Obamacare Finds Its Cost Savings — Stop Paying Doctors

1e65president obama 599x400 Obamacare Finds Its Cost Savings — Stop Paying Doctors

Peter Suderman noted, the Obama administration is
simultaneously pushing for Medicaid expansion and arguing
that states should be allowed to reduce reimbursement to providers
as a means of controlling costs in the bloated program. This comes
even as Medicaid is already struggling to find providers
willing to see patients — with low compensation cited as a major
reason for the shortage.
The Obama administration’s argument for reducing reimbursements
for providers who see Medicaid patients was
made very succinctly in a California courtroom:

“There is no general mandate under Medicaid to reimburse
providers for all or substantially all of their costs.”

The administration makes its argument in a case challenging
California’s decision to reduce Medicaid reimbursements by 10
percent. Note that if you don’t reimburse sellers of goods and
services for “all or substantially all of their costs” you are
presumptively asking them to lose money on the deal. Unsurprisingly
to everybody except government officials, providers tend to stop
providing under such circumstances, if only to avoid bankruptcy, or
else because they’re going through it.
As it happens, California
already has a shortage of willing providers, and is looking at
expanding the roles of nurse practitioners, pharmacists and other
medical practitioners to try to fill the gap. But there’s no
particular reason to think that other providers are more prone to
financial martyrdom than are physicians. They have to cover their
costs, too.
The problem isn’t confined to California. A study published
October 12 in the American Journal of Medical Quality
found that the ranks of “safety-net physicians” — those willing to
see Medicaid and uninsured patients —
appears to be at its limit under current
The senior author of the study, Eric G. Campbell, PhD, of the
Mongan Institute, commented, “This study raises very serious
concerns about the willingness and ability of primary care
providers to cope with the increased demand for services that will
result from the ACA.”
And why are those ranks so strained? As I
wrote a few weeks ago:

Last year, a Physicians Foundation
survey found that 26 percent of physicians had closed their
practices to Medicaid patients because of concerns over
compensation and red tape. Kaiser says the number of doctors
turning away Medicaid patients is
closer to a third. ; Pharmacists haven’t been much happier.
Walgreens pharmacies in Washington
turned away Medicaid prescriptions because they were losing
money filling them (the state relented) and pharmacies did the same in

It’s hard to see what the administration’s end game is here.
Even if you buy the conspiracy theory that Obamacare is
meant to fail in order to pave the way for some full-blown
single-payer health system, based, no doubt, on the
thriving French system, there’s no road there from here. An
entirely government-controlled healthcare system would resemble
Medicaid/Medicare writ large. And the Obama administration
envisions cuts to Medicare, too, especially in terms of
compensation to hospitals. That linked Washington Post
article may insist that the proposed cut “does not, however, change
the basket of benefits that patients have access to,” but it’s
unclear just who will provide those benefits if they’re not
being paid.
Deciding not to pay for stuff is a great way to reduce your
expenses — unless you actually need that stuff.

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Obamacare Finds Its Cost Savings — Stop Paying Doctors

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