The Fiscal Cliff: Affects On Healthcare
The fiscal cliff means many things to many people in America. The mandatory tax increases through elimination of the Bush era tax cuts are coupled with spending cuts that will have an obvious impact on the economy in the early part of 2013 and beyond. The leaders of the country are grappling with the vastly different agendas that are pressing upon the future survival of our economy and nation. The typical approach of “kicking the can down the road” is not acceptable anymore. Europe has seen the devastation of fiscal irresponsibility and incompetence as well as downright theft.
The tax controversies are multiple and affect all of us. As a small business owner and physician the dilemma hits me from multiple angles. My business is taxed as ordinary income, and an increase in the tax rate on individuals earning over 250,000 dollars per year is a direct hit to the bottom line. The more successful my company becomes the more I am able to pay my staff and the greater their benefits. With a tax hike inevitable I have to prepare for higher costs by reducing hours, cutting benefits and stream lining the practice. Longer hours of work are being added and alternative sources of revenue need to be explored.
The next blow comes in the form of an impending cut to Medicare reimbursement. Currently Medicare pays about 11 cents on the dollar for care. The elderly with spine issues are complicated cases at baseline, and some are off the charts in terms of complexity. I continue to see these patients, but wonder how much longer it remains viable. The opportunity and subsequent cost of lost time is difficult to replace. The proposed 29% cut will be devastating to both physicians and patients. Access will be an issue unless physicians are employed by a health care organization where reimbursement is taken out of the picture.
Many physicians that are near the end of their practice life are selling out to health care organizations. In exchange for a short term contract and up-front payment, practices are folding faster than one can believe. The ever rising costs of running a business and the declining reimbursements are hammering every practice. The problem on the horizon for all health care consumers is a market where physicians are employees. This will definitely translate to less access, less innovation and a different experience.