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KALSCHEUR: Doctors eye precautions as reform gains steam

October 17, 2009

Over the years, I have had the privilege to work with many medical doctors. They are smart, hard-working and well-compensated for their knowledge, experience and expertise.

Doctors want to help people; otherwise, they would not have gone into the profession. Likewise, most people like their doctors. It’s not surprising that doctors are routinely among the most respected professionals around.

Unfortunately, some people in Washington, D.C., claim that instead of being part of the solution, doctors are part of the problem. They accuse doctors of ordering unneeded tests and surgeries. All this so they can earn more money.

Based on the language used in the health care debate, doctors can read the writing on the wall. They understand that whatever reform comes out of Washington D.C., it will not be designed to help them.

New programs and mandates will inevitably lead to higher taxes, higher insurance premiums and larger caseloads. The one thing health care reform will not do is help doctors do their job of helping people.

Here are some of the changes some doctors are already considering:

• Alter services to reduce the chance of lawsuits, one of doctors’ biggest fears. Malpractice insurance premiums can easily top $100,000 per year for neurosurgeons, anesthesiologists, and obstetricians and gynecologists. While tort reform may not be the health care panacea some say it is, the fact is that doctors are leaving or avoiding these specialties because they can’t pay the insurance.

• Reduce time spent with patients. A doctor’s income is directly tied to the number of patients he or she sees on a daily basis. If reform cuts the amount paid to a doctor, the doctor must increase the number of patients to maintain the same level of income.

• Stop seeing certain patients completely. Almost 50 percent of doctors won’t take Medicaid patients now because they lose money every time they serve them. If similar cuts are made to Medicare reimbursements, the same thing will happen to current retirees. This also would hold true for any new health care program.

• Reduce pay and benefits. We have seen doctors and doctor groups eliminate defined benefit pension plans, cut back on seminars and continuing education expenses, and even mandate pay cuts.

• Close up shop or retire. The No. 1 question asked of us by doctors in their 50s and 60s is, “When can I retire?” Taxes, paperwork, unfunded mandates from the government and the ever-present risk of lawsuits are persuading them to hang up the stethoscope years before they need to.

• The best and the brightest will go into other professions. Would you go into the medical profession now? Would you want to be an OB-GYN, spend years in school, run up six figures in college debt, and work crazy hours—all with the knowledge that you can be sued at any time and lose much of your life savings over a perceived mistake?

• Doctors caught in the middle will cut expenses or merge. Consider the situation of many doctors in their 40s and 50s. They are too young to retire, but too old to switch professions. They have employees to pay, a mortgage on their professional building, college loans to repay, and general expenses for everything from computers to medical equipment. If health care reform cuts payments, these doctors will cut staff and benefits and limit purchases of new equipment.

Doctors in this group have one other alternative: merge. If fixed costs go up and income goes down, they can join or sell to a larger organization such as a hospital.

Doctors have earned and deserve our respect. Unfortunately, if Congress passes one of the current health care reform bills, it will lead to less time spent with patients, less money for doctors and their employees, and fewer doctors in the field.•

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Kalscheur is a senior financial consultant at Castle Wealth Advisors LLC in Indianapolis. Views expressed here are the writer’s.

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