Last year, President Obama cited the Mayo Clinic as a “classic example” of efficiency – able to provide better outcomes at lower cost. At the beginning of this year, the Mayo Clinic announced that it will no longer accept Medicare patients at its Arizona clinic. Mayo’s decision, according to the Wall Street Journal, is part of a two-yearpilot program to determine if it should also drop Medicare at its other facilities, which serve more than 500,000 seniors.
According to the report, Mayo lost $840 million last year treating Medicare patients due to the program’s low reimbursement rates. According to Mayo, “Decades of underfunding and paying for volume rather than value in Medicare have led us to this decision.” Will Mayo’s decision lead to similar decisions by other physicians and physician groups? Since physicians nationally earn, on average, twenty to thirty percent less from Medicare than they do from private patients, many
physicians are taking a closer look at their costs to determine whether continued participation in Medicare makes economic sense.
In New Jersey, where many managed care companies pay even less than Medicare, the need to reconsider participation is even more compelling. If the Mayo clinic, with its size, buying power, and management efficiency, cannot make a profit treating Medicare patients, can the average practitioner in New Jersey make a profit from payors who reimburse even less?
According to the Wall Street Journal, only 73% of family physicians are accepting new Medicare patients and in certain parts of the country Medicare patients are struggling to find any specialist in neurology,oncology, or gynecology. And by most accounts, President Obama’s health reform proposals will only make this problem worse.
In New Jersey, the problems are even worse. A statewide Physician Workforce Policy Task Force recently issued a warning of “an unprecedented shortfall” in the number of physicians available to treat patients in New Jersey.” Finding a physician shortage crisis right around the corner in New Jersey unless immediate steps are taken, the report concludes that national health reform will only work to accelerate the time when there simply will not be enough doctors to serve New Jersey’s adults and children.
The report blames the anticipated crisis on New Jersey’s hostile medical malpractice environment and concludes that tort reform needs to be a part of any solution. Clearly, absurdly low reimbursement rates are also driving physicians out of New Jersey.
New Jersey Physicians will use this report to help reignite legislative interest in true tort reform in New Jersey. It looks forward to working with the Department of Banking and Insurance and Commissioner Considine to unwind efforts by managed care companies which result in continuing reduction in physician reimbursement rates. New Jersey Physicians is hopeful that the new Christie Administration will join with it in convincing our legislature that it can no longer simply ignore these problems and hope they go away. Now, it’s no longer just a matter of money, it’s a looming healthcare crisis – one that cannot be fixed by trial lawyers’ lobbying dollars, or managed care company bureaucrats. |