A New Game Plan: Otolaryngologists and consultants devise solutions to ride out the recession

Otolaryngologists understand that even their most loyal patients, with finances ravaged by the lingering economic recession, may postpone or forego endoscopic sinus surgery, tonsillectomy or a chemical facial peel in favor of paying the mortgage.

But specialists such as Rajiv Datta, MD, a head and neck oncology surgeon and medical director of the cancer center at South Nassau Communities Hospital, are now seeing the almost unthinkable effects of financial misery on their patients. Some patients with head and neck cancers who have lost their jobs and their health insurance are skipping life-saving treatments because of financial fears triggered by the recession.

“I currently have a patient with thyroid cancer who needs endoscopy, surgery and nuclear medicine. He lost his job and is so nervous about paying his mortgage that he cancelled his surgery and won’t even talk to our social worker, who is willing to explore ways to help him financially,” Dr. Datta said. Even when Dr. Datta explained that the hospital’s charity care, emergency Medicaid and the county might cover some costs, with a radiology clinic offering pro bono services, the patient still balked.

Dr. Datta and his patients are not alone in feeling the recession’s sting. The health care industry, the largest sector in the U.S. once thought recession proof, is hurting. In 2009, overall health spending grew by only 4.4 percent, the smallest percentage increase since the Centers for Medicare and Medicaid Services started tracking spending in 1960. The recession has claimed over five million jobs, increased the rate of personal bankruptcies by 10 percent and seen COBRA coverage expire for over one million unemployed workers.

To have honest, middle class people who always paid their bills cancelling appointments and cancer surgery breaks my heart.
—Rajiv Datta, MD

The 2009 Medical Group Management Association’s survey (www.amga.org) showed physicians losing ground financially to the recession. Gross revenues per physician were down 7.8 percent, from $690,032 in 2007 to $637,677 in 2008. The number of patients seen dropped 11.3 percent, while outpatient procedure volume declined 9.9 percent. Compounding the problem was a 13 percent increase in patient bad debt.

Marc Lion, CPA, CFP, a managing partner at Lion & Company CPAs, LLP, a national organization of accountants specializing in health care, explains that while the health sector is recession resistant, it’s not recession proof. “I saw elective procedures and all volume dropping one or two years ago, and as much as a 40 percent falloff in ENT practices that do a lot of plastic surgery,” he said. “While pediatric and Medicare practices had less drastic revenue and volume declines, cutbacks in insurance reimbursement can cripple ENT practices.”