Photo: fotos gov/ba via flickr
American doctors are facing a financial crisis. According to Parija Kavilanz of CNN Money, physicians blame “shrinking insurance reimbursements, changing regulations, and rising business and drug costs” for their recent financial troubles.
As private practices become victims of health care reform and Medicare and Medicaid cuts, many doctors are being forced to shut their doors.
A study by the centres for Medicare and Medicaid Services reported that the number of physician office visits declined as 'some people deferred going to see the doctor to reduce expenses.' The annual growth in spending on physicians services steadily declined from 9.7% in 2001.
Source: Medscape Medical News
Until the Medicare Modernization Act of 2004, oncologists could buy drugs at bulk prices from drug makers and sell them at much higher prices to their patients earning a profit for their practice. The law limits Medicare reimbursement to the average sale price (ASP) of cancer drugs administered in doctors offices, plus 6%.
Oncologist George Kovach told John Carrol of Managed Care that the problem with the government formula is that it accounts for rebates in the calculation of ASP that are not included in actual purchase price and that it's often using outdated prices. Some oncologists have lost half of their income as result.
Another oncologist told CNN Money that he was $3.2 million in debt by mid-2010, due to the loss of the profit he made off of drug sales.
Major cuts in Medicare reimbursements for cardiologists are causing them to reconsider staying in private practice
60% of physicians said health reform will compel them to close or restrict their practices to Medicare and Medicaid patients
In 2009, The Physicians' Perspective: Medical Practice in 2008 survey reported that out of 11,950 physicians:
- 65% said Medicaid reimbursement is less than their cost of providing care and 36% said Medicare provides reimbursement that is less than their cost of providing care.
- Over 33% of physicians have closed their practices to Medicaid patients and 12% have closed their practices to Medicare patients.
This was a record high for the state since the trend started in 2007 when 70 doctors ended their involvement with Medicare.
According to the Texas Medical Association, 34% of Texas doctors either limit the number of Medicare patients they accept or don't accept any new Medicare patients, and 42% of Texas doctors are considering opting out of Medicare.
Source: Houston Chronicle
A 2010 survey conducted by AARP found that 17% of all Idaho physicians have closed their doors to new Medicare patients and 21% to new Medicaid patients. These numbers are 3% higher for primary care doctors.
56% of physicians said health care reform will diminish the quality of care they are able to provide
In 2010, only 10% of physicians said reform will improve the quality of patient care they are able to provide.
More than half of physicians said the reform will cause patient volumes in their practices to increase, but 69% said they no longer have the time or resources to see additional patients in their practices while maintaining quality of care.
Software for electronic medical records, e-prescribing, and adherence to the measures set out by the Patient Protection and Affordable Care Act are adding to cost burdens for physicians
In May 2011, The Physicians' Foundation released A Roadmap for Physicians to Health Care Reform stating that new health information technology (HIT) requirements were taxing on physicians' wallets and time. As as result, it might drive them to sell their practices in order 'to share the costs of these requirements and to secure necessary HIT and payment support.'
The 2010 Doctor Survey found that 94% of physicians said that the time they devote to non-clinical paperwork in the last three years has increased; more than half said paperwork takes away from the time they spend with their patients.
A study released by Deloitte in December 2011 showed that only 4% of all physicians surveyed believe their income will increase next year as a result of health reform. Nearly half believe their income will decrease.
Mac Lion, CEO of Lion & Company CPAs, LLC, told CNN Money that a large part of profit leaks in private practice is tied to money owed by patients or insurers and doctors' lack of business savvy.
In 2010, 40% of physicians said they would drop out of patient care in one to three years in response to reform
Not only are the doctors not doing well financially, but three quarters of them find medicine less rewarding and are working either at full capacity or are overextended.
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