Consequences, intended and otherwise.
The recent negotiations between Labor and the White House have compelled me to write. It is becoming increasingly clear to me that the so-called health care reform package will have many consequences that may not have been anticipated by the President, nor by Congress.
In November, the Congressional Budget Office reported that the reform package will likely cause an increase of 10-12% increase in premiums for those with non-group coverage. Ostensibly, this increase is caused by “Guaranteed issue” (providing coverage for those who were previously “uninsurable” or those with pre-existing conditions), mandated benefits, and community rating. Now we learn that those with so-called “Cadillac” insurance plans will pay a further 40% excise tax on their premiums, which will be increasing. The recent negotiations define these plans as those costing $8,900 or more for individuals, and $24,000 or more for family coverage. While these thresholds are above the reported averages for my state and others, they are by no means uncommon. I would assert that most physicians buy such plans for themselves and their office staff. Paying a 40% excise tax on premiums that will be increasing by virtue of the passage of this bill is adding insult to injury.
Inasmuch as the increase in premiums, and therefore an increase in the excise tax will fall on physicians and physician practices, physicians have a vested interest in helping to keep the premiums down. Physicians can certainly have little impact on the cost of mandated benefits and community rating. Physicians can, however, have an impact on the cost of providing care to those with pre-existing and chronic conditions, which heretofore may have rendered these people “uninsurable.” We can redouble our efforts, and focus our attention on those previously uninsured to encourage better outcomes, and therefore, hopefully, lower costs for their insurers, and lower premiums (and excise taxes) for those of us unable to engage in collective bargaining and be shielded (until 2016) from the tax on our health benefits.
While much attention has been focused on the uninsured, and in obtaining insurance coverage for them, there has been little or no focus on the supply side of healthcare. Primary care providers – internists, pediatricians, family practitioners – are already very busy providing care. There has been little effort on the part of government to increase the supply of primary care physicians, and any such effort would take several years time to have any impact. On the contrary, the SGR formula and the unwillingness in Congress to address this chronic pay problem for physicians once and for all, deters potential physicians from entering primary care fields, or the profession at all, for that matter. Physician incomes have declined substantially, when adjusted for inflation, and primary care incomes have been hardest hit.
Inflation adjusted physician incomes.
Source: Losing Ground. Physician Income 1995-2003. Center for Studying Health
Jeffrey P. Harris, MD, FACP, president of the American College of Physicians (ACP), has testified before the House Energy & Commerce Health Subcommittee “The United States is experiencing a primary care shortage the likes of which we have not seen.” He goes on: “The demand for primary care in the U.S. will grow exponentially as the nation’s supply of primary care dwindles.” As the population of those previously uninsured or uninsurable obtains coverage, the demand for services will increase, straining even further an already-strained system of primary care.
This is the perfect storm of increase demand, dwindling supply, unequal taxation and increases in healthcare premiums well over 50% (If premiums increase 12%, the total increase in cost will be 56.8%) which is likely to spur physician activism. How can a physician, facing skyrocketing healthcare costs for himself, his family, and his staff, make an impact on these costs? He or she cannot join a labor union. The courts have ruled that independently employed physicians may not engage in collective bargaining. It seems to me that the physician can best improve the situation by working to improve outcomes for those who were previously uninsured or uninsurable. These are newly insured people, the overwhelming proportion of whom are not likely members of labor unions (or they would have been insured already).
Demand will far outpace supply in primary care, and physicians will be able to afford to pick and choose their patients. It is not a stretch, then, to imagine that physicians might choose to dissociate themselves from health plans whose members are exempt from paying the same taxes the physicians pay, and focus on those patients whose outcomes have a direct impact on the escalating health care costs paid for by their practices.
Draw your own conclusions.