Physicians lose income to Medicare cuts - Short Takes News at Deadline - Brief Article

Physician Executive, March, 2002 by James A. Hawkins

On January 1, Medicare cut physician fees across the board by 5.4 percent

While there are many efforts under way to reverse these cuts. for now they are hitting the bottom lines of physician practices hard. Meanwhile, with many states feeling budget woes as a result of the recession and rising health care costs, Medicaid programs across the nation are being pared.

As a result, a growing number of physicians are readdressing the question of whether they can afford to treat the poor and elderly. The American Medical Association calculates that over the last 10 years, doctor payments from Medicare have risen only 18.5 percent, an average of just 1.1 percent a year a number far below the increase in the cost of living during the same period.

It is estimated that the current Medicare fee cuts will cost doctors around $7 billion in 2002.

Across the nation, physicians are scrambling to find ways to make up for this lost income. Some doctors have opted to reduce the number of patients they see and boost their incomes by charging steep fees for plush services and amenities that are typically not covered by third-party payers.

These "concierge" services include round-the-clock cell phone access to physicians, home visits, health club and spa services. There are some primary care physicians who are going to extraordinary lengths to coordinate the care their patients receive, even to the extent of accompanying them on their visits to specialists.

These added services do not come cheap. In Boston, two physicians announced plans to charge their patients $4,000 annually for a long list of services in addition to what health insurance pays for their medical services.

The doctors expect the number of patients they see to fall dramatically, from thousands to a few hundred. But the doctors contend the new arrangement will enable them to give their patients the kind of care they have always dreamed about providing.

James A. Hawkins is a health care writer based in Aiken, S.C. He can be reached by phone at 803/414-2062 or by e-mail at hir@ix.netcom.com.