Monday, December 13, 2010

Physician Access Crisis – I Told You So

I have predicted repeatedly the next big health care crisis will be access to doctors. Now, I am pleased to say, an economist, Tyler Cowen, a professor of economics at George Mason University, agrees with me (“Following the Money, Doctors Ration Care,” New York Times, December 11, 2010).

Here is a sample of his reasoning,

UNEQUAL access to health care is hardly a new phenomenon in the United States, but the country is moving toward rationing on a scale that is unprecedented here…The underlying problem is that doctors are reimbursed at different rates, depending on whether they see a patient with private insurance, Medicare or Medicaid. As demand increases relative to supply, many doctors are likely to turn away patients whose coverage would pay the lower rates.

It is common, the professor says, for Medicaid to reimburse at only 40 percent to 80 percent the rate of Medicare. Medicare, in its turn, may pay at only 70 percent to 80 percent of what private insurance pays.

What Professor Cowen fails to say is:

One, doctors “ration” because they have no other choice. Neither Medicare or Medicaid may pay sufficiently to cover the expenses of doing business or staying in practice.

Two, the ultimate legacy of the Accountable Care Act (ACA), with the express purpose of covering 34 million more uninsured, may be that the ACA decreases access to doctors for the rest of us. Expanding access may be meaningless without doctors.

The paradox comes down to supply and demand. The demand for medical services will go up under the Accountable Care Act, but the supply of doctors to supply those services will go down.

Doctors, says the good professor, are “highly regulated and in that manner restricted in supply. The Association of American Medical Colleges estimates that the United States could face a shortage of 150,000 doctors in the next 15 years.”

This reality does not bode well for the 78 million baby boomers who will enter the Medicare ranks over the next 16 years, at the rate of 13,356 each day. Nor does it bode well for the political establishment. Seniors are a potent voting bloc. Medicaid recipients, who tend to be Democratic, may also rebel.

The current health reform bill gives token bonuses to doctors entering primary care specialties, but that will not be enough to increase the supply by 2014, when the 34 million newly insured will expect to see doctors.

Other alternatives to ease the access crisis to doctors are to increase the supply of nurse practitioners and physician assistants, reform malpractice, promote retail clinics, import more immigrant doctors, shift more costs to Medicare and Medicaid patients to stem demand, make Medicare and Medicaid less of a blank check by issuing vouchers for a fixed amount of money for care.

Or we could pay doctors more, lessen their regulatory burdens, and institute health and flexible savings accounts with high deductibles and catastrophic ceilings, thereby encouraging patients to be more prudent while spending their own money while putting aside savings for essential care while the government takes care of catastrophic expenses.

If all else fails, we could raise taxes and let government take over. In the present political environment, given the current tax climate, that does not seem to be an option.

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