What Obamacare will cost doctors
One post asked a very good question: "Why can't we just put everyone in the country on Medicare?" Aside from the problem of a huge expansion in the unfunded obligations for the Medicare program, currently estimated to be $89 trillion, my immediate thought was that you can't stay in business as a physician at Medicare reimbursement rates.
I used my specialty, anesthesiology, to illustrate the problem. Using the best information I could find and the example of my own solo practice, I came up with some sobering figures.
Anesthesiologists bill for most surgical cases with a combination of base units depending on the particular surgery (e.g. cardiac bypass has a higher base value than a hernia repair), plus one time unit for every 15 minutes. The average anesthesiologist bills 10,198 units in a year. Medicare pays, on average, $20.925 per unit. Now $213,393 a year sounds like a pretty decent living for most of us and it certainly would be until you start backing out expenses.
A billing service is in the neighborhood of 6% ($12,804) and average malpractice is about $23,000. I'm paying around $15,000 a year for health insurance for a family of four. Various expenses for continuing education, computers, cell phone, office supplies, etc. adds up to around $5,000. AMA, state and local medical society and American Society of Anesthesiologists dues add up to $1,700, if one chooses to join. I'd like to retire someday, so I put away 10% for retirement. Self-employment taxes take $17,154. And I have no employees or office. Most medical practices have a much higher overhead both in real terms and as a percent of revenue.
So what's left?
$117,753, but without the "doctor fix" it would be $85,770. All that in exchange for 50-60 hours a week (including being on-call), coming out of school with an average student loan debt of $156,000 with a payment of over $1,000 per month, and putting your life on hold until at least age thirty. Suddenly it doesn't look like such an attractive option.
And then there's the guy you knew in college who coasted through studying sociology and went to work for the US Department of Health and Human Services right after graduation. He's had eight years to climb through the bureaucratic ranks and is now one of the 19% of the federal workforce that makes over $100,000 and that's before bonuses and overtime. And you always thought he was kind of an idiot.
The average pay of a federal worker in now $71,206, compared with $40,331 in the private sector. Excellent fringe benefits widen the gap even more.
Most of my colleagues are similar to me in coming from middle class backgrounds. I worked to go to school and probably paid for half of my education at a state university. I borrowed money for medical school. Another significant number of doctors are second or third generation physicians, but very few come from well-to-do non-medical backgrounds. And what will happen when medicine is no longer an attractive option for bright motivated youth to move up the socioeconomic ladder?
See that assistant supervisor at your local DMV? The guy sitting in the office drinking coffee, shuffling reports and playing solitaire on the computer?
Meet your heart surgeon.