no, there's no real choice but to accept insurance. Lobbying is the only real approach to address these issues.
 
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Those concierge practices only exist because almost nobody does them. If more than 1-2 open in a region, they quickly drive each other out of business. Ive worked with a few in a legal (think belly up) context and its just a bad business model -- probably the least recession proof business you could ever think up. The number of people who are willing to pay cash out of pocket in lieu of using their health insurance is a very tiny group. So no, there's no real choice but to accept insurance. Lobbying is the only real approach to address these issues.

Sadly, the one I used most and was so happy with went to an insurance-based practice... My insurance (pre ACA) at the time was so bad I couldn't afford him anymore. Ironically, he was much more affordable when he had a "concierge" practice. Sad commentary -
 
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The problem is that doctors are so heterogenous and have vastly different agendas vs other lobbies that boil down to more money and more power.

You guys should see the garbage that gets brought up at AMA-MSS and AMA.

I actually addressed that in my previous comments. They were a once powerful group, but now not so much.
 
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Yea because you have more of those doctors that are the next mother Teresas and you still have those that don't want old policies regarding reimbursements to change. The media loOOooooOOOves to focus on the former group and take advantage of the group overall. It's the former group of doctors that enable these reimbursement cuts to happen really.
 
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The problem is that doctors are so heterogenous and have vastly different agendas vs other lobbies that boil down to more money and more power.

You guys should see the garbage that gets brought up at AMA-MSS and AMA.

I think it's less that doctors are heterogeneous on issues like opposing reimbursement cuts and more that these organizations have long since backed away from the big financial issues. Basically a big toothless animal who used to be formidable. If they were actually launching an effective campaign to address the issues like this we cared about, more of us would maintain membership to the AMA and they would have more money and speak for more voices. So it's a bit of a chicken and egg thing. But it might be time for a new organization with more focus on the bottom line to come onto the stage. One that cares less about a glossy magazine or social issues and more about protecting it's constituents and making the public aware of what goes into making a doctor. Because the public apparently seems to think medical school is a one year vocational school and residency doesn't exist and so there's no reason a doctor ought to be paid more per hour than the high school kid who mows your lawn.
 
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The problem is that doctors are so heterogenous and have vastly different agendas vs other lobbies that boil down to more money and more power.

You guys should see the garbage that gets brought up at AMA-MSS and AMA.
Like what?
 
It doesn't help that their own interest group, AMA, often works to lower doctor compensation. Maybe because it gets twice as much money indirectly from the government as it does from doctor's dues.
Someone posted this idea on SDN a while ago. I read the book, interesting.
http://www.forbes.com/sites/theapot...2-million-reasons-to-help-shrink-doctors-pay/

Everyone here seems to take my comment out of context. One person stated that physicians don't lobby. The AMA and AOA are interest groups and the point of them is to lobby. You don't create an interest group that is not going to lobby, otherwise it is not really an interest group. My comment was to state that they were created for that purpose, but with time, interest groups like the AMA don't focus on that purpose. People forget that interest groups weren't always what we see here today.

I suggest you look into the history of the AMA. A lot of text books will tell you at one point the AMA was one of the most powerful interest groups.

Example: States in one paragraph that most money spent of lobbying was done by the AMA
American Government and Politics Today

Does that mean what you are saying is not true? No. In fact, the group's goals and ambitions do not represent what physicians overall want. They probably have their own agenda they want to satisfy. I can't give examples of their current activities, it has been awhile since I have looked into them. The main point is that interest groups are made to represent an interest in the policy making and political realm. With the AMA, they are meant to look out for physicians overall and did so in the past, but now do a bad job of it.
 
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I think it's less that doctors are heterogeneous on issues like opposing reimbursement cuts and more that these organizations have long since backed away from the big financial issues. Basically a big toothless animal who used to be formidable. If they were actually launching an effective campaign to address the issues like this we cared about, more of us would maintain membership to the AMA and they would have more money and speak for more voices. So it's a bit of a chicken and egg thing. But it might be time for a new organization with more focus on the bottom line to come onto the stage. One that cares less about a glossy magazine or social issues and more about protecting it's constituents and making the public aware of what goes into making a doctor. Because the public apparently seems to think medical school is a one year vocational school and residency doesn't exist and so there's no reason a doctor ought to be paid more per hour than the high school kid who mows your lawn.

Completely agree WRT highlighting the differences in training between physicians and other providers. I think if most people understood the VAST differences in training they might have more of a preference for who they see. Not everyone, but at least some I would guess. Part of the problem though is that the impact of limited clinical training isn't obvious except to those who have had that training. It's a difficult point to express to laypeople without coming across as elitist.
 
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Completely agree WRT highlighting the differences in training between physicians and other providers. I think if most people understood the VAST differences in training they might have more of a preference for who they see. Not everyone, but at least some I would guess. Part of the problem though is that the impact of limited clinical training isn't obvious except to those who have had that training. It's a difficult point to express to laypeople without coming across as elitist.
Or protectionist. It's when an NP/PA f-s up and then physicians have to fix their f ups which is when people realize how valuable a physician is.
 
Until medical licensure is tied to accepting Medicare and Medicaid...

That would be past the limit for me.

I don't think people realize that we should want to attract the brightest. I'm from a very liberal state (in fact, I consider myself to be fairly liberal), but the healthcare "reform" our state is going through is absurd. It penalizes physicians so much that a huge chunk of our state has NO SURGEONS. They all moved to a neighboring state where the policies allow them to take in larger reimbursements. Because of our attack on the healthcare system, we have a serious brain drain. In that part of the state you need to drive at least 3 hours in order to have any significant surgery. I don't consider myself to be greedy, but if you want to attract the brightest people to medicine, you need to keep reimbursements high.
 
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That would be past the limit for me.

I don't think people realize that we should want to attract the brightest. I'm from a very liberal state (in fact, I consider myself to be fairly liberal), but the healthcare "reform" our state is going through is absurd. It penalizes physicians so much that a huge chunk of our state has NO SURGEONS. They all moved to a neighboring state where the policies allow them to take in larger reimbursements. Because of our attack on the healthcare system, we have a serious brain drain. In that part of the state you need to drive at least 3 hours in order to have any significant surgery. I don't consider myself to be greedy, but if you want to attract the brightest people to medicine, you need to keep reimbursements high.

Basically the same reason that nobody wants to go into FM anymore. Can't even afford to pay back their medical school loans...
 
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I'm seeing a lot of the following types of responses:

"Doctors can set their own prices as long as they don't accept insurance, but it's not a feasible business model."

This implies that doctors operate on a "take it or leave it" basis wrt to insurance, be it medicare or private. That's exactly the part I don't understand. It should not be "take it or leave it," because insurance companies/medicare depend on physicians just as much if not more than physicians depend on insurance.

To wit, why do people pay for insurance in the first place? So that they can see a doctor if need be, obviously. Thus, the value of an insurance policy is predicated on that policy's ability to allow you to "see a doctor." The moment that owning an insurance policy no longer allows you to see a physician and/or undergo treatments administered by physicians, that policy becomes worthless and nobody will pay for it.

Since the very survival of insurance companies depends on their ability to provide physician services for their customers, it would seem logical that insurers and physicians should interact in a mutually dependent manner, rather than insurers being able to say "I'm cutting your reimbursement for hip replacements by 20%, deal with it." Now obviously there are only a handful of insurers whereas there are on the order of tens of thousands of practices/hospitals so insurers enjoy much more leverage, but that is exactly where I think physicians have failed to stick up for their own interests.

We all know the direction healthcare economics is headed under current trends: ever higher insurance premiums, ever lower reimbursements, and thus ever higher insurance company profits. None of the "cost savings" derived from reimbursement cuts stay in patients' pockets, that's for sure. This is a very troubling phenomenon because it mirrors what has happened to other areas of the economy in the past, namely the transfer of wealth from the people providing a good or service to the managerial and financial elites.

Maybe I'm being conspiratorial and paranoid, but I see things like mandated EMR, reimbursements being cut while hospital fees are raised, and countless others as a concerted effort to make the independent practice of medicine impossible and in so doing, force physicians to become cogs in corporate machines, the fruits of their labor divvied up by insurers, hospital administrators, and investors behind the huge healthcare systems now forming. These people see that healthcare is nearly 20% of GDP and can't stand the notion that some of that money is being collected by the lowly people who provide the healthcare, rather than the institutional elites that so justly deserve it by divine ordinance.

I'm no marxist, but it's basically the whole notion of "labor vs capital." Physicians were never really part of "labor" since they existed as independent professionals who generated their own revenue and thus were able to recoup much of the value of the services they provided, unlike say auto workers, who are pure "labor" and thus earn only a tiny fraction of the value their labor creates. I believe what is happening today is that the government, acting in concert with institutional private sector elites, is trying to decouple physicians pay from the value of the services they provide, with the difference to be pocketed by said private sector elites. Needless to say, with that much money involved, patient care is just about the last thing being considered when policies are decided upon.
 
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It should not be "take it or leave it," because insurance companies/medicare depend on physicians just as much if not more than physicians depend on insurance.
Not exactly...

Insurance companies are large organizations with lots and lots of insured people. The problem is, as a physician you drop one insurance company and you lose tons of potential patient. As an insurance company, you drop one physician and it's no big deal. You may say, well insurance companies need physicians to accept their insurance. Yes, that's true, but having one physician boycott your insurance company isn't going to make a real impact. In order to actually make a difference, you would need a whole coalition of physicians to drop the insurance. The problem is that physicians don't want to drop any insurance because they are afraid that if the boycott doesn't work they will have less access to patients. If the boycott doesn't work, the physicians who didn't participate will be better off. It's not smart for physicians to drop medicare or medicaid because SO MANY PEOPLE have it. You would lose a large patient base (though this varies by specialty). Insurance companies are so big that physicians are essentially defenseless. However, we have strength in numbers and it's time to realize that. Also a lot of docs avoid bureaucracy at all costs.
 
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^^Right, I agree with that. That's a big issue, but I believe it's an issue that can and MUST be overcome. They (the insurers and government) will continue to cut reimbursements until the independent practice of medicine becomes impossible, and physicians will be forced to work as employees for huge healthcare organizations. At that point the executives of the healthcare orgs and the insurers will negotiate fair rates and balance will be restored, with the caveat that these reimbursements will be collected chiefly by said executives, with crumbs being thrown to physicians in the form of fixed salaries.
 
That would be past the limit for me.

I don't think people realize that we should want to attract the brightest. I'm from a very liberal state (in fact, I consider myself to be fairly liberal), but the healthcare "reform" our state is going through is absurd. It penalizes physicians so much that a huge chunk of our state has NO SURGEONS. They all moved to a neighboring state where the policies allow them to take in larger reimbursements. Because of our attack on the healthcare system, we have a serious brain drain. In that part of the state you need to drive at least 3 hours in order to have any significant surgery. I don't consider myself to be greedy, but if you want to attract the brightest people to medicine, you need to keep reimbursements high.

Isn't this in Mass? Maybe multiple states are going trough this.
 
I should remind you that Average IQ score is 100. Anyone with IQ score of 100 or above is capable of doing anything or can become anybody such as scientists, doctors, lawyer, engineer etc...Now as you can see there are far more people with IQ score over 100 than actually number of medical school spots/seats. Are we all tired of the same statements on all medical school website "We have far more qualified applicants than the number of seats, thus our school admission is extremely competitive." The key words are "more qualified applicant", thus the admission is so competitive because so many people apply, not because the program is so extremely hard (like astronauts or the Olympic). So there are a lot of people who are more than qualified/capable to become doctors but unable to do so because there are so limited amount of seats. I am sure 90% people visit SDN probably have IQ score at or above 100, but let face it there is only about 1/3 of us will become doctors (again due to limit number of seats.) Now the solution is to open more new medical school, so at least more qualified people can have a chance. Let the supply/demand rules as it is in any other careers/professionals. If we have a lot more doctors than now; there will be nobody whining about reimbursement rate because hey, there will be so many more doctors like you to take you clients base. Good luck trying to get 100% reimbursement rate while your patients can go to the nicer guy next door.
 
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^^I don't think you have any idea what an IQ of 100 represents, lol. I suggest you learn more on that topic, because you're operating under a very false premise that is causing your entire worldview to be wildly inaccurate.
 
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Until medical licensure is tied to accepting Medicare and Medicaid...

The states regulate physician licensure, not the federal government. And many states will reject anything that gives the federal government more say or that strengthens the federal social programs you reference.
 
I should remind you that Average IQ score is 100. Anyone with IQ score of 100 or above is capable of doing anything or can become anybody such as scientists, doctors, lawyer, engineer etc...

Based on what? How many people with an IQ below 115 (a standard deviation above on the Wechsler test instrument commonly used) do you deal with on a regular basis? Based on actual psychometric data with clients I have actually dealt with, there is a profound difference when you hit or approach the "average" range, and it isn't pretty.
 
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