Skip to comments.A doctor's perpective of Obamacare - Healthcare delivery bankruptcy Please read
Posted on 03/20/2010 12:33:54 AM PDT by schwingdoc
I have been a doctor for 19 years. 4 years in the Army and 15 years in private practice. I belong to a doctor owned group of approx 350 doctors in a multi-specialty practice. We employ 4000 people. In addition to being touted as one of the very best clinics in the nation (Acclaim Award winners) we have donated over a million dollars to the local city in grants, scholarships and charity. Regularly voted as top places to work by our employees. US healthcare at its very best. I am very proud of what we do and we provide tremendous care and value to our patients.
We seek to maintain a 3-5% profit margin annually. We operate in the very precarious business model of enormous volume, low margin. As any business owner knows, this is high-risk-low-margin of error model. Consequently any small changes to cash flow vectors, mandates widespread internal policy and practice corrections. Tiny changes = massive consequences.
As many people may know, Medicare and Medicaid, the current government paid 'insurer' - pays approximately 70% of the cost of care. ie its more expensive for doctors to care for these patients than we get reimbursed for. Say you are a contractor. Imagine the government mandating a significant number of your jobs whereby your out of pocket costs are ~ 30% + greater than your income. That is Medicare and Medicaid. In perspective, our group alone, year 2008 lost ~$12 million caring for our government patients. This is despite taking over 1 1/2 years to help move our fee-for-service traditional Medicare patients over to Medicare Advantage plans, which are privatized versions of Medicare that reimburse better...still not covering costs...but lessen our losses significantly.
Many people ask, why do private health insurance premiums continue to escalate? The liberals want you to believe its a combination of profiteering and waste. When in fact its due mainly to two other processes. The first is obvious: every year it costs more to care for patients and premiums are trying to keep up with this rising cost. But secondly, and less often discussed, is that every year private delivery systems lose more and more money caring for our government patients. Someone has to make up for these losses in order for your hospitals, clinics, nursing homes, pharmacies, group practices to remain solvent and profitable. Every year these delivery systems open their books to the private healthcare insurers - and the insurers must - they must in order for the entire system at large to stay functional, increase the amount they pay out to cover these losses. If they dont, both the delivery systems and the insurers die. So to keep the boat afloat, the payouts by private insurers MUST increase to subsidize the ever increasing losses doctors incur by taking care of our government patients. So, in a way, you could say that your increasing premiums are a tax that you are paying to cover the losses that are Medicare and Medicaid. It's a clear and inarguable private subsidation of government cost. Enough said on that.
So to really feel the consequence and full impact of Obamacare, one must simply see the economic dominos. Most people can see how this bill will rapidly reduce private insurance plans and rapidly expand government plan patients. And take whatever number that is being reported, and multiply that by 3. That has been the experience in both Mass and Hawaii. Both government plans were overwhelmed with the enrollees as they significantly underestimated the government migration.
Ok, so now- how can anyone not see the obvious outcome? Government patients = significant loss of profitability. Initally the private insurers will do their best to continue to subsidize this loss, and there will be a huge escalation of premiums. But within a few months this will be unsustainable. Its a cycle that cannot be stopped. Higher premiums = higher recidivism to governmnet plans = higher premiums etc. Within months, every single hospital, every single doctor office, clinic, nursing home, pharmacy - every delivery system reliant on private insurers will no longer be profitable. ie they will go bankrupt. These will most certainly be the headlines to come: Hospital XYZ shockingly announces bankruptcy; Hospitals can no longer remain open; Clinics across the country file for bankruptcy; Loss of Pharmacy access shocks the Nation; Doctors going bankrupt en masse creating healthcare delivery and access to care crises; Where can you go to get care?; Loss of access reported Nationwide
Yes a crises. A crises of access due to widespread business failure. You will not be able to get care for as long as it takes for the government to devise their emergency bailout package and as long as it takes for those insufficient dollars to try and get those doors back open again. But it will be too late, and it will be too expensive. There is absolutely no way that our government can capitalize our entire healthcare system. Try as they might, only a percentage of what we have now will ultimately survive. And those that do survive will be a shell of what they once were. The conditions will be frightening, and the consequnces will be dire. The degree of disarray will be unimaginable and the underlap in access to care will be gaping.
I will not expand this discussion to predict what this means to our economy at large because I am not an economist. But anyone can be close to predicting what I am suggesting. Factors such as loss of work hours due to illnesses not treated, pressure on all the other private business models; let alone the out and out loss of enourmous capital via the bankruptcy of this entire healthcare industry can clearly be the death nail to our country and imo is a clear and present threat to our very sovereignty. This can make the housing collapse look like a speed bump. This will be massive and rapid and lethal and complete.
I am not certain why this very obvious outcome has not been openly discussed momre often - ie the rapid and massive bankruptcy of all of your health care providers and their delivery systems. But this is the inevitable outcome should this bill ever become law and inplemented.
Thanks for reading. Please ping, copy and email your friends and try and get this word out. I know it's a very late hour - but I do think the implementation is not an inevitability as multiple lawsuits may keep it on hold for a while - so public opinion will still be vital for many more months to come.
Unbelievable times. Please do your part and email and make the phone calls. This plea comes an honest and heartfelt love of our country and its citizens, and an honest and heartfelt love of my profession, avocation and the welfare of my patients.
Makes very valid and extremely scary points. Is this the crisis?
Bump for later reading and posting elsewhere...
When people realize that we have been subjected to one after another manufactured crisis they ARE NOT going to be very happy at all!
Excellent, my brother. Says it all. Wish I wrote it.
Your analysis is as cogent, as predictive, as anything I have read these several months. And I have gone back to read your previous posts. In a word, thank you, Doc, for all that you bring to this national discussion. I will send your post wherever I can.
Not this time.
This govt takover of so much of the US economy (artificial, unsustainable ecomomy) should finally topple our country into martial law and a police state. No elections, massive layoffs of govt workers that maintain the public infrastructure, empty professional and commercial real estate, empty homes as we move into cheap apartments and tents, no proper refuse handlling, widespread preventable illness, then desease...Well done, socialists.
Funny thing is, most of the voters that put these representatives that are trying to execute this govt takover into office are not really evil, just incredibly igonorant.
Some of us were warning of the dire consequences of government involvement in healthcare via the case of Terri Schiavo.
Perhaps you remember her government court ordered “murder/execution” via forced starvation and dehydration?
If anyone but “the government” did that to a death row inmate, a POW, or a stray dog or cat, they would have been charged with any number of “inhumane” anti-cruelety laws.
Lots of us folks with no monetary interest, fought hard to save her, and we lost.
I see you logged on here well after her death.
Just curious...what was your stand in her case?
Obviously you don't have to answer me.
Hopefully you will start thinking about it.
Her palliative health care expenses was supposed to have been “fully paid for” in advance, yet our entire health provider industry seemed almost to be frothing at the mouth,in thirsting for her death.
Pardon me if I have judged you as just some idiot, who only now that your own personal income is at risk, partially understands what is at stake with even more government control of healthcare.
“So to keep the boat afloat, the payouts by private insurers MUST increase to subsidize the ever increasing losses doctors incur by taking care of our government patients.”
About 15 years ago I had some surgery. I exclaimed to the Doc on how expensive it was. I guess this would have been right around the time of “Hillary Care”.
He told me “the U.S. already has socialized medicine”. Then went on to say the things in your post. I forget the actual numbers, but he said my minor surgery, which cost me (and my Insurance company) about $4,000 - was really worth about $2,000.
Just imagine what it will be after Obamacare. Except the doctors won’t get paid more. So why bother. Luckily the government will be there to solve the crisis. Probably using the General Motors plan.
I’ve tweeted it out — begging people to read it. Thank you. I completely agree with your assessment. I have such respect for doctors still working in the current environment, and you do not deserve a dramatic DOWNTURN in remuneration: you deserve an UPTURN, where the good docs can be plenty rewarded, and the not-so-good are left out. We need more of the real market in health care. More paying directly.
We are governed by economic morons.
Until that changes, not much else will.
I just have to ask you to explain one sentence that underscores your entire argument here:
“Most people can see how this bill will rapidly reduce private insurance plans and rapidly expand government plan patients.”
How exactly do the current house and senate bills do this?
The current and future uninsured will be purchasing private insurance via exchanges and these premiums will be subsidized by our tax dollars...but it is still private insurance (which will be expanded). There is no public option or new government run insurance plan. Yes, Medicaid will be expanded to cover those at 133% of the poverty line but that isn’t a very big percentage of the uninsured. Those poorer are already on Medicaid.
Mandating the uninsured to purchase private insurance with subsidies will actually expand greatly the private insurance market by forcing millions of new customers to into the private insurance market and increase the risk pool as a whole and therefore strengthen private insurance from a financial standpoint.
Yes, those making over $250,000 will take it in the gut with a .9% increase in their medicare tax on their paychecks and investments under either of the bills considered but I don’t quite see how “government patients” will increase as a result of this plan.
Government patients WILL increase due to a vast increase in Medicare patients (baby boomers) about to hit the government dole and/or a further increase in unemployment due to national and global economic conditions which results in more Medicaid patients. But neither of those scenarios have anything to do with the bills being considered by either the house or senate....at least directly.
Is there a new government insurance plan that I am not aware of in the bills?
The system runs on such narrow margins that even a 5% increase in Medicaid will be rapidly fatal.
And even before that, any responsible insurance company board will shut down their about to be company-destroying health insurance subsidiary.
These shell "health insurers" won't last 60 days.
“The system runs on such narrow margins that even a 5% increase in Medicaid will be rapidly fatal.”
Physicians and medical groups can reject medicare patients can they not? Also, to what economic data are you referring to conclude that a 5% increase in Medicaid patients would be rapidly fatal? We have had bigger jumps than that in the recent past without practice fatalities.
I am not saying that this isn’t a backdoor to single payer healthcare or “medicare for all” by crashing the private industry, which I actually think Obama wants to do, I am just trying to figure out how he’s gonna do it.
There will certainly be new regulations in place such as no lifetime caps on insurance and no denial of pre-existing conditions but I am still trying to understand how these bills are going to hurt the private insurance market by forcing 30 million new customers to buy from them.