Healthcare – This is important!! |

Healthcare – This is important!!

I didn’t write any posting yesterday – but I have a good reason. As long-time readers know, I have been following, writing about, and (in small ways) trying to convince and push people toward a more equitable system where there is a more direct link between the people performing the procedures, the people receiving the procedures, and the parties paying for the procedures.

Anyway, yesterday the Senate failed to stop a 21% reduction in reimbursements to doctors. As an initial step, Medicare will withhold payments for 10 days to participating physicians. Since most insurance carriers base their reimbursements off of Medicare, we can expect the reduction to occur across the board. If the reduction sticks, let’s think through the consequences. Assuming most doctors offices face the same dynamics as other service-oriented small businesses (probably with slightly lower margins), we can assume that these 3-10 doctor practices have a 20-25% margin. The physicians that are not partners, will still expect the same pay (as employees, it’s tough to cut their pay based on fickle reimbursements) and so, this reduction will essentially eat at the margins of all the small business owners (who are also physicians). In turn, they will be forced to limit services, sell their practices, or just shut down completely. Seriously. That’s why I didn’t post yesterday – we’re doing some scenario forecasting with different physician groups. And the trend doesn’t look good for the small practices.

So the next time someone talks about cost-controls or the implications of a single-payer system, feel ask them to contact us so that we could walk them through the actual economics of medicine.

Read the full story (which WASN”T MENTIONED ANYWHERE!!!) here.

Last 5 posts by Yaron Sadan

That sinking feeling - May 18th, 2012
Opportunity on the horizon - May 18th, 2012
Early can hurt - May 16th, 2012
Diversify your Diversification - May 15th, 2012
Losing Money Isn't a Crime - May 15th, 2012