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By JULIA L. ROGERS, AOL SMALL BUSINESS
Posted: 2010-04-01 17:50:20
AP
Now that the Health Care Reform Act has officially passed, small businesses -- whether in support of the health care reform bill or against it -- are processing what the future will hold. Many small businesses still feel discombobulated by the very complicated details of the new, tide-changing health care reform.
In 2014, organizations that have 50 or more employees and do not provide affordable health coverage to employees could face penalties of up to $2,000 per full-time employee. The health care reform offers some good news for smaller businesses with fewer than 25 employees and average annual salaries equaling less than $50,000 per worker: They will not face penalties and even receive tax credits for offering health insurance, which could help them provide potentially attractive benefits packages to their staff without breaking their budgets.
Despite the suggested benefits of the health care plan, entrepreneurs and small business owners across industries have expressed concern and confusion about its real impact, and which waves they will actually feel from now until 2014. They have a lot of questions about whether or not the new plan will negatively affect their companies, and some worry it will not actually be legitimately affordable or provide care that suits their specific needs. They are also concerned about how such radical structural change may alter the quality of the overall health care system in the U.S.
The following 7 small business owners weighed in on how they see the Health Care Reform Act affecting the U.S., their businesses, and their families in the future.
Brian C. Greenberg, CPA, Brian C. Greenberg & Assoc., Marlton, New Jersey
"It is a mistake to think the health care bill will only affect individuals making over $250,000 annually. In fact, all working people, particularly those who are employed by companies with greater than 50 employees will be severely affected. If they have single coverage, they will be contributing $4,000 a year, and if they have family coverage, they will contribute nearly $11,000. This is a non-deductible 40% excise tax that hits in 2018 that employers must pay. Of course, these funds will come from future pay increases, wage cuts and/or layoffs. However, the most likely scenario is that many companies will opt for the penalty and drop health insurance for their employees, causing massive migration of Americans to seek government insurance.
"Additionally, the 40% excise tax amount is assessed on insurance companies if their premiums exceed $10,200 for individuals and $27,500 for family coverage. It is indexed at a 2% increase in subsequent years. Thus, if insurance companies are prevented from passing on costs in the form of higher premiums, then their only other option will be to drive coverage to the least costly area. The family doctor will have been long gone, replaced by under-staffed, over-utilized clinics where waits for elective procedures will be months and years rather than days and weeks. Physicians already discouraged by the high cost of education will continue to suffer a decline of new professionals exacerbating the delivery of timely and quality medical services."
Ivor Irwin, Freelance Writer, Chicago
"I am very lucky that my wife's job covers the family well, especially since I got my chest cracked 12 years ago. It's very hard for single freelancers out there especially. As customers grow used to the idea that they've 'got us' and can use the lure of 'maybe I'll need a full-time part-timer soon,' I expect wages to plummet in the freelance writing market, not improve. A lot of self-employed writers will be living along the margins in a kind of Raskolnikov-esque existence. The monolithic power of the insurance companies will surely be felt by us all once they flex their muscles and raise rates.
"A good thing that can come out of this is that insurance companies will surely be no longer able to 'cap' their spending. I grew up in a socialist England. Free medical care and dentistry is a right, but not if you have to wait 12 hours in a queue (which is normal) and if the doctors and nurses have a kind of sarcastic contempt for the public. Seeing a specialist in Blighty means, literally, making an appointment months in advance. When my dad got lymph node cancer as a part of the swath of illnesses that swept across Europe after Chernobyl, he became one of those statistics we write about, waiting for months to see a specialist. I witnessed the English system killing him, because most of the workers were ill-trained, apathetic, inexperienced and overwhelmed by the vast number of patients. All of the good medical people in England head here as fast as they can, of course. Consequently, I fear this will become the rule, rather than the exception over here, too.
"Additionally, if states have to account for every penny and govern responsibly, I wonder what will happen from now on to illegal immigrants?"
Janie Peterson, e-video Executive Producer, Peterson Productions Live, Minneapolis
"I'll be allowed to stay in business on my own, thanks to the Reform Act. Insurance premiums were rising so much, I could not justify the expense for my small business. With three kids and a husband, the monthly premiums were far too high with very little reward. If my husband or I were to get sick, we couldn't keep up the payments anyway. So what good did it do us? We were trying to do the right thing and buy into a plan, but rising costs were causing me to think about another corporate job with health benefits.
"I'm thrilled to have health care reform in place, so we can continue building our small business and see our kids through elementary school and beyond. We used to have media jobs and hated seeing so many of our friends laid off in recent years. At the same time, we're happy we made the switch to open our own e-video shop and feel ahead of our peers professionally. Now we can really make our kids a priority at the same time."
Rick Goetz, Music Consultant, New York City
"I'm not saying the system doesn't need reform, but what concerns me is that there are so many moving parts that no one can tell me how this will impact me or my business. It makes me wonder if those in the positions of power even know for sure, because it is not as if I haven't spent a considerable amount of time trying to understand.
"I have been shopping for a new insurance plan for the last several months, and some of the existing low-cost plans seem like they are not worth having at all. I am hopeful that this health care plan will provide good coverage for everyone, but I must admit to being a bit worried about the idea of having to pay for a plan that might not be worth the money. I personally don't care about the 'socialist' aspects that seem to worry some people but am more concerned that I might get stuck with a mandatory product that isn't worth its weight. I just hope, whatever may come, that getting medical care is a more enjoyable experience than dealing with other government run institutions -- like the DMV."
Kathryn Korostoff, Founder and President, Research Rockstar, Westborough, Massachusetts
"I owned a small business for 15 years and always provided health care. Yes, it was expensive. But I considered it just another cost of doing business. Some employees were on spouses' plans, so that saved me some money. I paid 50% of the premium per employee, and everyone seemed to find it acceptable. The plan was quite good, but I did not offer dental because that was too expensive.
"I sold that company and just recently started a new one, so the potential costs do not yet relate to me. But I can't imagine having employees without offering them basic health care.
"Compared to all the other costs of running a business -- rent, equipment, legal fees, business insurance, salaries, etc. -- I have never considered health care to be something that would 'break' my business."
Dr. Tom Potisk, Holistic Physician and Author, Caledonia, WI
"I'm truly happy that those who were unable to access health care previously will now be able to do so. But I'm concerned that many people assume their health care is a doctor's or an insurance company's responsibility. Statistics truly show that we need additional self care more than we need additional health care. Poor eating habits, lack of physical activity, and even improper posture are examples where self care and doing things differently would result in better long-term health. The reform contains benefits like no co-payment for some tests, but it's important to remember that all those tests are really early detection, not real prevention."
Friday, April 2, 2010
Business Bids to Shape Health Changes
Business Bids to Shape Health Changes
Chamber of Commerce Plans Effort to Challenge New Regulations and Unseat Those Who Voted for Law
By JANET ADAMY
The U.S. Chamber of Commerce is planning a broad effort to blunt the health overhaul by trying to shape its regulatory language and spending heavily to unseat vulnerable Democrats who voted for it.
The campaign is the latest example of the escalating tensions between proponents of the health overhaul and big businesses, which have become more specific in their criticisms of the new law.
In recent days, a handful of large companies have reported hefty charges because the law eliminates a tax deduction for firms that offer prescription-drug coverage to retirees.
In a letter to board members Monday, chamber president and chief executive Thomas J. Donohue said the business lobby will seek changes to regulations to "minimize the potentially harmful impacts of this bill on our members and the country." If regulators "exceed legislative mandates or try for end-runs around the lawful rule-making process," he wrote, the chamber "will take legal action."
Mr. Donohue also said the group planned to spend $50 million this summer and fall to ensure that voters in pivotal House and Senate races know where lawmakers stand on health and other big issues. The chamber spent $36.4 million in the 2008 election.
At the heart of the effort will be a team of chamber staff that will "participate in the years-long process of writing the thousands of pages of federal regulations that will implement the many provisions of this legislation," Mr. Donohue wrote.
While the chamber can't actually write those provisions, it can lobby for certain language and technical corrections.
Other major lobbies are readying similar efforts. Although the legislation contains more than 2,000 pages of provisions, many details are left to the secretary of the U.S. Department of Health and Human Services to define, and will require more specific regulatory language.
The U.S. Chamber of Commerce plans to spend $50 million this summer and fall to sway election outcomes around the issue. Janet Adamy joins the News Hub to discuss.
America's Health Insurance Plans, the insurance industry's main lobbying group, has formed a task force to coordinate its implementation efforts and plans to give its input as officials draw up the regulations.
The American Medical Association, which represents doctors, hopes to shape provisions including a new panel to impose Medicare payment cuts, as well as increased research comparing the effectiveness of medical treatments, according to a spokeswoman for the group.
Major groups that supported the bill also plan to spend heavily on the 2010 elections. The AFL-CIO labor organization plans to surpass the $53 million it spent during the 2008 elections in this year's fall races.
Meanwhile, Families USA, a liberal advocacy group, has teamed with insurers to launch an educational campaign that will help people sign up for insurance at places like doctors' offices and pharmacies.
President Barack Obama on Tuesday signed into law the final package of changes to the health overhaul. The $938 billion overhaul will extend health insurance to 32 million Americans by expanding the Medicaid federal-state insurance program for the poor and giving lower earners tax credits to offset the cost of buying care.
In exchange, most Americans will be required to carry insurance and employers will be required to help pay for it.
Lawrence Summers, chairman of the president's National Economic Council, said Tuesday that the bill would help large firms in multiple ways. For instance, he said, employers now pay about $1,000 per worker more for insurance to subsidize medical care for the uninsured, an amount the new law would reduce.
"The bill represents our nation's most serious effort ever at health-care cost control, which ultimately addresses for many of these businesses what is their largest cost," Mr. Summers said.
In his letter, Mr. Donohue contended the law would impose $569 billion in new and higher taxes that would eliminate jobs, increase insurance premiums and prompt millions of workers to leave employer plans for government-subsidized insurance. The organization, which says it represents three million employers, was among the most vocal opponents of the legislation while Congress assembled it.
In recent days, a number of large companies, including insurer Prudential Financial Inc., telecom giant AT&T Inc. and heavy-equipment maker Caterpillar Inc. have announced millions of dollars in charges to offset the tax change on retirees' prescription-drug benefits.
In his letter, Mr. Donohue criticized House Democrats for calling the companies to appear before Congress next month to explain the charges.
"They are searching for a way to blame these businesses for a mess that the lawmakers themselves have made," he wrote.
Democrats said they would fight attempts by business to oppose the bill's changes.
"There's going to be a lot of different players in the health-care field that are going to want changes made to protect what they've had in the past," said Sen. Tom Harkin (D., Iowa). "I don't think we're going to be too anxious to continue the kind of subsidies we've had in the past that drain so much money out of the health-care system."
Write to Janet Adamy at janet.adamy@wsj.com
Chamber of Commerce Plans Effort to Challenge New Regulations and Unseat Those Who Voted for Law
By JANET ADAMY
The U.S. Chamber of Commerce is planning a broad effort to blunt the health overhaul by trying to shape its regulatory language and spending heavily to unseat vulnerable Democrats who voted for it.
The campaign is the latest example of the escalating tensions between proponents of the health overhaul and big businesses, which have become more specific in their criticisms of the new law.
In recent days, a handful of large companies have reported hefty charges because the law eliminates a tax deduction for firms that offer prescription-drug coverage to retirees.
In a letter to board members Monday, chamber president and chief executive Thomas J. Donohue said the business lobby will seek changes to regulations to "minimize the potentially harmful impacts of this bill on our members and the country." If regulators "exceed legislative mandates or try for end-runs around the lawful rule-making process," he wrote, the chamber "will take legal action."
Mr. Donohue also said the group planned to spend $50 million this summer and fall to ensure that voters in pivotal House and Senate races know where lawmakers stand on health and other big issues. The chamber spent $36.4 million in the 2008 election.
At the heart of the effort will be a team of chamber staff that will "participate in the years-long process of writing the thousands of pages of federal regulations that will implement the many provisions of this legislation," Mr. Donohue wrote.
While the chamber can't actually write those provisions, it can lobby for certain language and technical corrections.
Other major lobbies are readying similar efforts. Although the legislation contains more than 2,000 pages of provisions, many details are left to the secretary of the U.S. Department of Health and Human Services to define, and will require more specific regulatory language.
The U.S. Chamber of Commerce plans to spend $50 million this summer and fall to sway election outcomes around the issue. Janet Adamy joins the News Hub to discuss.
America's Health Insurance Plans, the insurance industry's main lobbying group, has formed a task force to coordinate its implementation efforts and plans to give its input as officials draw up the regulations.
The American Medical Association, which represents doctors, hopes to shape provisions including a new panel to impose Medicare payment cuts, as well as increased research comparing the effectiveness of medical treatments, according to a spokeswoman for the group.
Major groups that supported the bill also plan to spend heavily on the 2010 elections. The AFL-CIO labor organization plans to surpass the $53 million it spent during the 2008 elections in this year's fall races.
Meanwhile, Families USA, a liberal advocacy group, has teamed with insurers to launch an educational campaign that will help people sign up for insurance at places like doctors' offices and pharmacies.
President Barack Obama on Tuesday signed into law the final package of changes to the health overhaul. The $938 billion overhaul will extend health insurance to 32 million Americans by expanding the Medicaid federal-state insurance program for the poor and giving lower earners tax credits to offset the cost of buying care.
In exchange, most Americans will be required to carry insurance and employers will be required to help pay for it.
Lawrence Summers, chairman of the president's National Economic Council, said Tuesday that the bill would help large firms in multiple ways. For instance, he said, employers now pay about $1,000 per worker more for insurance to subsidize medical care for the uninsured, an amount the new law would reduce.
"The bill represents our nation's most serious effort ever at health-care cost control, which ultimately addresses for many of these businesses what is their largest cost," Mr. Summers said.
In his letter, Mr. Donohue contended the law would impose $569 billion in new and higher taxes that would eliminate jobs, increase insurance premiums and prompt millions of workers to leave employer plans for government-subsidized insurance. The organization, which says it represents three million employers, was among the most vocal opponents of the legislation while Congress assembled it.
In recent days, a number of large companies, including insurer Prudential Financial Inc., telecom giant AT&T Inc. and heavy-equipment maker Caterpillar Inc. have announced millions of dollars in charges to offset the tax change on retirees' prescription-drug benefits.
In his letter, Mr. Donohue criticized House Democrats for calling the companies to appear before Congress next month to explain the charges.
"They are searching for a way to blame these businesses for a mess that the lawmakers themselves have made," he wrote.
Democrats said they would fight attempts by business to oppose the bill's changes.
"There's going to be a lot of different players in the health-care field that are going to want changes made to protect what they've had in the past," said Sen. Tom Harkin (D., Iowa). "I don't think we're going to be too anxious to continue the kind of subsidies we've had in the past that drain so much money out of the health-care system."
Write to Janet Adamy at janet.adamy@wsj.com
Thursday, April 1, 2010
What Does the Healthcare Reform Bill Really Mean for Doctors?
What Does the Healthcare Reform Bill Really Mean for Doctors?
Leslie Kane, MAC
Posted: 03/23/2010
Introduction
Euphoria or consternation?
Many Americans are cheering about the recent landmark healthcare reform legislation. Others are dismayed, and still others feel a mix of optimism and trepidation.
What do doctors stand to gain or lose in all of this?
As people in a caring profession, many doctors are either truly or theoretically happy that about 32 million more Americans will soon have health insurance.
Yet physicians have every right to be concerned about their own livelihoods and medical practices. For some doctors, the healthcare bill will create benefits and opportunities. Others see no benefits, particularly specialists. And funding the reform -- despite what politicians say -- could portend an ominous future for physicians.
"In the short timeframe, the premises are great," says Thomas N. Ahlborn, MD, President of Medical Staff and Director of the Department of Surgery at Valley Hospital in Ridgewood, New Jersey.
"It appears that internists will get paid adequately, insurers will accept people with preexisting conditions and won't be able to drop patients from insurance plans if they're ill, and there will be subsidies for people who don't make enough to pay for their own insurance," says Ahlborn. "These are all great things."
"But the reality is that the expense is going to be huge and there's nothing in there to control costs," says Ahlborn. Ultimately, a shortfall could come from physicians' pockets, he says.
Also, the proposed 21.2% Medicare reimbursement cuts still loom like a fire-breathing dragon that could wreak havoc on the best-laid plans.
Some Pros, Some Cons for Doctors
Although the currently uninsured population clearly benefits, the new legislation brings both positives and negatives to doctors. The key areas are new Medicaid patients at Medicare reimbursement rates, potential new business opportunities for primary care, funding issues and controlling expenses, lack of tort reform, continued chaos with Medicare reimbursement rates, and prevention efforts.
New Medicaid Patients at Medicare Reimbursement Rates
About 16 million Americans will be added to the Medicaid program. Medicaid reimbursements will be raised to Medicare levels for general internists, family physicians, and pediatricians in 2013 and 2014.
"A number of doctors have said that this is a good thing," says Ahlborn. Many primary care physicians anticipate new patients at what they consider a fairly attractive reimbursement rate.
"Some internists say, 'Medicare pays us better than some of the other plans that pay us only 70% to 80% of Medicare,'" says Ahlborn. "So for them to have these potential new patients and be reimbursed at full Medicare rates is positive."
Still, many doctors have no interest in this new pool of Medicaid patients. Throughout the country, some doctors are trying to lower their percentage of Medicare patients or even eliminate them entirely. Some doctors will also avoid the new Medicaid patients because they say that dealing with government insurance programs is a snarled tangle of frustrating paperwork.
"I think there will be a great number of primary care physicians who will not take either Medicaid or Medicare patients," says Mary Ann Bauman, MD, IM, and Medical Director for Women's Health and Community Relations with Integris Family Care Central, Oklahoma City, Oklahoma. "Doctors want to give the best care to everyone, but sometimes the present insurance system makes it difficult."
Most physicians don't have that choice, says Ahlborn. "A lot of physicians operate on very short margins and are unable to cut their overhead. They get paid relatively little per patient visit and need to have volume. Yes, there are premier practices that won't accept insurers offering less than Medicare rates, but they are the exception rather than the rule."
Although many primary care doctors are eager to start seeing these new patients, specialists get the short end of the stick. The Medicaid reimbursement rate for them will not rise to Medicare levels.
"Congress was very smart to say that they would pay primary care physicians 100% of Medicare rates," says Ahlborn. "But specialists and people who do procedures may simply say they won't see Medicare patients, or they'll see a very small number of them."
New Business Opportunities for Primary Care?
The roster of newly insured patients could turn into a flood or it could turn out to be less than anticipated. But in many cases, it could represent practice opportunities for doctors.
New business models may attract primary care physicians willing to hire more PAs and NPs in order to see patients. Doctors who expand in this way could increase their volume of patients while containing costs by using healthcare providers with salaries less than that of physicians.
Inner-city practices may spring up. Some doctors may be interested in setting up practices in inner cities or areas where patients are now served by clinics or training hospitals. "There might be more demand in inner-city areas or indigent areas where the Medicaid population is greater," says Ahlborn. "Many of those distressed areas probably have a paucity of physicians to begin with."
Payment instead of unpaid charity care. Hospitals currently lose millions of dollars annually on charity care for patients who show up in the emergency room without insurance and who do not pay their bills. Physicians also do not get paid -- or receive a pittance -- for charity care. If patients going to hospital emergency rooms have insurance -- even at Medicare rates -- hospitals and doctors will receive at least some degree of payment.
More primary care doctors will be trained. There are provisions of increasing the number of primary care doctors to be available in the future to care for the additional patients.
However, Ahlborn cautions that it's not a given that all newly insured patients will opt to see primary care doctors in office practices.
"Most uninsured people are being seen now, whether it's in clinics or hospital emergency rooms," says Ahlborn. "There are also people who have the opportunity to see physicians but don't access them. And some patients may not be diligent at managing their healthcare or getting screening tests every year or every 3 years. "
Funding the Plan and Controlling Expenses
A new tax being levied to fund healthcare reform may hit doctors (and other high earners) harder than the rest of the population.
The legislation calls for a 3.8% Medicare Part A (hospital insurance) tax on unearned income for individuals making more than $200,000 ($250,000 for married couples). Many doctors are in that tax bracket.
"You'll pay a tax on your investment capital gains, and if you sell your house, you'll pay a tax on the capital gains," says Ahlborn.
Paying hefty taxes may lead doctors to question working nights and extra hours. When such a large chunk of income goes to taxes, it becomes less attractive to take personal time to bring in more income.
Bauman says, "I don't think Americans have the stomach for the raise in taxes needed to make healthcare a right and not a privilege."
"Ultimately, this is untenable," says Ahlborn. "The cost of these entitlement programs is going to be astronomical. It sounds good that insurers have to accept everyone with preexisting conditions, but where does the money come from?"
Tort Reform Is Overlooked
The inattention to malpractice reform has 2 effects: It fails to lessen the number of lawsuits brought against doctors by plaintiffs looking for a quick jackpot. It also neglects to address the very real issue of defensive medicine, which doctors say jacks up the costs of healthcare.
"If a doctor has ever gone to court, he's going to do anything to never have to go back again," says Ahlborn. "Physicians order hundreds of exams every year just to document conditions that don't exist. Even if they know that the chance of something being there might be 1 in 10,000, they will still order. In this legislation, they did not even toss a little bone to discuss tort reform."
Adds Bauman, "I know that every doctor who is a good doctor practices defensive medicine. So I'm disappointed that tort reform will not be a part of the healthcare reform bill. I think that will make doctors less willing to embrace those newly insured patients."
Continued Chaos With Payment Rates
Notably absent was any mention of fixes to the Sustainable Growth Rate (SGR), which determines physician reimbursement. Medicare reimbursements cuts -- whether or not made at the full 21.2% as proposed -- would be disastrous.
"The biggest issue on the physician's horizon right this minute is the proposed 21.2% Medicare pay cuts," says Ahlborn. "If those cuts were to occur, it would be devastating to primary care, particularly internists, who run on such small margins. Everyone knows that. My understanding is that it can't happen."
Even with that tax, however, private and government insurers are taking in too little to fund healthcare benefits," says Ahlborn. "Part of the budget reconciliation scoring included the 21% cut in physician fees. That's why it could be budget-neutral. However, such a cut would shake the foundation of the system and the consequences would be significant."
A natural place for the government to try to make up the difference is through cuts to doctors' reimbursement, says Ahlborn.
Prevention and Wellness
Many politicians have said that keeping patients healthy through prevention education will be important as far as keeping healthcare costs low.
Where's the beef?
The legislation contains no financial incentives directed at patients to encourage them to lower their cholesterol, quit smoking, lose weight, or in other ways to take responsibility for their health. At the moment, responsibility rests with public education programs and with physicians who are supposed to motivate patients. The patient has little financial incentive to be a collaborator.
"It will be interesting to see what plays out," says Ahlborn.
Authors and Disclosures
Author(s)
Leslie Kane, MAC
Editorial Director, Medscape Business of Medicine
Disclosure: Leslie Kane, MAC, has disclosed no relevant financial relationships.
Leslie Kane, MAC
Posted: 03/23/2010
Introduction
Euphoria or consternation?
Many Americans are cheering about the recent landmark healthcare reform legislation. Others are dismayed, and still others feel a mix of optimism and trepidation.
What do doctors stand to gain or lose in all of this?
As people in a caring profession, many doctors are either truly or theoretically happy that about 32 million more Americans will soon have health insurance.
Yet physicians have every right to be concerned about their own livelihoods and medical practices. For some doctors, the healthcare bill will create benefits and opportunities. Others see no benefits, particularly specialists. And funding the reform -- despite what politicians say -- could portend an ominous future for physicians.
"In the short timeframe, the premises are great," says Thomas N. Ahlborn, MD, President of Medical Staff and Director of the Department of Surgery at Valley Hospital in Ridgewood, New Jersey.
"It appears that internists will get paid adequately, insurers will accept people with preexisting conditions and won't be able to drop patients from insurance plans if they're ill, and there will be subsidies for people who don't make enough to pay for their own insurance," says Ahlborn. "These are all great things."
"But the reality is that the expense is going to be huge and there's nothing in there to control costs," says Ahlborn. Ultimately, a shortfall could come from physicians' pockets, he says.
Also, the proposed 21.2% Medicare reimbursement cuts still loom like a fire-breathing dragon that could wreak havoc on the best-laid plans.
Some Pros, Some Cons for Doctors
Although the currently uninsured population clearly benefits, the new legislation brings both positives and negatives to doctors. The key areas are new Medicaid patients at Medicare reimbursement rates, potential new business opportunities for primary care, funding issues and controlling expenses, lack of tort reform, continued chaos with Medicare reimbursement rates, and prevention efforts.
New Medicaid Patients at Medicare Reimbursement Rates
About 16 million Americans will be added to the Medicaid program. Medicaid reimbursements will be raised to Medicare levels for general internists, family physicians, and pediatricians in 2013 and 2014.
"A number of doctors have said that this is a good thing," says Ahlborn. Many primary care physicians anticipate new patients at what they consider a fairly attractive reimbursement rate.
"Some internists say, 'Medicare pays us better than some of the other plans that pay us only 70% to 80% of Medicare,'" says Ahlborn. "So for them to have these potential new patients and be reimbursed at full Medicare rates is positive."
Still, many doctors have no interest in this new pool of Medicaid patients. Throughout the country, some doctors are trying to lower their percentage of Medicare patients or even eliminate them entirely. Some doctors will also avoid the new Medicaid patients because they say that dealing with government insurance programs is a snarled tangle of frustrating paperwork.
"I think there will be a great number of primary care physicians who will not take either Medicaid or Medicare patients," says Mary Ann Bauman, MD, IM, and Medical Director for Women's Health and Community Relations with Integris Family Care Central, Oklahoma City, Oklahoma. "Doctors want to give the best care to everyone, but sometimes the present insurance system makes it difficult."
Most physicians don't have that choice, says Ahlborn. "A lot of physicians operate on very short margins and are unable to cut their overhead. They get paid relatively little per patient visit and need to have volume. Yes, there are premier practices that won't accept insurers offering less than Medicare rates, but they are the exception rather than the rule."
Although many primary care doctors are eager to start seeing these new patients, specialists get the short end of the stick. The Medicaid reimbursement rate for them will not rise to Medicare levels.
"Congress was very smart to say that they would pay primary care physicians 100% of Medicare rates," says Ahlborn. "But specialists and people who do procedures may simply say they won't see Medicare patients, or they'll see a very small number of them."
New Business Opportunities for Primary Care?
The roster of newly insured patients could turn into a flood or it could turn out to be less than anticipated. But in many cases, it could represent practice opportunities for doctors.
New business models may attract primary care physicians willing to hire more PAs and NPs in order to see patients. Doctors who expand in this way could increase their volume of patients while containing costs by using healthcare providers with salaries less than that of physicians.
Inner-city practices may spring up. Some doctors may be interested in setting up practices in inner cities or areas where patients are now served by clinics or training hospitals. "There might be more demand in inner-city areas or indigent areas where the Medicaid population is greater," says Ahlborn. "Many of those distressed areas probably have a paucity of physicians to begin with."
Payment instead of unpaid charity care. Hospitals currently lose millions of dollars annually on charity care for patients who show up in the emergency room without insurance and who do not pay their bills. Physicians also do not get paid -- or receive a pittance -- for charity care. If patients going to hospital emergency rooms have insurance -- even at Medicare rates -- hospitals and doctors will receive at least some degree of payment.
More primary care doctors will be trained. There are provisions of increasing the number of primary care doctors to be available in the future to care for the additional patients.
However, Ahlborn cautions that it's not a given that all newly insured patients will opt to see primary care doctors in office practices.
"Most uninsured people are being seen now, whether it's in clinics or hospital emergency rooms," says Ahlborn. "There are also people who have the opportunity to see physicians but don't access them. And some patients may not be diligent at managing their healthcare or getting screening tests every year or every 3 years. "
Funding the Plan and Controlling Expenses
A new tax being levied to fund healthcare reform may hit doctors (and other high earners) harder than the rest of the population.
The legislation calls for a 3.8% Medicare Part A (hospital insurance) tax on unearned income for individuals making more than $200,000 ($250,000 for married couples). Many doctors are in that tax bracket.
"You'll pay a tax on your investment capital gains, and if you sell your house, you'll pay a tax on the capital gains," says Ahlborn.
Paying hefty taxes may lead doctors to question working nights and extra hours. When such a large chunk of income goes to taxes, it becomes less attractive to take personal time to bring in more income.
Bauman says, "I don't think Americans have the stomach for the raise in taxes needed to make healthcare a right and not a privilege."
"Ultimately, this is untenable," says Ahlborn. "The cost of these entitlement programs is going to be astronomical. It sounds good that insurers have to accept everyone with preexisting conditions, but where does the money come from?"
Tort Reform Is Overlooked
The inattention to malpractice reform has 2 effects: It fails to lessen the number of lawsuits brought against doctors by plaintiffs looking for a quick jackpot. It also neglects to address the very real issue of defensive medicine, which doctors say jacks up the costs of healthcare.
"If a doctor has ever gone to court, he's going to do anything to never have to go back again," says Ahlborn. "Physicians order hundreds of exams every year just to document conditions that don't exist. Even if they know that the chance of something being there might be 1 in 10,000, they will still order. In this legislation, they did not even toss a little bone to discuss tort reform."
Adds Bauman, "I know that every doctor who is a good doctor practices defensive medicine. So I'm disappointed that tort reform will not be a part of the healthcare reform bill. I think that will make doctors less willing to embrace those newly insured patients."
Continued Chaos With Payment Rates
Notably absent was any mention of fixes to the Sustainable Growth Rate (SGR), which determines physician reimbursement. Medicare reimbursements cuts -- whether or not made at the full 21.2% as proposed -- would be disastrous.
"The biggest issue on the physician's horizon right this minute is the proposed 21.2% Medicare pay cuts," says Ahlborn. "If those cuts were to occur, it would be devastating to primary care, particularly internists, who run on such small margins. Everyone knows that. My understanding is that it can't happen."
Even with that tax, however, private and government insurers are taking in too little to fund healthcare benefits," says Ahlborn. "Part of the budget reconciliation scoring included the 21% cut in physician fees. That's why it could be budget-neutral. However, such a cut would shake the foundation of the system and the consequences would be significant."
A natural place for the government to try to make up the difference is through cuts to doctors' reimbursement, says Ahlborn.
Prevention and Wellness
Many politicians have said that keeping patients healthy through prevention education will be important as far as keeping healthcare costs low.
Where's the beef?
The legislation contains no financial incentives directed at patients to encourage them to lower their cholesterol, quit smoking, lose weight, or in other ways to take responsibility for their health. At the moment, responsibility rests with public education programs and with physicians who are supposed to motivate patients. The patient has little financial incentive to be a collaborator.
"It will be interesting to see what plays out," says Ahlborn.
Authors and Disclosures
Author(s)
Leslie Kane, MAC
Editorial Director, Medscape Business of Medicine
Disclosure: Leslie Kane, MAC, has disclosed no relevant financial relationships.
A Timely Quote from a Founding Father
"God forbid we should ever be twenty years without such a rebellion.The people cannot be all, and always, well informed. The part which is wrong will be discontented, in proportion to the importance of the facts they misconceive. If they remain quiet under such misconceptions, it is lethargy, the forerunner of death to... the public liberty. ...
And what country can preserve its liberties, if its rulers are not warned from time to time, that this people preserve the spirit of resistance? Let them take arms. The remedy is to set them right as to the facts, pardon and pacify them. What signify a few lives lost
in a century or two? The tree of liberty must be refreshed from time to time, with the blood of patriots and tyrants. It is its natural manure."
~ Thomas Jefferson
Republicans Easing Away From Call To Repeal Healthcare Reform Law.
Republicans Easing Away From Call To Repeal Healthcare Reform Law.
The AP (4/1, Babington, Elliott) reports that top Republicans "are starting to worry about their healthcare rallying cry 'Repeal the bill,'" which "just might singe GOP candidates in November's elections, they fear, if voters begin to see benefits from the new law." Democrats, "hoping the GOP is indeed positioning itself too far to the right for the elections, are taking note of every Republican who pledges to fight for repeal." While "such a pledge might work well in conservative-dominated Republican primaries, they say...it could backfire in the fall when more moderate voters turn out." The AP notes that GOP Senate candidate Mark Kirk of Illinois has "eased back from his earlier, adamant repeal-the-law stance," and the US Chamber of Commerce, "which fiercely opposed President Barack Obama's health legislation, now urges opponents to pursue a 'more effective approach' of trying to 'minimize its harmful impacts.'"
The AP (4/1, Babington, Elliott) reports that top Republicans "are starting to worry about their healthcare rallying cry 'Repeal the bill,'" which "just might singe GOP candidates in November's elections, they fear, if voters begin to see benefits from the new law." Democrats, "hoping the GOP is indeed positioning itself too far to the right for the elections, are taking note of every Republican who pledges to fight for repeal." While "such a pledge might work well in conservative-dominated Republican primaries, they say...it could backfire in the fall when more moderate voters turn out." The AP notes that GOP Senate candidate Mark Kirk of Illinois has "eased back from his earlier, adamant repeal-the-law stance," and the US Chamber of Commerce, "which fiercely opposed President Barack Obama's health legislation, now urges opponents to pursue a 'more effective approach' of trying to 'minimize its harmful impacts.'"
Would the Founders Love ObamaCare?
The resistance to ObamaCare is about a lot more than the 10th Amendment.
• By DANIEL HENNINGER
The left-wing critics are right: The rage is not about health care. They are also right that similar complaints about big government were heard during the New Deal and the Great Society, and the sky didn't fall.
But what if this time the sky is falling—on them.
What if after more than a century of growth in the national government, starting with the Progressive Era, the American people are starting to push back. Not just the tea partiers or the 13 state attorneys general seeking protection under the 10th Amendment and the Commerce Clause. But something bigger than that.
The Democratic left, its pundits and academics criticizing the legal challenges to ObamaCare seem to be arguing that their version of our political structure is too big to change.
That's not true. The American people can and do change the nation's collective mind on the ordering of our political system. The civil rights years of the 1960s is the most well-known modern example. (The idea that resistance to Mr. Obama's health plan is rooted in racist resentment of equal rights is beyond the pale, even by current standards of political punditry.)
Powerful political forces suddenly seem to be in motion across the U.S. What they have in common is anxiety over what government has become in the first decade of the 21st century.
The tea party movement is getting the most attention because it is the most vulnerable to the standard tool kit of mockery and ridicule. It is more difficult to mock the legitimacy of Scott Brown's overthrow of the Kennedy legacy, the election results in Virginia and New Jersey, an economic discomfort that is both generalized and specific to the disintegration of state and federal fiscs, and indeed the array of state attorneys general who filed a constitutional complaint against the new health-care law. What's going on may be getting past the reach of mere mockery.
Constitutional professors quoted in the press and across the Web explain that much about the federal government's modern authority is "settled" law. Even so, many of these legal commentators are quite close to arguing that the national government's economic and political powers are now limitless and unfettered. I wonder if Justice Kennedy believes that.
Or as David Kopel asked on the Volokh Conspiracy blog: "Is the tax power infinite?"
In a country that holds elections, that question is both legal and political. The political issue rumbling toward both the Supreme Court and the electorate is whether Washington's size and power has finally grown beyond the comfort zone of the American people. That is what lies beneath the chatter about federalism and the 10th Amendment.
Liberals will argue that government today is doing good. But government now is also unprecedentedly large and unprecedentedly expensive. Even if every challenge to ObamaCare loses in court, these anxieties will last and keep coming back to the same question: Does the Democratic left think the national government's powers are infinite?
No one in the Obama White House, asked that in public on Sunday morning, would simply say yes, no matter that the evidence of this government's actions the past year indicate they do. In his "Today Show" interview this week, Mr. Obama with his characteristic empathy acknowledged there are "folks who have legitimate concerns . . . that the federal government may be taking on too much."
My reading of the American public is that they have moved past "concerns." Somewhere inside the programmatic details of ObamaCare and the methods that the president, Speaker Pelosi and Sen. Reid used to pass it, something went terribly wrong. Just as something has gone terribly wrong inside the governments of states like California, New York, New Jersey, Michigan and Massachusetts.
The 10th Amendment tumult does not mean anyone is going to secede. It doesn't mean "nullification" is coming back. We are not going to refight the Civil War or the Voting Rights Act. Richard Russell isn't rising from his Georgia grave.
It means that the current edition of the Democratic Party has disconnected itself from the average American's sense of political modesty. The party's members and theorists now defend expanding government authority with the same arrogance that brought Progressive Era reforms down upon untethered industrial interests.
In such times, this country has an honored tradition of changing direction. That time may be arriving.
Faced with corporate writedowns in response to the reality of Congress's new health plan, an apoplectic Congressman Henry Waxman commanded his economic vassals to appear before him in Washington.
Faced with a challenge to his vision last week, President Obama laughingly replied to these people: "Go for it."
They will.
As to the condescension and sniffing left-wing elitism this opposition seems to bring forth from Manhattan media castles, one must say it does recall another, earlier ancient regime.
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