Here, once again, is a link to the article that I said you should avoid reading.  Having said that, another part of the article deserves addressing, now that I’ve had more time to digest it.  Early in the article, the authors decry the “temporary” 5 year increase in primary care fees of 10%.  According to the authors, this “temporary” boost in pay is not likely to change medical students’ minds toward favoring primary care practice as a career path.  Thus the shortage of physicians available to see Medicare patients is not addressed with this “temporary” remedy.  The recommendation?  A permanent increase of 10% of fees associated with primary care functions, what we refer to as E and M, evaluation and management.

I’ll get back to all of this in a minute.  I started my private practice in July of 1990.  My plan was to do about 50% cardiac anesthesia.  Most of the cardiac anesthesia cases were Medicare.  Medicare paid about $1250 for the anesthesia fee for an open heart surgery.  This was substantially less than what private insurers paid us but seemed like pretty good money to me.  Within two years the intellectual giants at Harvard birthed the RBRVS (resource based relative value scale), a Medicare pricing system that in spite of its incredibly flawed premise, continues to define physician payments to this day.  The initial effect on me in 1992-3 when this was implemented?  Payment for an open heart procedure went to $500.  Anesthesiologists, radiologists, pathologists and emergency room physicians were the initial targets for fee reduction, as hospital-based physicians were seen as mostly defenseless targets, unable to react with any work stoppages.  One year later, the anesthesia fees were once again cut.  In half.  I’ve written on this blog before that the last open heart anesthetic I gave (a six hour case on an extremely sick patient) resulted in a payment to me of $285 from Medicare.  I quit.  Many anesthesiologists were in a position such that they felt they couldn’t quit.  This is precisely what the folks in the government were counting on.  Not long after this, I received a Medicare payment for the anesthesia for a knee replacement for $78.  I quit dealing with Medicare altogether at that point.  Medicare made it easy for me with payments like this.

What’s my point?  There aren’t any guarantees, particularly when dealing with the government.  One of the reasons for this is the unstable source of government money:  mugged taxpayers.  People don’t like to get mugged.  People don’t pay muggers gladly.  Pressure will always exist to decrease the incidence and severity of government muggings.  I think that there are a lot of physicians that don’t understand this.  No guarantees exist for the owner of the restaurant or the lumber yard.  These folks battle the ever changing market forces every day.  New competitors. Changing conditions.  New products that may make part of their inventory obsolete.  Yet physicians seem to want guarantees.  Government guarantees and subsidies are how economic bubbles and mal-investment happen.  What happens to the doc who foolishly chooses the subsidized path when the bubble bursts?  All of this tinkering with prices and guarantees, all ignorant of the all-powerful market forces just under the surface, will cause major dislocations later on.  

Many physicians want to be insulated from the market.  This union or guild type mentality particularly plagues those in academic medicine.  Relieved of the pressure of providing competitive customer service, it should come as no surprise that quality has suffered and prices have soared.  I can’t count the number of “quality” groups that have sprung up to measure and monitor medical quality.  What a joke.  The free market knows how to do this.  Brutally!

How many businessmen would like to have a guaranteed 10% increase in their prices, permanently?  What sort of fool would propose something like this?  I think that this illustrates how far removed medical care in the U.S. is from what businessmen in every day of their lives face in terms of market pressure.  As physicians are increasingly brutalized in their government payments, maybe they will walk away from this unstable source of revenue, a move that would benefit those who walk away and those patients who walk with them.  The truly poor and needy have been neglected to death by the very same system the demagogues have devised to secure their vote.  It is hardly credible or desirable to claim that this system is capable of providing guarantees of any kind I think.

G. Keith Smith, M.D.