Tougher for Physicians Under PPACA

May 7, 2010
Don McDaniel

Just last week, the CMS Office of the Actuary published its analysis of the recently passed “Patient Protection and Affordable Care Act”. It presents a future-state picture that may not be that pleasing to physicians, particularly physicians operating in small, independent practices.

Just last week, the CMS Office of the Actuary published its analysis of the recently passed “Patient Protection and Affordable Care Act." This analysis was developed at the request of Representative Dave Camp, R-PA, and summarizes the Office of the Actuary’s estimates of financial and coverage effects through fiscal year 2019.

This analysis was delivered, of course, after the passage of the PPACA as amended by the “Health Care and Education Reconciliation Act of 2010,” and presents a future-state picture that may not be that pleasing to physicians, particularly physicians operating in small, independent practices. The source of potential concern revolves around a couple of compelling findings by the Office of the Actuary.

First, and problematic for anyone in and around the U.S. healthcare system, the analysis notes that national health expenditures under health reform will increase by over $300 billion by the end of the decade.

Second, the analysis finds that the cost of expanding coverage will be largely covered through fairly dramatic cuts to the Medicare program, totaling almost $600 billion through 2019. This is an issue for a number of reasons important to the viability of physician practices, not the least of which is pressure that such cuts will place on Medicare physician reimbursement. This could make the recent debate over a 21 percent reduction in payments an everyday nuisance, especially in the face of demographic trends that indicate outsize enrollment growth in Medicare over the next half-century.

Third, about one-half of the new insurance enrollment created by health reform will come through expanded eligibility for Medicaid; “an estimated 18 million would gain primary Medicaid coverage as a result of the expansion.” (page 3) The analysis goes on to further suggest that such coverage expansion, given physician participation in Medicaid, will do little to provide actual expanded access to health care.

This notion seems to be consistent with the experience in Massachusetts, which has seen expanded coverage in the face of static (at best) physician supply. To this point, wait times for primary care services have grown substantially since the landmark Massachusetts reform was implemented in 2006.

Finally, all signs point to this legislation creating a tougher road for small business, including physician practices. These exacerbated hardships will take the form of potential penalties, increased administrative requirements, and a continuation of raising premiums that disproportionately affect small business.

If I was a conspiracy theorist, I might conclude that there’s an all-out assault on the great American physician-entrepreneur!