Friday, April 16, 2010

The Myth of the "Richdoctor"

No, not the witchdoctor, the richdoctor. And what, pray tell, is this "richdoctor" of which you speak? Well, let's let guest-blogger and Medical Office Manager Kelley Beloff explain:

Arizona Doctor says Obamacare will force him to close shop

That is the headline of the article sent to me by a colleague. Is this true? Will physicians stop practicing if Obamacare goes into effect? YES. Physicians have been saying for years that there is too much government regulation and the pay is simply too low. They are simply tired of the intrusion by the government. But there is more to the story:

Scherzer said he hasn’t been fined but he was audited by the Centers for Medicare and Medicaid Services several years ago and spent months awaiting their findings.”

This statement refers to the RAC, the Recovery Audit Commission, which are hired mercenaries that go into physicians’ offices looking for Medicare Fraud and have unrestricted power to fine any physician they find who has committed fraud, whether knowingly and unknowingly. The fines are extensive and have bankrupted physicians since the implementation. The “auditors” are paid a commission based on the amount of fraud found, thus the investigations almost always find fraud. This physician was very lucky that he survived the RAC: most do not.

He also takes issue with the Democrats’ argument that much of the waste in the health-care system is driven by a profit motive on the part of physicians.”

Ah, the richdoctor syndrome. Notice "richdoctor" is one word. This is a myth built around wealth envy. It is this attitude that was behind the founding of the RAC (is it a coincidence that this was a favorite form of torture during the inquisition? Just saying). Anyway, back to those pesky richdoctors. I recently received a report stating that the average reimbursement of the average office visit code (99213) for physicians is $65.49. Yep, $65.49. That is all your physician gets for seeing you in a normal 15 minute appointment. This is the average, so some insurances pay less; Medicare is one that pays less. Medicare reimburses $63.74. But Kelley, you will say, that is $254.96 an hour, which is a lot of money to make in an hour. You’re right, but let’s look at a few factors:


1) Government has mandated that all physicians implement an Electronic Medical Records system by 2014 or face punishments. An average EMR costs $100,000 for installation and the first physician. Any additional provider costs between $30,000 and 50,000. That is the initial payment, there are yearly payments to update the software and keep it functioning.

2) Government has mandated that all physicians must have on staff a certified coder by 2012 or face punishment. The average annual salary for a certified coder ranges from $50,000 to $75,000. Once the mandate goes into effect, that figure will raise.

3) Any efficient medical office needs three staff members to every provider. Do the math for your physician. The average salary of medical staff is $30,000 (including benefits).

4) Patients enjoy a clean office with lights, restrooms, heat and air conditioning, exam tables, sanitary equipment, new needles, chairs in the waiting room, telephones, fax machines, computers. These aren’t free (to the provider).

5) Patients expect the medical office staff to bill their insurance companies, deal with any problems, see them promptly when they are sick, fill out their paperwork, and generally manage their healthcare, all without any cost to them.

Thus, all of the overhead expenses are paid by that $65.49. When this physician started practicing, the ratio of overhead to physician’s salary was 20:80. Today that ratio is reversed. Overhead in any medical office accounts for 80%. The physician, if he is lucky, gets 20%. So for math, 20% of $65.49 is $13.10, which is $52.40 an hour. This physician went to medical school for 4 years, internship, and residency for $52.40 an hour. And when Obamacare goes into effect the reimbursement rates will be LOWERED. Why would any sane person want to go into medicine?

It’s interesting how every time someone has concerns or opposed the bill you hear the Democratic party call the individual or group liars. It’s almost the mantra,” Scherzer said. “They’re providing disincentives to care that are making the practice of medicine repugnant.”

This point almost goes far enough: I would say IT IS THE MANTRA. The political environment has made it almost impossible to practice medicine. The government has put a wedge between patients and physicians and that wedge is MONEY. Patients today believe that they should not have to pay their medical bill, not their deductible, not their co pay, not their co-insurance, not their out-of-pocket expenses. NOTHING, NADA, NONE. My staff is harassed on a daily basis by patients who fight their bill with every ounce of their being; because the government is telling them that their health care is a RIGHT and these are just greedy richdoctors (see above). More and more practices, mine included, are putting anti-abuse clauses in their contracts with patients. That is, if a patient is verbally abusive with staff that is grounds for dismissal.

There is a physician shortage currently,
and it will get worse. Physicians will retire rather than adhere to government take-over. What good will the “right to healthcare” be then, when there are no physicians willing to treat you?

Thanks, Kelley, for your insights and analysis. You’ve given us all a lot to think about.

[Hat Tip: Hot Air]
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