I
know that for many of you this problem is not very pressing
right now, but for all practicing physicians it is a matter
of life and death. The medical private practice system
works in a very simple manner: you see patients and bill
their insurance companies, at some point (weeks to months
later) you receive your payment, you put it all together
each month, subtract your expenses for the office, personal
and supplies, and what is left is yours.
Now the REALITY comes:
A. Revenues: In the 80's it used to be that insurance
companies covered up to a 100% of claimed price for a
diagnostic test or treatment. Physician's practices were
making very substantial amounts of money. |
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In
1980, the cost of administering health care was about
15 cents on a $1. The Government decided, that it is too
high and HMOs (Health Management Organizations) were born.
They were supposed to keep an eye on doctors so doctors
do not order "unnecessary" tests, drugs etc.
In 2003, the cost of administering health care is 40 cents
on a $1. Here goes 40% of your return.
Medicare is the largest payer in the system covering everyone
above the age of 65 and since it is government-owned,
it does what the government tells it to do. Medicare reimbursements
were dropping steadily between 2-5% per year over the
last 10 years. With baby boomers becoming the ever-larger
group of the population, we depend on the Medicare more
and more. You may not like the way the Medicare pays you
but you cannot refuse to see Medicare-covered patients,
every contract has this clause. So you are stuck to accept
smaller and smaller payments. |
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B.
Expenses used to be as low as 10-15% of the revenues until
revenues started to drop. Revenues are not always there
but expenses are. Now it is about a 35% of your revenues
if you are lucky.
Are you ready to rumble…?
C. And now comes our feature presentation - Her
Majesty - MALPRACTICE INSURANCE. It used to be that doctors
paid $1,000-5,000 a year to get protection from lawsuits.
With the gap between wealthy and poor widening, the malpractice
claims started to rise together with awards for those
claims. Trying to protect their profits insurance companies
started to increase their premiums and started to remove
"bad risk" doctors from their lists. The cost
of malpractice coverage rose to astronomical levels, reaching
$250-300,000 per year for some doctors.
Now look at the formula: A-(B+C) |
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If you make what
you make and cannot increase your revenues no matter what you
do on one hand (in fact your revenues are dropping), and on
the other you have rising expenses and the cost of malpractice
insurance there comes a point in time when you stop making money,
and I am not talking about making a lot of money, I am talking
about making NO MONEY AT ALL.
The job of a physician is taxing enough, not to mention that
getting to the private practice level is extremely difficult
and takes about 15 years. People just do not want to work for
pennies and they look for a better place to apply their energy.
Since this situation has become intolerable and really threatens
our existence a group of doctors from Ohio went to Washington,
DC to discuss this situation and potential ways to resolve it
with the members of the Senate and the House of Representatives.
Jan 27
Senator James Inhofe (OK)
Representatives John Hostettler (IN), Mike Oxley (OH),
Steve Chabot (OH), Pat Toomey (PA), and Ron Paul (TX), and
House Sub-Committee on Health (HWM) |
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Jan
28
Senators Mike DeWine (OH), John Ensign (NV), Chris
Dodd (CT), and George Voinovich (OH)
Representatives John Shaddeg (AZ), Ted Strickland
(OH), Roscoe Bartlett (MD), Tim Ryan (OH), Steve LaTourette
(OH), Pete Hoekstra (MI) and Mark Foley (FL)
Jan 29
Senators George Allen (VA), Sam Brownback (KS),
Norm Coleman (MN), and Rick Santorum (PA)
Representatives Saxby Chambliss (GA), Deborah Pryce
(OH), Ralph Regula (OH), and J.D. Haworth (AZ), and
Tim Trysla at the Committee of Medicaid and Medicare Services
at the Department of Health and Human Services |
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Most meetings were very productive and, although, I
am not very optimistic that much will change, I think
that we all have to work together to provide the best
possible care to our patients and protect doctors practices
from destruction.More information about this problem
and the trip can be obtained on the web
site of the Continental Group
During the trip I had a chance to meet with Lyuba Vartikovski,
MD - the lead scientist at the Laboratory of Human Carcinigenesis
of the Center for Cancer Research at the National Institutes
of Health in Bethesda, MD. She is a member of R-AMA
and is a Founder of the The Association of Russian Speaking
Professionals in Health Care of Massachusetts. She wholeheartedly
supports the idea of R-AMA and ARSPHC.
Boris
Vinogradsky, MD
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