The growing numbers of politicians and special interest and consumer groups pushing health insurance for all often neglect-and sometimes penalize-the people they need most for such plans to succeed: America’s physicians. Politicians usually promise budget neutrality in proposing health insurance for the uninsured, but they raise funds the old-fashioned way-by raising taxes. And politicians choose their poison carefully. When they realize that raising property or sales taxes to cover the uninsured will raise the probability of their defeat in the next election, they look for easier ways to raise revenues, and wealthy doctors are a perfect target.
Explore this issue:February 2008
Building universal coverage schemes on the backs of physicians, though, has backfired in several states, including Maine, Massachusetts, Michigan, Kentucky, New Mexico, and West Virginia. Elected officials should be learning that physicians just say no to plans that offer such negative financial impact as to be self-destructive to physicians who participate.
Massachusetts’ compulsory coverage-for-all plan is a case in point of politicians’ failures to understand the critical role that physicians play in subsidized health insurance plans. There have been widespread media reports of Massachusetts’ working poor and middle class, some of the 550,000 persons eligible for subsidized insurance policies, who have purchased policies, only to find that no primary care physician or specialist will take them on. The Bay State policy wonks neglected to grasp the Massachusetts Medical Society’s 2007 poll reporting that 49% of internists aren’t accepting new patients, and that 95% of generalists at Boston’s top teaching hospitals had stopped enrolling new patients.
Trying to avoid a similar fiasco in California, the state medical association (www.calphys.org ) is working with the legislature to mitigate the damages to physician incomes from the proposed 2% provider tax on doctors. California’s approach to slicing the health care pie includes offsets to the provider tax. Medi-Cal would increase its provider reimbursements by approximately $4 billion; insurers would be entitled to only 15% of administration and profits of the premiums paid; and licensure requirements on physician extenders would be eased. A headache for California physicians in the scheme, however, is a new, still unspecified, pay-for-performance plan that would affect reimbursement.
Roger Crumley, MD, MBA, Professor and Chairman of the Otolaryngology- Head and Neck Surgery Department at the University of California, Irvine, suggested that California could exempt physicians who accept Medicaid and/or the state’s new reimbursement plan from the revenue tax using their state identification numbers. David Dale, MD, President of the American College of Physicians, agreed that California could exempt physicians who accept public payer reimbursement from an across-the-board tax. You would think the state would exempt them from such a tax. Using physicians’ government IDs, the government could give an incentive such as an exemption to accept Medicaid and the new state reimbursement for previously uninsured. You could even build in a threshold-they have to accept a certain percentage of Medicaid patients, said Dr. Dale.
The carrot-and-stick strategy proposed in California has already proven untenable in Kentucky, New Mexico, and West Virginia, which all imposed taxes on physician gross revenue, only to repeal them later. West Virginia, which assessed physicians a 1.8% tax on gross revenues in 2002, backed off in 2005. The combination of the tax and medical malpractice premiums that had tripled within a few years drove one-third of the state’s doctors into retirement or out of state.
Even more dangerous are attempts by state officials to coerce physicians into accepting public payers. Beleaguered doctors in Illinois face a significant assault on their professional autonomy. Attorney General Lisa Madigan filed an antitrust lawsuit in June against the Carle Clinic Association and Christie Clinic for declining to enroll new Medicaid patients. The lawsuit alleges that the medical groups collectively boycotted new Medicaid patients by adopting identical policies in 2003. The two large multispecialty groups, which include more than 90% of Champaign County’s physicians, have declined Medicaid enrollees who either were not already registered patients or who had not seen a clinic physician for at least three years. In 2006 the Carle Clinic saw more than 31,000 Medicaid patients from 84 countries, according to CEO Bruce Wellman, MD. He told www.amednews.com , If the government can force private businesses to accept below-cost rates, what sort of practice environment are you going to create?
Illinois’ antitrust lawsuit also claims that physician leaders of the multispecialty groups colluded rather than made independent business decisions about Medicaid patients. If the action is successful, Illinois could force physicians to accept new Medicaid patients and to recover civil fines and damages for antitrust activities. Although the suit alleges that the physicians’ restrictive policies left many of the 20,000 Medicaid eligible children and adults at risk by leaving them with fewer choices to obtain quality medical care, it inhibits physicians from cooperating on solutions to covering the uninsured. The lawsuit alleges that physicians talking to colleagues in other medical groups to devise a collaborative approach to covering the uninsured colluded against Medicaid recipients.
Heading for the Exits?
What will all the attention given to the uninsured mean if physician reimbursement is so low or so burdensome that doctors opt out of the plans? Dr. Dale pointed to the difficulties that physicians have in running an office, keeping up with state and federal regulations, and having flat Medicare reimbursement (which, given inflation, is an actual reduction in payment) for eight years. We need heat, light, and employees to run an office. The average annual cost for health insurance is $6000 to $7000. Massachusetts set the premium rate at about one-third of that. Doctors can’t wish away the high costs of tests and other technology, he said. I feel terrible about the people in Massachusetts who were uninsured and bought these subsidized policies. They are so relieved to have a means to pay for health care, but no doctor who can help them, he added.
Dr. Dale fears that the hassle factor that physicians experienced during managed care’s heyday that pushed many into retirement may be repeated under compulsory universal coverage, state or federal: You know your practice is being monitored and counted under some form of pay-for-performance reporting requirement. What if they get your information wrong? That happens and takes a huge amount of time and effort to get things corrected. Added to that, Medicare reimbursement is supposed to decline by 9.9 percent in 2008. If that happens we expect physicians near retirement to throw in the towel.
Kissimmee, FL-based Maurice Ramirez, DO, who is board-certified in family practice and emergency medicine, sees nothing but trouble caused by compulsory state insurance plans. He foresees a 30% to 35% income reduction for physicians based on lower Medicaid and Medicare revenues and possible newly imposed taxes on their revenues. I talk to colleagues all the time who are desperate about this, who now hate the profession they once loved, he said.
An unintended consequence of single-payer insurance may be the creation of two classes of physicians. Dr. Ramirez explained: The government now tries to keep physicians involved with public payers by enforcing a five-year opt-out provision if they don’t take Medicaid or Medicare patients. If they add compulsory state insurance plans to that, doctors will have to search their souls and decide if they want to be in or out. If they opt out, they’ll go to an all-cash basis practice. He also raised a chilling scenario from the SARS outbreak in Canada several years ago: Ontario doctors were forced to work, threatened with firing or jail time if they didn’t. More than 30% left the system.
The American Medical Association’s Position
Physicians may be flummoxed by the AMA’s recent jump onto the covering the uninsured bandwagon. Its campaign, Voice for the Uninsured, indicates to physicians that this issue will not go away. The AMA plan’s three key elements involve familiar ideas: enable purchase of individually owned health insurance, establish income-related tax credits for purchasing health insurance, and facilitate the development of markets for purchasing individually owned policies (visit www.ama-assn.org/ama/pub/category/17712 . html to see the full proposal).
Underneath the AMA’s proposal, though, is the recognition of the daunting political and regulatory realities that makes providing universal coverage so difficult. The AMA acknowledges that existing regulations often have unintended consequences….The combination of guaranteed issue, strict community rating and extensive benefits mandates has had disastrous effects on costs, coverage and choice. In contrast, the American College of Physicians doesn’t advocate a single-payer system because it increases the risk of patients and physicians losing control of care, and may build in delays to getting care. It targets the fat in the system-i.e., private insurers getting 20% to 30% for administration costs versus Medicare’s 2% to 3% overhead-as money that could be spent on caring for patients.
With all the talk of plans to cover America’s growing number of uninsured and the issue a focal point of the 2008 presidential campaign, physicians should expect continued efforts by the states to enact legislation to cover the uninsured. Most likely that legislation will squeeze physician income and autonomy, so doctors had best be aware of what’s in store for them.
©2008 The Triological Society