Physician reimbursement is often at the heart of healthcare policy debates, yet key perspectives remain overlooked.
Six physicians joined Becker’s to discuss what they believe is missing in conversations about physician reimbursements.
Editor’s note: Responses have been lightly edited for clarity and length.
Quentin Durward, MD. Neurosurgeon at the Center for Neurosciences, Orthopaedics, & Spine (Dakota Dunes, S.D.): What is the highest overhead percentage on practice earnings before a doctor will accept defeat and bail on his/her practice and accept an employment model? As a corollary to that question, what is the minimum amount of time off — for vacation and study leave — that’s acceptable to keep your production up and make a reasonable living.
Michael Gross, MD. Orthopedic Surgeon at Union Middlesex Orthopedics (Wayne, N.J.): Particularly in independent practices, rising costs, including administrative, staffing, equipment, EHR, employee health insurance and malpractice insurance [overpower] the decrease in reimbursements. Even if reimbursements remain level, the margins continued to decrease, and physician reimbursement is even lower than it appears.
Harry Haus, MD. Medical Director of Dr. Haus & Associates (Erie, Pa.): Few people know that physician reimbursement is a small part of healthcare costs. For example, a physician brought his father to the U.S. for eye surgery. The surgeon performed the procedure free of charge, but the outpatient surgery center bill was $9,000. The physician then told me, “Even if doctors received no pay, the U.S. healthcare system would still be the most expensive in the world.”
Another example is the cost of medication. Seven years ago, I had a patient with hepatitis C. Harvoni cost $1,000 a day for 12 weeks — a total of $90,000. That same patient bought a 12-week supply of Harvoni from India for $3,000, and his hepatitis C was resolved.
Lastly, large hospital systems and insurance companies make care more expensive. Physician payments must cover not only the care itself but also a CEO making millions, a COO, a VP of human resources — just to name a few — and these systems often operate in high-rent locations. My overhead is 27%. UPMC once said they wanted to buy my practice but admitted they couldn’t maintain that low of an overhead — it would double under their management. Last year, around the same time UPMC laid off 1,000 employees, they bought a jet for the CEO to use to fly to Florida.
Medicare hasn’t kept up with inflation, but the money intended for doctor visits is increasingly absorbed by the massive overhead created by giant hospital and insurance companies. And I haven’t even mentioned the millions paid to CEOs of for-profit hospital systems like Steward
Jack Jensen, MD. Orthopedic Surgeon at Athletic Orthopedics & Knee Center (Houston): There is a wide range of reimbursement for the same code and a wide range of timely payment
Udaya Padakandla, MD. Immediate Past President of the Texas Society of Anesthesiologists (Austin): There are two important elements missing in the conversation about physician reimbursements:
- Patient access to healthcare is either significantly underemphasized or altogether neglected in conversations regarding physician reimbursements. When physicians advocate for preserving the ever-decreasing reimbursements with either the insurance carriers or CMS, they refer to the fact that the ever-decreasing reimbursement will finally break the camel’s back and drive the physicians away from practices altogether. The physicians will either close down their practice, or sell their practice to a corporation, or move the practice to a different location. Under all these circumstances the patients in a given location lose their access to their long established and preferred physician networks.
- Network adequacy is another aspect of patient health care that is talked about very little. Insurance carriers have created the concept of networks. And by artificially contracting and de-contracting with select groups of physicians or physician groups, in order to control their revenue flow, these insurers artificially manipulate the networks available in the given communities. “Ultra-narrow” networks is now a buzzword with carriers these days. Patients might have very good physicians in their neighborhoods or within driving distances but maybe unable to reach them because of their insurance carriers’ network issue shenanigans.
Vijay Sudheendra, MD. President of Narragansett Bay Anesthesia (Providence, R.I.): The financial pressures from inadequate reimbursement rates disproportionately affect independent physician practices. This has led to increased consolidation in healthcare, with private equity firms and healthcare systems acquiring more practices. Such trends may limit patient choice and reduce the availability of community-based care.
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