Question about Health Care Reform

[Dr Gerrard]

So the basic thing is that it forces people who can afford insurance to buy it and it expands medicaid to those currently not covered but also can't afford insurance.

So the question.

Doctors are complaining because medicaid doesn't reimburse nearly as much as the private sector and now they will have many more medicaid patients to treat.

but isn't having these patients on medicaid, reimbursing a little bit better than they not being on anything and the doctors not getting paid at all, which would happen if they were poor and uninsured?

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[NickNaylor]

Unless they present to the ER or a hospital (NOT a private practice), physicians aren't required to provide them with care per EMTALA. ER docs are usually salary-based, so they don't care whether or not the patients that come through have insurance, since the cost is placed on the hospital.

Your point doesn't apply in this case, since physicians in private practice aren't legally responsible (morally/ethically is another issue) for providing care regardless of ability to pay.

 

[Dr Gerrard]

so what is the problem with more people being placed on medicaid? who does lower reimbursements actually affect then?

 

[NickNaylor]

Well, it does affect private practice physicians because most private insurances billing rates are based on Medicaid payment schedules. A private insurer, for example, might pay at 500% of the Medicaid rate. In effect, then, all doctors who work under a fee-for-service type of model (versus a salaried model) are affected by Medicare/Medicaid rates to some degree. Salaried physicians are impacted as well since the hospital's bottom line is ultimately reduced, which may mean pay decreases, but they are much more insulated than the docs that practice under fee-for-service.

Note, though, that physicians aren't obligated to accept Medicare/Medicaid patients, though this likely going to a change. A proposed law in MA I think it was was going to require physicians to accept all forms of insurance (including Medicare/Medicaid) or no insurance at all as a condition of licensure. In effect, you would either have the option of going cash-based or going insurance-based and being forced to accept the patients that cause you to lose money (i.e., Medicare/Medicaid patients). You would be forced to accept these rules because if you didn't, you wouldn't be able to get your license or renew your license. I'm guessing that violating the rules would also lead to suspension or revocation of your license. I don't know what ended up happening to the bill though.

 

[Dr Gerrard]

Well, it does affect private practice physicians because most private insurances billing rates are based on Medicaid payment schedules. A private insurer, for example, might pay at 500% of the Medicaid rate. In effect, then, all doctors who work under a fee-for-service type of model (versus a salaried model) are affected by Medicare/Medicaid rates to some degree.

Note, though, that physicians aren't obligated to accept Medicare/Medicaid patients, though this likely going to a change. A proposed law in MA I think it was was going to require physicians to accept all forms of insurance (including Medicare/Medicaid) or no insurance at all as a condition of licensure. In effect, you would either have the option of going cash-based or going insurance-based and being forced to accept the patients that cause you to lose money (i.e., Medicare/Medicaid patients). You would be forced to accept these rules because if you didn't, you wouldn't be able to get your license or renew your license. I'm guessing that violating the rules would also lead to suspension or revocation of your license. I don't know what ended up happening to the bill though.

ah all right. so it does affect private practice to some extent, but the biggest problem, the thing most people are worried about is the fact that they may be forced to accept the patients?

 

[NickNaylor]

ah all right. so it does affect private practice to some extent, but the biggest problem, the thing most people are worried about is the fact that they may be forced to accept the patients?

Well that's the long-term concern, because it's pretty hard to ever see a day where the government would willingly increase its costs by increasing its payment rates to physicians. I don't think that's a concern most people take into mind when determining their position on healthcare reform, though.

I'm sure some other people will chime in, so they'll probably present some other aspects to keep in mind.

 

[Web MD]

By expanding medicaid, there's going to be a large number of people now able to seek medical care now that they have "free" insurance - more people are going to want to use the system now that they're covered. While this is good for patients since they would theoretically receive care before their conditions deteriorate to the point of being wheeled into an ER, it would mean longer wait times, less time with the doc per visit, etc. You hear enough about the primary care shortage now, imagine adding hundreds of thousands to millions of additional patients into the mix. Plus, there's no way that medicaid rates get increased to match medicare, it'll be the exact opposite. Medicare cuts will level it off to medicaid rates and docs will refuse to see this huge influx of patients. At that point the government either recognizes that even though it provided them with health insurance it failed to provide them with health care or it becomes federally mandated to accept medicaid/medicare patients into your payor mix and people run away from the medical field

 

[justaregularmed]

Lets pick on a random state, Michigan. They reimburse 25 dollars for an office vists.

I has a big long rant about this but essentially if you see a patient every 20 minutes every single weekday of the year you can make 13,000 dollars a month.

Oh wait taxes.

So if you started your own practice your total tax burden would be AT LEAST 30%*. So knock that down to 7,800.

Oh yeah education loans, and the loan I took out to start my practice ~300,000 dollars. Take off another 2,500-3,500 a month.

4,300-5,300 is left.

I'll be generous and say your malpractice costs 20,000 dollars a year (which is really ~25,000 on average), and I'll round down 1,600 a month.

That leaves you with 2700-3700 a month or, 35k ish-48k ish a year to live on.

Yay! Healthcare reform!

 

[morning]

1. Physicians don't tend to go out of business for LACK OF patients, so a larger patient base isn't going to do anything for their bottom line. It will increase wait times.

2. It's very obvious when a pre-med's never done their taxes, ever...they don't understand that a 40% tax is not 40% of your income, it's 40% above a certain level. If you earned 13,000 a month - 156,000 a year - you'd lose 39% of 56,000, plus an extra dollop of cash that will still leave you with more than $7,000 a month. In 2009, this was $22,250, making the total tax amount $44090. This is before any deductions and tax breaks, which a good accountant will help you find. This really, really needs to be taught in schools.

 

[Parts Unknown]

Well, it does affect private practice physicians because most private insurances billing rates are based on Medicaid payment schedules.

In my experience they are more frequently pegged to Medicare schedules, not Medicaid. If you have data to the contrary I would like to see it.

One the one hand reform has exposed the impending financial Armageddon due to spiraling health care costs, but one has to remember that by virtually all credible analysis said reform has staved off the cataclysm, not ushered it in.

In the simplest of terms we have three classes of patients: the uninsured that won't pay, the uninsured that will pay, and the insured (there are actually more layers, but we won't get into them). Providers lose money on the first group and generally make money on the second two. Given the trajectory of insurance premiums and personal income in this country, there has been tremendous downward pressure on the number of insured and out-of-pocket payers, and concomitant upward pressure on the number of can't-pay patients. Every dollar increase in premiums ratchets this pressure even more.

Reform will theoretically alleviate some of it. Cost control measures are being attempted, and increasing coverage rates will presumably drop the amount of uncompensated care, which is significant. It will cost billions, and we will be some of the beneficiaries.

Critics argue that new utilization will outstrip revenue, and they may be right, but I personally see this as a transient effect of increased access to forgone care which is necessary, rather than a bunch of poor people deciding to spend the afternoon in the doctor's office. Britain saw a surge of patients in the 10 years after the start of the NHS, but it eventually waned. What you don't hear is that doctors in Britain and Canada did a lot better after socialized insurance than before it.

For a less rambling analysis of life without reform, refer to this report: http://www.urban.org/publications/412045.html

 

[justaregularmed]

1. Physicians don't tend to go out of business for LACK OF patients, so a larger patient base isn't going to do anything for their bottom line. It will increase wait times.

2. It's very obvious when a pre-med's never done their taxes, ever...they don't understand that a 40% tax is not 40% of your income, it's 40% above a certain level. If you earned 13,000 a month - 156,000 a year - you'd lose 39% of 56,000, plus an extra dollop of cash that will still leave you with more than $7,000 a month. In 2009, this was $22,250, making the total tax amount $44090. This is before any deductions and tax breaks, which a good accountant will help you find. This really, really needs to be taught in schools.

Its very obvious you don't know about all the payroll, Medicare, social security taxes that are all on your total income, you've obviously never been self employed. Then your income taxes (state and local), but since you know everything its ok. I was trying to be succinct and I think its a fair estimate, troll elsewhere.

 

[NickNaylor]

In my experience they are more frequently pegged to Medicare schedules, not Medicaid. If you have data to the contrary I would like to see it.

One the one hand reform has exposed the impending financial Armageddon due to spiraling health care costs, but one has to remember that by virtually all credible analysis said reform has staved off the cataclysm, not ushered it in.

In the simplest of terms we have three classes of patients: the uninsured that won't pay, the uninsured that will pay, and the insured (there are actually more layers, but we won't get into them). Providers lose money on the first group and generally make money on the second two. Given the trajectory of insurance premiums and personal income in this country, there has been tremendous downward pressure on the number of insured and out-of-pocket payers, and concomitant upward pressure on the number of can't-pay patients. Every dollar increase in premiums ratchets this pressure even more.

Reform will theoretically alleviate some of it. Cost control measures are being attempted, and increasing coverage rates will presumably drop the amount of uncompensated care, which is significant. It will cost billions, and we will be some of the beneficiaries.

Critics argue that new utilization will outstrip revenue, and they may be right, but I personally see this as a transient effect of increased access to forgone care which is necessary, rather than a bunch of poor people deciding to spend the afternoon in the doctor's office. Britain saw a surge of patients in the 10 years after the start of the NHS, but it eventually waned. What you don't hear is that doctors in Britain and Canada did a lot better after socialized insurance than before it.

For a less rambling analysis of life without reform, refer to this report: http://www.urban.org/publications/412045.html

I'm sure you're right, but the same point (i.e., government pay schedules strongly impact private insurance pay schedules) remains.

 

[Parts Unknown]

Its very obvious you don't know about all the payroll, Medicare, social security taxes that are all on your total income, you've obviously never been self employed. Then your income taxes (state and local), but since you know everything its ok. I was trying to be succinct and I think its a fair estimate

A fair estimate of what? Running a practice on base office visit reimbursement for Michigan Medicaid patients (i.e. something nobody does)? If anything is obvious it is that you have nothing useful to contribute to the discussion.

 

[morning]

Its very obvious you don't know about all the payroll, Medicare, social security taxes that are all on your total income, you've obviously never been self employed. Then your income taxes (state and local), but since you know everything its ok. I was trying to be succinct and I think its a fair estimate, troll elsewhere.

What do social security taxes have to do with whether you'll be paying 39% of 156,000 vs. 56,000? That's a pretty big range there. I'd certainly rather deal with the latter. Of course, soc. security tax only goes up to the first $107,000, too...and then you pay 2.9% on the rest....and you deduct half of what you pay in self-employment tax from your total income when you pay federal taxes...

I'm sure you're smart enough to see it WASN'T a fair estimate. You're taking the whole income amount and actually believing that ALL of it is taxed, which is a common mistake, but it's still a mistake.

 

[justaregularmed]

What do social security taxes have to do with whether you'll be paying 39% of 156,000 vs. 56,000? That's a pretty big range there. I'd certainly rather deal with the latter. Of course, soc. security tax only goes up to the first $107,000, too...and then you pay 2.9% on the rest....and you deduct half of what you pay in self-employment tax from your total income when you pay federal taxes...

I'm sure you're smart enough to see it WASN'T a fair estimate. You're taking the whole income amount and actually believing that ALL of it is taxed, which is a common mistake, but it's still a mistake.

I overestimated FICA. Correcting for the impact of FICA brings it down closer to 30% total tax burden. (Federal Income, State Income, FICA). Now when the busniess is starting deductions are a real savings, whatever the maximum would be feel free to shout it out I can correct.

And of course I used Medicaid to the angry attending. You expect reimbursement to go up? Right at this second Medicare pays between what 35-130 a visit? So lets pretend the 20% pay cut never happens and we have a good even mixture of patients, lets raise the number to 85 bucks. What's not accounted is procedures, you could be helpful and put some input in on that (adult im clinic, peds etc).

While all the bickering about numbers is fun I was just trying to be illustrative.

We could just use current group physician salary numbers which peg PEDS/IM/FM at 200k (for a new doctor). Taking out taxes, extending the loans to 25 years, leaves my calculations with around 100k take home. Reimbursements are certainly not going to go up, and taxes are not going to go down, and take out any business expenses and you can see where this is going.

And just for shiggles the maximum federal tax liability on 200k earned income is 114k a la the irs.

 

[Rawls87]

Healthcare reform did nothing to reduce medical costs or improve our significantly affect the quality of medicine. They should have named it Health Insurance reform.