The healthy healthcare discussion on Saturday (courtesy of Dan) led me to thinking (yes, that is dangerous) about the Medicare-for-all concept. I’ve spent 30 years coping with the business details of Medicare so I wondered if I could simulate a program.
As a first quick step I pulled some physician office financials and budgets and made the following modifications:
1) dropped private pay fees to match Medicare, increased Medicaid fees to match Medicare; the change was a reduction in collected revenue of about 35% – ( this would be different for a practice that was primarily Medicaid.)
2) the billing effort would be somewhat simplified (although not as much as some might think) so I dropped 30% of the billing cost, which translated to about 5% of collected revenue
3) I did not adjust ancillaries or procedures not currently covered by Medicare, but the impact would be small in many practices, practices with imaging centers or etc. would need a more complex model
This is a rough study based on a small sample of practices, and the result is equivalent to a 30% reduction (-35+5) in collected revenue and likely a 15% – 20% reduction in take home pay and benefits.
For a surgeon earning $500,000 this would result in an income of $400,000.
For a family practice doc, this would knock an income of $120,000 down to $96,000. My model may be flawed however, a better data sample would likely tell us that the family practice doc takes a bigger hit – it depends on practice mix.
For an OB/GYN, this could mean an increase or decrease, depending on the percent of Medicaid patients, and the balance of deliveries to surgeries.
I think this would be tough to sell to physicians (Medicare has a history of political shenanigans with reimbursement rates) unless some way could be found to relieve the docs of billing and/or IT costs as an offset. Also, there would have to be some fairly sophisticated modeling to determine where proper reimbursement levels would be. The rationing issue lurks.
Medicare and Medicaid assume the government patients will be subsidized by high paying private pay. Changing the system would be an interesting challenge. I have not addressed “who do we pay for this yet.”
PS: I just signed off on my manuscript proof for a book-and-CD on medical office management. I am going to sit on my back porch this evening and have a cold brewski. I request all AB regulars join me in that ritual.