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Medicare Is Bankrupting Doctors And Hospitals

Elderly People Street Sign by Ethan Prater via FlickrMedicare, the government insurance company for everyone over age 65 (and for the disabled), pays fees to primary care physicians that guarantee bankruptcy. Additionally, 70% of hospitals in the United States lose money on Medicare patients. That’s right … for every patient over age 65, it costs the hospital more to deliver care than the government reimburses. That is why Mayo Clinic has said it will not accept Medicare payments for primary care physician visits at its Arizona facility. Mayo gets it. Nationwide, physicians are paid 20% less from Medicare than from private payers. If you are not paid a sustainable amount, you can’t make it up in volume. It just doesn’t pencil out.

Mayo lost $840 million last year on Medicare. Since Mayo is considered a national model for efficient health care, if they are losing money it doesn’t bode well for the rest of us who are much less efficient and who have fewer resources for integrated patient care. Instead of Medicare payments for clinic visits, Mayo will start charging patients a $1,500 fee to be seen at their Glendale, Ariz., clinic. Much like a retainer, this fee will cover an annual physical and three other doctor visits. Each patient will also be assessed a $250 annual administrative fee.

Primary care physicians are on the front line of patient care and senior patients are the most time-consuming. The average Medicare patient takes 11 different medications. Just refilling and coordinating the medication can take up an entire office visit, without addressing other health concerns. I grant all Medicare patients a half-hour visit because I would be chronically behind if I didn’t. After paying office overhead, I am broke with Medicare.

I do not welcome the 65th birthday of my patients, but I continue to see them because I love my senior patients. No kidding, I really love being their doctor. They are grateful and respectful and have interesting health conditions. I am able to see them because I make my income from my administrative position and I have other patients who pay outside of Medicare.

Sad but true–unless we have true payment reform that values primary care and pays for coordination of care, I fear Medicare patients will not find enough willing physicians who accept Medicare in the future.

*This blog post was originally published at ACP Internist*

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2 Responses to “Medicare Is Bankrupting Doctors And Hospitals”

  1. I am a practicing dermatologist and am struggling with the current insurance and medicare rates. My practice focuses on skin cancer and general/surgical dermatology and I have a large senior patient population. while medicare pays reliably, the rates are low. Add to that the fact that the commercial insurers peg their rates to medicare and the financial spiral continues for my office. My profit margin is so low that I can’t afford further reductions. I had planned to get off the commercial plans last year but the down turn in the economy has caused me to delay that. I would really regret having to get off medicare because I love my senior patients. My survival plan is to build my cosmetic dermatology practice, which will of course cut in to my general dermatology practice.

  2. A question that comes to mind is whether Medicare needs to provide tools or protections for doctors to help reduce costs in exchange for only offering the lower payments. Given that doctors in other countries are providing services for far less and thriving, is there something to be said for Medicare providing doctors with malpractice protections in exchange for the lower fees. Are there other alternatives that could lower the costs for the doctor? Asking for more money is easy. Finding efficiencies is more difficult.

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