“I won’t be able to see you anymore.” When these words are a spoken in a Nicolas Sparks’ romance movie they are to be expected. When a physician hears them from a patient it is a surprise. Well, it used to be a surprise. More and more patients are being forced to find a new physician due to a change in their insurance plan.
ObamaCare has been in effect for over a year now. The public and media focus on insurance coverage and costs to the consumer but they overlook the profound impact on providers and health systems. Methods of care delivery, attitudes to customer service and access to providers are all evolving as the health care system struggles to adapt to a changing marketplace. As primary care providers are the point of access for most care we are seeing these changes directly impact our practices and our livelihoods. Doctor responses to these changes are likely to result in it becoming increasingly difficult for a patient to see a physician, so it is important that patients understand what is happening and what their options are.
As with many things in a capitalistic economy, it all comes down to money. The Affordable Care Act places limits on what insurers can charge for coverage, particularly for the sick and the elderly. In order to continue to make a profit (which is why companies are in business) they must find ways to cut costs. Costs are cut by decreasing payments to providers, both hospitals and doctors.
For primary care doctors in Southern California, ObamaCare plan cuts have been dramatic, 40% or more on already discounted rates. Insurers that once paid $75 for a routine office visit billed at $110 are now offering to pay $45 or less. Many doctors, especially those in private practice, cannot survive at this level of reimbursement.
Understanding the struggles faced by doctors in the current system requires an understanding of the costs of maintaining an office. A typical Family Doctor in private practice has a minimum monthly overhead of over $21,000 a month (for many it is much higher), or $160 per hour of patient care. (a cost breakdown is below.)Typically, a doctor’s day is 6 hours of direct care and 2-3 hours or more of additional work (paperwork, review of lab results, refills, phone calls, emails etc.) If a doctor saw only Obamacare patients at a rate of $45 a visit and saw the standard four patients an hour, he would be making a profit of only $20 per hour of patient care. That works out to $600 a week or $30,000 a year! At the previous level of reimbursement of $75 per visit, doctors would make $140 per hour of patient care, $4200 a week, or about $200,000 a year. A reasonable salary for the years of training and level of responsibility, but it is no longer a given.
Doctors faced with such drastic changes are faced with limited options-
1- Increase the number of patients seen. At a payment of $45 per visit, doctors would need to see 8 patients an hour to keep pace. It is hard to provide good care in 7.5 minute increments, so the quality of care will drop dramatically. This is the reality for many patients on Medicaid (Medi-Cal in California)
2- Hire Physician Assistants or Nurse Practitioners. PA’s and NP’s earn about $70 an hour, so the profit on a busy midlevel provider could make up for some of the loss in income. This requires an additional 120 visits a week, (about 2500 patients in the practice), and as it could take years for a practice to double in size this is not a viable option for most providers.
3- Give up and join a hospital practice. An increasing number of doctors are leaving private practice and becoming employees of hospitals and medical groups. The financial pressures are not removed, they are simply passed on to a larger entity. The need for increased volume and the resultant decrease in quality remain.
4- Refuse to participate in lower paying plans. This is the current option of choice and explains why there is a fear that it may become increasingly difficult for patients to find a primary care doctor. This is the option I am currently choosing, but it means saying good-bye to many long term patients.
5- Charging extra fees. This is the wave of the future. Insurance contracts prohibit charging extra on a per visit basis, so doctors are charging “membership fees”, annual fees for access, email communications, and annual fees to cover such things as insurance appeals and form completion. In my community these fees range from a low of $400 to a high of over $3000 for the high-end concierge practices.
Patients are having to make choices as well. Some of my patients are choosing to see me outside of their insurance plans and pay cash for their visit. They view their ObamaCare plan as something to cover emergencies and catastrophic illnesses and injuries. Other patients are leaving my practice for physician employees of large medical groups. Almost all of my patients are wondering what the future will bring. My answer is always the same, “I have no idea.”
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Monthly Cost Breakdown: (very conservative estimate)
Staff Salaries and Benefits: $10,000
Billing Service: $3000
Phones (office and Cell): $700
Workers Comp & Liability: $500
Medical Supplies: $1100
Equipment (computers/Ecg): $100
License and Membership Fees: $100
Miscellaneous expenses: $500
Patient care hours/ month: 130
Overhead per hour: $161