Friday, November 30, 2012

A Huge Pay Cut For Doctors Is Hiding In The Fiscal Cliff

NPR reports:
Included in the fiscal cliff is a 30 percent pay cut to doctors who treat Medicare patients. It's set to kick in on Jan. 1. Lawmakers from both parties say they want to prevent the cut. But the cut is part of a plan Congress put in place 15 years ago to contain healthcare costs, then proceeded to postpone again and again...back in 1997, Congress said that if doctors' bills per patient increase beyond a certain rate, then Medicare would start paying a little less for each bill. There's a whole formula to figure it out. In 2002, the formula said fees for each procedure should be cut by 4 percent.
And then, the next year, 2003, same thing: The formula said cut doctor fees another 4 percent. People in Congress got very nervous about how their senior citizen constituents would react. 
So instead, Congress passed a bill to ignore the formula that year. Instead, they raised doctors' fees. And then for the next year. And the next...The formula is cumulative. So if you ignore a 4 percent cut two years in a row, the following year the formula will call for an 8 percent cut. And so on. The formula now says doctors' pay should be cut by 30 percent next year...Congress is very likely override the formula once again, and prevent doctors' pay from being cut next year. But Congress is much less likely to get rid of the formula altogether.
That's partly because projections of the long-term budget deficit assume that the formula will kick in eventually, and the federal government will spend less money paying doctors. Those projections — clearly based on a fiction — make the long-term deficit picture look brighter than it really is.
As NPR says, Congress is likely to override the formula, but doctors have a target on their back, at some point it isn't going to pay for many doctors to treat medicare patients, at that point medical socialism will shift into high gear and justification will be made to force all physicians to handle medicare patients. Many will quit and at that point, we will all be sitting in long lines waiting to visit doctors with attitudes.

Stay healthy, my friends.


  1. If its true, then good. The AMA and the doctor protection racket has been using the government sword to artificially inflate their compensation for decades now. Live by the sword.....

    1. No, not good. There are lots of doctors who are already cheated big time by medicare. (whether you agree with them or not, they already feel cheated) They do not get paid inflated prices, but already heavily deflated prices from medicare. This causes inflated prices for everyone else because they are going to make up the difference somewhere. What this means is there will be more doctors that decide not to take medicare patients and more that will retire. Have fun finding a doctor if you are on medicare. Hope you don't die before it's your turn. Don't know what you are talking about with the "doctor protection racket" but the bottom line is doctors do not make nearly as good of a living as they did in the free market, taking care of people whether they could pay or not.

    2. Doctor protection racket involves the garbage involved in licensing of medical schools / physicians / prescription writing / etc. Get the government out and there would be 2x as many medical schools and 5x as many physicians as we currently have. Having prescription drugs at all is ridiculous, but limiting the writing of prescriptions to physicians, and not to pharmacists (who know more about the drugs themselves than physicians) and phd scientists (who know more about everything than physicians) is absurd.

      Physicians should NEVER have accepted medicare in the first place, and they would not be in this mess. You must not have read the article since it points out that when all physicians refuse to accept medicare patients they will be required to by law. I have many physician acquaintances, many are liberal politically yet routinely bitch about Obama care. I always tell them the same thing.

      1.) they brought this on themselves and
      2.) they could end obamacare in a week if they organized a nationwide physicians strike.

      People would die if they did this, and the physicians refuse to find this acceptable. They can't recognize that is the price they will have to pay if they want to fix a piece of the broken system.

    3. DT

      The fact that you mentioned "The Free Market" shows how little you know. There has been no "free market" in health care for 50 years. If you want a free market in medicine go to Costa Rica, or Singapore.

  2. Actually it is even worse. The US has been fortunate to attract foreign doctors from all over the world given it's high salaries. 1/3 of us physicians are foreign trained. Now far fewer will come and many of those already here will soon figure its best to collect their savings and head home to retire in style in India, Pakistan, etc.

  3. What a disaster. It would be good (I should take this advice) to develop a good relationship with a doctor you like and gift him something he/she would appreciate a couple times per year. Family practitioners are definitely not rich, especially the younger ones. A nice bottle of red and white might go a long way.

    I have never paid into a health savings account, and I have no idea how much control an individual has over that it. Seems to me that untaxed income is one of the best ways to pay for visits, tests, etc. I'm unaware if Obamacare eliminates this type of account. It makes sense to me to do the best you can to use insurance as it has always been defined: for a catastrophic illness.

    So many in medicine must be unaware of the history of that profession, especially from an economic standpoint. I'd love to slip my doctor (who I haven't seen in two years--knock on wood) some Rothbard material on the AMA and Abraham Flexner. The Rockefellers sure helped fascism roll in this country.

  4. Having a "pay cut formula" for physicians is just another annuity for Congressmen. Every year the formula is supposed to kick in and then delayed for another year. This requires lobbyists and PACs working for physician and senior groups to "donate" money to Congressmen to get an audience to describe again the disaster for seniors and physicians. There is absolutely no incentive on Congress to fix this yearly charade. They build the PAC money in to their re-election budget!

  5. Just wanted to add that if the government wasn't involved at all, physician compensation would be far less of an issue because their costs of complying with government and insurance regulations would be far lower, or nonexistent in many instances.

    So many could choose not to join a large group, and operate with a much leaner staff that actually had time to practice medicine, and less on the business of medicine. What a gift it would have been to watch Ron Paul practice. I would have loved to deliver babies for a living, but it wasn't in the cards. I wouldn't want to do it today. Thanks Amerika.

  6. Doctors work around the restriction by scheduling the patients to come in more often and just spend a couple of minutes with them, but charge for all kinds of procedures. The patient doesn't know what all of the numbers on the bill mean (code numbers for treatment, that is) so won't dispute them, particularly if it doesn't cost the patient anything.