Free Markets, Free People

The market speaks: doctors increasingly turning down new Medicare patients

USA Today brings us a story that should surprise no one. Medicare, the supposed model of a government run health care system, is finding that fewer and fewer doctors are willing to take on new patients under that system. They cite the low payments Medicare offers (or perhaps forces) for patient treatment. Baby boomers just now entering the system are going to find their choice of a doctor restricted.

The numbers break down like this:

• The American Academy of Family Physicians says 13% of respondents didn’t participate in Medicare last year, up from 8% in 2008 and 6% in 2004.

• The American Osteopathic Association says 15% of its members don’t participate in Medicare and 19% don’t accept new Medicare patients. If the cut is not reversed, it says, the numbers will double.

• The American Medical Association says 17% of more than 9,000 doctors surveyed restrict the number of Medicare patients in their practice. Among primary care physicians, the rate is 31%.

Note especially that final group. Primary care physicians are the group of physicians that the newly passed health care reform law depends on to implement its “preventive care” regime.

The reason is rather simple and straight forward – Medicare offers 78% of what private insurance pays in compensation for a doctor’s services. Why doctors are leaving or restricting new Medicare patients is rather easy to understand as well:

“Physicians are saying, ‘I can’t afford to keep losing money,’ ” says Lori Heim, president of the family doctors’ group.

Consequently they cut or drastically restrict the source of the loss. While most doctors are not going to turn away existing Medicare patients, they may not accept new ones and finally, through attrition, close their practice to Medicare patients.

It isn’t rocket science – no good businessman is going to continue to do things in which the net result is a loss of money. And a doctor’s private practice is a business – one which employs a number of people. He or she, like any business person running a small business, cannot afford the losses. So they identify the problem and eliminate it.

As this continues it will put them in a direct confrontation with the federal government. It is anyone’s guess, given the current administration’s choices for wielding power, how that will turn out. But what this rejection of the compensation offered by government is doing is bringing to the fore is one of the underlying conflicts of the new health care law – the premise of the law is that government can control costs (and payments) and thereby make medical care less costly. The doctors are saying, go for it, but I’m not playing.

At some point, government is going to have too address those who make that declaration. We’ll then see how free of a country we really are, won’t we?

~McQ

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26 Responses to The market speaks: doctors increasingly turning down new Medicare patients

  • That’s OK. I hear they have Doctor Fix ready.

  • I think that doctors just realized where those cost savings in Obamacare are expected to come from.

  • My salty old doctor has already signaled he’s off this reservation.  There will be LOTS more.
    As I’ve said before, this has to be the most disobeyed law in history…if it every really sees the light of day.

  • I work for a big name medical center and the rumbling is that our governing board has had a couple of very close votes about not taking medicare patients already. The general feeling is that its going to happen because they’re already been testing the waters with not covering some areas/locations.

    • This was talked about multiple times during the run up to the votes on “Obama Doesn’t Care

      • Two things will happen. Both of them bad.
        Large medical organizations (hospitals/clinics etc) will be forced to take Medicare patients as a condition of getting other funds from the federal government. This will happen because more and more Medicare eligible people will not be able to get primary care from individual physicians/small group practices.
         

        • “Funds” aren’t magical, they’re actual monetary values. If the government gives you $10 million but demands $20 million in liabilities, then you are ahead by refusing Medicare patients and losing government funds. You may have to shrink, but better to shrink into profitability than grow into bankruptcy. And if it isn’t clear already that depending on Uncle Sam’s largesse is an increasingly bad way to run your hospital, it will be soon. The government can’t fix the problem of demanding more liabilities then they are willing to pay for simply by yelling that they’ll just take their negative-monetary-flow somewhere else.

          • And when the “other funds” in question are the payouts from the insurance policies in the exchanges?  You know, the exchanges that will eventually replace all but a few employer-offered plans and all of the rest of the private insurance market  because that is what the damn law was written to accomplish?

            Are you “ahead” when you lose almost your entire revenue stream because you won’t take Medicare patients?

  • “Physicians are saying, ‘I can’t afford to keep losing money,’ ” says Lori Heim, president of the family doctors’ group.

    Oh, they ain’t seen nothin’ yet.  Wait until Imeme and his gand of hoodlum get around to demonizing greedy doctors as they did greedy insurance companies as a seque to slapping huge fines taxes on doctors who don’t voluntarily agree to volunteer to treat Medicare patients no matter how little Uncle Sugar pays them.  It’s the Chicago Way: “Dat’s a nice bank car company oil company medical practice youse got dere.  Be a shame if sumpin’… happened to it.”

    Remember, kids: health care is a G-d-given right, and doctors therefore MUST give you all you want no matter how much it costs them.  That’s what rights are these days: an obligation for somebody else to give you what you want.

    McQWe’ll then see how free of a country we really are, won’t we?

    Oh, I think we’ve already seen how free we are under our present federal government.  As you say, the only question is how far Imeme and the rest of the thugs in DC will go to enforce their will on doctors.  The easiest thing to do would be to “dumb down” health care with those new “recommended practices” we’ve been hearing about, such that you won’t need (and, hence, be able) to see a doctor for anything short of a life-threatening emergency.  Instead, you’ll be directed to other “health care professionals”.  Oh, don’t worry: they’ll be perfectly competent to treat you despite not having an MD.  The government will certify them.

    • We’ll rent them from Cousin Fidel, as they do in Africa.

    • All this is pure (corrupt) economics.  As ObamaCare takes hold…if it is ever allowed to…we will see the people with means to obtain health care continue to do so, just as now.  But there will be far, far fewer of them.  They will do what people always do in such circumstances, including a thriving “black-market” in “back alley” health care, and obtaining much of it in other nations.

      • But… but… but… THAT’S NOT FAAAAAIIIIRRRRR!!!!  As we know, the whole point of ObamaCare is to eliminate inequalities in access to health care!*  Rich people shouldn’t STILL be able to go to the head of the line!

        / sarc

        —–

        (*) By making access universally limited, and the health care universally lousy, that is.

  • I spoke with my doctor about this fairly recently, not specifically in this context, but in asking about dealing with Medicare vs. Big Insurance companies.  He said that it’s not doctors turning away patients, but hospitals.  Hospitals that are doing this are also the ones making (generally speaking he said) the greatest profit.  The government (Medicare) assigns a cost to a procedure, say hypothetically a heart surgery and for the sake of argument it’s $100,000.  The government determines these prices by looking at the market average for the procedure.  So what happens is that Hospital A charges $120,000 for this procedure and the government (Medicare) only pays out $100,000.   Then of course, Hospital A takes the same cut as if the government paid the full $120,000, sticking the doctor to make up the remainder.  Doctors get pissed and don’t want more medicare patients etc.  I haven’t yet figured out the solution, but feel that this was a pretty interesting take on the problem, from a doctor who has been working in the system for nearly 30 years.

  • It is not clear from the reference if the rejection of the “Doc Fix” is factored in.  If it is not, then these doctors will be seeing an additional 21% decrease.  In a rational, truth in government world, the Doc Fix would have been included in the health insurance bill.  But, Nancy and Harry didn’t want that figured in the CBO score.
     
    I turned 64 last week.  This is kind of important to me.

  • Next thing you guys will be claiming is that the market is doing these things without the very visible hand of government to control it all and regulate it.   Sheesh.
     
    /sarc
     

  • Nah.
    These practitioners will either adapt, or die out.  And although there might be a lull in quality, there will not be a lull in quantity.  That is the law of the market.
    Really.  If the cream of the crop deems it not as lucrative as other professions requiring similar investment, they will simply venture into the professions that do.  This will leave a gap that the market will fill.  Again, the quality may diminish, but the quantity will not.
    Rest assured, that I’m not suggesting that this is a good thing, but simply inevitable.  Foreign doctors will come from all around to fill the needs of the market.
     
    I see it already.  And I have a great private medical plan through my wife’s job at a stellar law firm.
    I have five different doctors and not one of them speaks without an accent.  Not one.  In fact, my earliest memory of having a doctor that speaks as his neighbors do would give me a lolly after each visit.
     
    I don’t get lollies anymore… just a $20 co-pay.

    • You seem to have a very thin understanding of the “laws of the market”. In the presence of price fixing, which is what this all boils down to, you get one of two absolutely, utterly inevitable results: Excess of supply or shortage. The first happens when the price is fixed above what the market would bear, the second occurs when the price is fixed below. When this happens, in point of fact “the market” does not suddenly flood with people anxious to get in on the loss-leading action. It actually has holes in it, shortages.
       
      Predicting that price fixing causes shortages or excesses (but never balance) is right up there with predicting that when I drop a rock, it will fall to the ground.
       
      Private service may remain strong, in its own market, but Medicare recipients in their price-controlled market very well can end up with shortages, in accordance with the laws of the market as modified by the government price fixing.
       
      Everybody has their own amendments to the Constitution they’d like to make; one of mine is that the minute someone suggests price fixing as the solution to any problem, they immediately be disqualified from public office for the rest of their lives, on the grounds that they are clearly incapable or unwilling to learn anything about economics.

      • I think he intends to suggest the foreign doctor’s costs will be lower than American doctor’s costs will be and they will be able to provide the service within the limit established by Medicaid.
         
        So, cheaper facilities, cheaper education (note, I am not claiming it’s inferior, just monetarily cheaper), etc.
         
         
         

        • That is indeed what the message was.  I thought it was clear.
          It’s just like picking strawberries.  Regardless of the means, when the returns for services dips below the market value for resident providers, foreign imports will pick up the slack.
           
          It’s been that way for centuries.  Nothing here suggests that it will be any different.
           
          Cheers.

          • If that is the case, why are they waiting in line for Canadian Medicare? Sure, some of that spills over to the US, but there are other costs associated with buying care elsewhere.

          • When the full Obama package kicks in, then private insurance like yours will eventually go away.  In fact the plan was designed to kill it.  Then the average person will not be able to afford any but routine care, or go the government route.
            We won’t see doctors flocking into the country to take advantage of generally falling prices, and an uncertain legal situation.
             
            My prediction is that Doctors in other countries will “see” American patients online for a virtual checkup. You send in blood samples and tell them your symptoms and get online treatments and meds.  Then if you need surgery there will exist (probably) an insurance scheme (again headquartered in another country) which will pay some of the expense to get a surgery/vacation to someplace set up for that like Thailand.
             
             
             
             

  • “Foreign doctors will come from all around to fill the needs of the market.”

    I wouldn’t count on it.  At this point, the U.S. attracts physicians educated in the 3rd world to a much greater extent than other developed nations.  That’s because earning potential is relatively competitive.  But with the inevitable consequences of ObamaCare, the attraction of working as a physician in the United States will diminish.  Consequently, the percentage of medical graduates who choose to go Great Britain, France, Canada, New Zealand, Australia, etc. will increase.

    So just as the need for foreign medical graduates in the U.S. will be increasing (becuase of government distortions of the market) demand (in the form of dollars) will remain flat and the great flow of MDs from the third world will “unexpectedly” fail to materialize.

  • You know, I think the doctors could cut some costs as well. My child’s dentist’s office seems very, very overstaffed. 2-3 receptionists, tons of assistants, and only like 5 kids as patients each hour. Also, most of the time is spent waiting around for the dentist to make his appearance for 2 minutes of actual work. That’s fine if the overall charge wasn’t a couple hundred dollars an hour.