21 June 2006

Single Payor -- what might it mean for physicians?

Jim2 asked, in regard to the preceding post:

What does this mean for government sponsored single payer health care system? Right now, we pay less for the medicine provided to the needing than for the medicine provided to the fortunate. [...] If the government path is not getting enough money to doctors now, is there any hope that the government path would get enough money to doctors if it assumed the primary path now provided by private insurance companies?

First, some simple facts, for perspective:
Medical professional fees are determined by the RVU (Relative Value Unit, a somewhat arbitrary but useful index of physician work). For 2006, Medicare pays $39.90 per RVU. Medicaid pays rather less, on the order of $22 (may vary state to state; rough estimate). Uninsured patients in the ED, of course usually pay nothing, but in the aggregate maybe average $5/RVU. Commercial insurers may pay anywhere from $50-$100/RVU, depending on local markets, regulations, contracts, etc. Depending on its unique mix of payors and contracts, an average ER physician may collect, on average, $30-$50/RVU.

So, Jim, you are completely right, that the governmental payors are on the low end of the reimbursement scale. I would contend that they are grossly underfunded, Medicaid in particular. Medicare itself is so poorly funded that most doctors limit the number of Medicare patients in their practice, and many are no longer taking new Medicare patients. Many physicians actually lose money on an office visit for a Medicaid patient (not so much in the ER, as our overhead is lower).

The most common proposal I have heard for government-funded single payor health care is something along the lines of "Medicare for all." The clear implication from this, for physicians, is that all patients would be reimbursed at the same rate. While you would think this is a good thing, I expect that many doctors would fight it tooth and nail. For a ED group that is well-managed and has a good payor mix, they would face a potential 20% loss in gross revenue (an even larger loss of personal income). Most every group above the median would probably come off worse. Many inner-city groups with poor payor mixes would see an improvement in their incomes, but many of these groups already have governmental subsidies (i.e. for teaching resident physicians).

I think, on balance, the average ER group would come out ahead. There would be some decreased overhead - collections and contracting would be a lot simpler - and the problem of the uninsured would go away. But appprehensive of the possibility of losing income, I suspect that many if not most doctors would oppose. Worse, doctors have been living under the threat of cuts in medicare reimbursement for years, and have only managed to keep up (if at all) by cost-shifting to insured patients. A completely government-funded system would put physicians entirely at the mercy of the annual budgeting process, a prospect that instills terror into the hearts of all doctors. And I should add that I speak only as an ER doctor -- I honestly know little about how such a system would impact primary care physicians or other specialists.

I would probably support a system like this, but not out of self-interest, rather from the perspective of one who is outraged that the richest country in the world cannot provide even basic services to 20% of its citizens. As a physician, I think I might be viewed as something of a class traitor, supporting a plan inimical to the interests of working docs everywhere. I don't know.

Of course, it's all hypothetical, since no serious politician I am aware of is actually proposing such a plan, and were one on the table, the details would be critical to whether it would succeed or fail. And I have heard many other variations on the theme, which might invite more acceptance from physicians. Maybe once we take back Congress in November we might have something to talk about.

But I kind of doubt it.

1 comment:

  1. While I agree with your belief that a single payor system is desirable not only from the point of view of increasing access to the underinsured, but also might help stem the enormous costs of healthcare administration. Consequently, the efficient well run practice that you are assuming may oppose single payor healthcare on the basis of decreasing their revenue by 20% I don't believe takes into account the fact that the medical billing, collections and miscellaneous staff currently used for prior-authorizations, pre-certifications and other time wasting make-work could in all liklihood be reduced, more than making up for the drop in revenue. Just think what percentage of the healthcare dollar today goes to insurance companies, pharmacy precertification agencies, not to mention, health insurance company profits, CEO compensation and backdated stock options, not to mention the cost to our medical practices of having to hire more and more clever people just to deal with the bureaucratic obstacles they put before us. Are any of the insurance companies really necessary? They perform no useful function to society other than to siphon off money from the delivery of healthcare itself. Like all other forms of commercial insurance, the healthcare industry has been in essence a legalized protection racket.

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