• Industry News
  • Access and Reimbursement
  • Law & Malpractice
  • Coding & Documentation
  • Practice Management
  • Finance
  • Technology
  • Patient Engagement & Communications
  • Billing & Collections
  • Staffing & Salary

Physician Cutting Costs to Stay Solvent


This pediatric micro-practice was hit particularly hard by state cuts and is considering eliminating lower-paying Medicaid patients from the practice.

The current healthcare market is testing our personal ethics. Our income is down significantly, and when we evaluate the reasons and what can be done about it, we don't like our options.

Like many of our colleagues in primary care, we saw a significant drop in revenue in 2015 (20 percent), compared to 2014. Interestingly, over that same time period, office visits were down as well, but by only 10 percent. For us this is confirmation of what we've noted anecdotally: Demand for medical care is only down among working and middle-class patients with high-deductible health plans. Medicaid patients (30 percent of our patient population) and affluent patients (which we also have in significant numbers) are coming in as often as before. Only patients who struggle with out-of-pocket medical costs delay necessary primary care.

In addition, in 2015 the Commonwealth of Massachusetts chose to not continue the pay-parity provision of the Affordable Care Act (it was required in 2013 and 2014, but not in 2015 and beyond). Starting in 2015, we earn only 68 cents on the Medicare dollar for Medicaid patients - a 32 percent pay cut.

To put it bluntly, our current situation stinks. Although we are confident that we understand why revenue and income are down, the challenge is what to do about it. As we've written before, we feel strongly that single-payer healthcare, essentially Medicare for all, is the only solution that would enable us to earn a living delivering primary care to the whole community. Of course, that's not an option right now. So, what is?

Colleagues have recommended that we do what they do: Stop seeing Medicaid patients. Or, along those lines, utilize a direct-pay model to beef up revenue and keep patients with limited disposable income at bay. It certainly is an option. We currently have a four- to six-month wait for new patients, and, even in a middle-class community like Plymouth, Mass., we would have enough patients with commercial-only insurance to keep us busy.

It's tempting for another reason as well. In addition to the state slashing its Medicaid reimbursement fees, it has also increased the amount of paperwork and red tape we must work through to treat Medicaid patients. Most significantly, we struggle with getting the state's Medicaid MCOs to correctly enroll patients with their established primary-care physicians. This last problem is so significant state wide that there is pending legislation (HB1036 & SB570) to prohibit the state from enrolling any patient in a plan or with a PCP they are not already established with, to ensure better, not to mention cheaper, continuity of care.

Of course, marginalizing poor people does nothing to make up for the families who avoid the doctor due to overwhelmingly high deductibles. More importantly, and we can't stress this enough, we just couldn't live with ourselves if we stopped seeing the neediest patients in our community. We're not selling designer jeans or smartphones. We provide basic pediatric primary care and, even though it's how we earn our living, we're not looking to maximize profits at the expense of the community as a whole.

Our financial outlook for 2016, so far, looks much better than 2015. To make up for the loss of revenue, we chose to cut costs and won't be replacing a nurse practitioner who left us last year. This change significantly reduces our expenses and has a relatively small impact on patient care For example: longer wait times for returned phone calls and no more Saturday appointments. Of course, with our fixed expenses growing constantly (EHR costs and our own healthcare premiums in particular), who knows for how long we can offset lower revenue by just cutting costs.

So tell us, besides turning our backs on low-income families or charging concierge prices, what else can we do? What have you done? Have you sold your soul for decent income or are you sacrificing your financial stability for your ethics?

Related Videos
David Cohen gives expert advice
David Cohen gives expert advice
David Cohen gives expert advice
David Cohen gives expert advice
©John Kwan/Shutterstock.com
Related Content
© 2024 MJH Life Sciences

All rights reserved.