by Martin Light
In the 1970s I worked in the financial division of a major university medical center and saw the beginnings of how doctors and hospitals had begun to be shackled and bludgeoned by excessive regulations and made to subsist on declining reimbursements. Prior to that time doctors and hospitals could actually expect to be paid for their technical life-saving skills and expertise on a fee-for-service basis but today both are paid/reimbursed pennies on the dollar for those same services.
Folks, it isn't going to get any better but only worse unless Obamacare is killed by a spike driven through the heart of it.
Since the Social Security Act of 1965 was signed into law on July 30, 1965, by President Lyndon B. Johnson as an amendment to then existing Social Security legislation, doctors and hospitals have seen their incomes slashed. Medicare was created to provide healthcare for the elderly and Medicaid (MediCal in California) was to do the same for the poor, however, these two programs substantially expanded the role of the federal government into the process of how doctors and hospitals were to be paid. For example, the Omnibus Budget Reconciliation Act of 1989 made several changes to physician payments under Medicare by introducing the mandated Medicare Fee Schedule which set reimbursement rates for services provided by doctors. Up until then doctors and hospitals had been charging fair fee-for-service prices just like other highly trained technical experts. Imagine taking your seriously ill family vehicle to the auto mechanic and expecting him to accept pennies on the dollar for skills you don't have but desperately need.
Over the years as doctors continued to serve Medicare and MediCal patients while being paid less than before, they have had to do something to make up for the loss in revenue in order to stay in business. Although Medicare was never meant to be used as a guide for private health insurance payment schedules, insurance companies and health plans have been basing their rates of payment on those of Medicare. As a result, doctors have had to painfully suffer the loss. They can't even write the loss off. The services basically never happened! This is legalized theft and any physician with fiscal responsibility and a moral sense of the need to keep his craft capitalized knows it. But, doctors attack disease and don't fight in this arena because it would seem uncaring. They simply suffer quietly, but please recognize they still care intensely about us. The proof, they keep working, but it's making less and less sense. It appears that they are having a harder time believing in themselves.
No matter how much we pay for private insurance, their payment to physicians is either slightly above Medicare rates (for better insurance companies) or BELOW Medicare rates. It is not uncommon for some insurance companies to pay 10-20% LESS than Medicare.