An Average Physician's Average Bill


August 21, 1991|By JANE M. ORIENT

TUCSON, ARIZONA — Tucson, Arizona.--"I'm sorry, but the Doctor is not taking any new Medicare patients.''

''I'm sorry, but the Doctor has no appointments for six weeks.''

''The number you have reached has been disconnected or is no longer in service.''

These are the messages Medicare patients may be hearing soon. Private doctors, if they remain in business at all, will probably be cutting back on their Medicare practice -- or dropping it altogether. The reason is grim financial necessity.

Congress has enacted ''physician payment reform.'' The idea was to pay family doctors more and to reduce the fees of ''overpaid'' specialists like surgeons. Presuming that the government-prescribed fees would be perfectly fair, Congress also placed new limits on what doctors can collect directly from patients. These limits are much more stringent than the price controls that have been in effect since 1987.

The theory of a ''relative value scale'' sounded good to many doctors, especially those who were to get more money at the expense of their colleagues. But when the government released the actual numbers in June, doctors went into shock. Most surgeons' fees will be slashed by 40 percent or more. Internal-medicine specialists will see a smaller decrease.

The family doctors who were supposed to benefit may receive a slightly higher fee for an office visit, but they won't be allowed to charge for supplies, for giving injections or for reading electrocardiograms. Their charges for drugs will be set on the assumption that they can get a 15 percent discount from the wholesale price. If they don't stop providing certain services, they will be working for negative pay.

''Physician payment reform,'' like ''comparable worth,'' was sold a way of making life fair. Actually, it is a way to cut the Medicare budget (of which 20 percent goes for doctors' fees).

Doctors are thought to make too much money. So the government decided that physicians shouldn't be allowed to set their own fees as plumbers, hairdressers and other small businessmen do. The government would set them in a ''scientific'' and ''budget-neutral'' manner.

It hired William Hsaio, a Harvard economist, to do a multimillion-dollar study. He came up with miles of computer output that are supposed to tell the ''relative value'' of every medical service from seeing an average patient with sniffles to taking out an average gall bladder. (All patients and gall bladders are the same and are exactly average, according to the government.) If Dr. Hsaio's study didn't produce a needed figure, the bureaucrats at the Health Care Financing Administration used ''extrapolated data.'' (That means they made something up).

Then they calculated the average overhead of the averagphysician. The bureaucrats ''couldn't find'' information on commercial rents. So they used apartment rents to figure what doctors' office rents should be. And since it would be ''circular'' to use doctors' present incomes to determine what their incomes ought to be, the Health Care Financing Administration used 1980 census data for the hourly earnings of workers with five or more years of college. (Never mind inflation and four years of medical school and three or more years of residency.)

So next year Medicare carriers will tell doctors what they are permitted to charge. If doctors or clerks make a mistake in their reading and charge $19 instead of $18.35, the fine is $2,000 per instance.

What will doctors do? Congress and the Health Care Financing Administration assume they will ''make it up on volume.'' Therefore, fees were cut even more so that doctors could only make up half their income loss by working harder.

Well, what would you do? Suppose you were already working 80 hours a week. Suppose your expenses (like most doctors') took 50 cents or more of every dollar you collected. That means that if a fee is cut by 50 percent, overhead eats every bit of it and you get paid nothing, or you actually pay for the dubious privilege of working. Suppose you had to pay more for materials than you could collect for a finished product?

In a 1990 survey by the Association of American Physicians anSurgeons, nearly 50 percent of physicians said they would respond to a cut in Medicare fees by seeing fewer Medicare patients. The survey was taken before doctors had any idea how severe the fee cuts were to be.

The senior-citizens' lobby has pushed for government controls on physicians' fees. Seniors have paid their taxes and their Medicare premiums. They don't want to have to pay their doctor out of pocket.

But what will they do if the doctor is not in?

There are several possible courses of action. One is to herd senior citizens into Medicare mills where nurses or other ''limited-license practitioners'' see 20 patients an hour according government-mandated practice guidelines. Such clinics would make money under the relative-value scale.

Another is to try to force doctors to continue current services at bargain-basement prices, say by threatening to revoke their licenses. This is like sentencing someone to penal servitude without first convicting him of a crime.

A third is to repeal government price fixing and allow doctors and patients to determine a mutually acceptable charge, whether or not it is fully covered by Medicare or other insurance.

That is called the free market. In medicine, it is called private practice. Why not legalize it for those who choose it?

Dr. Orient, an internist, is executive director of the Association of American Physicians and Surgeons.

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