Docs bailing from Medicare

When the next round of Medicare cuts hit doctors in a couple of months, experts say, many US doctors will simply not be able to afford seeing Medicare patients anymore.

The Feds who oversee Medicare policy have understood for years that the amount they reimburse doctors for seeing Medicare patients not only fails to actually pay them for their services, but also fails to cover the doctors' actual costs of providing that care.  They have relied on physicians' ability to "cost shift" to cover their losses, and permit them to continue caring for Medicare patients.  This year, however, cost shifting might not be available to cover the shortfall.  Many doctors - especially those in small or solo practices - are expected to have little choice but to stop seeing Medicare patients, or at least stop accepting new Medicare patients. 

DrRich comments

"Cost shifting" is the when doctors squeeze private insurers for higher reimbursement levels in order to cover the losses they have sustained with cuts in Medicare reimbursements.  Private insurers hate the cost shifting practice, but when dealing with large physician groups that are very popular with their enrollees, they often have no choice but to accede to the doctors' demands.  This, of course, is one of many factors driving up the cost of health insurance premiums, and thus is helping to create greater numbers of uninsured Americans. 

With the scheduled 4 - 5% reduction in Medicare reimbursement, private insurers (whose bottom line is becoming ever more threatened, and who have already had to raise premiums at a double-digit rate) are expected to just say no to cost shifting this year - especially with the smaller physician groups that have relatively little leverage. The affected doctors, faced with growing overhead of their own (such as exploding malpractice insurance premiums and the need to find a way to comply with oppressive new federal regulations) will simply not be able to both stay in practice and care for Medicare patients who cost them dollars the minute they walk in the door.  More and more docs will be moving to "nonparticipating" status with regard to Medicare, leaving more and more Medicare patients with insurance coverage, but nowhere to take it.

The overall scheme being followed by the Feds in this regard, of course, fits nicely with DrRich's Grand Unification Theory of Health Care, in that the Feds (consciously or unconsciously) continue taking actions that will ultimately drive the big private insurers - and even the doctors -  into their arms, crying "No mas!"  Already it has become feasible for politicians seeking office (at least those who would seem to have little to lose by being a bit "out there," such as Al Gore) to begin calling for single-payer universal health coverage.  The refusal of the evil doctors to open their doors to the elderly sick will make us even more ready to forget how awful we thought Hillary's plan was 10 years ago.

December, 2002

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