The Obamacare Exodus

If the health-care law comes into effect, would our doctors really leave the business?

In 2014, most of the provisions of the federal Patient Protection and Affordable Care Act—known to its close friends as Obamacare—are set to take effect. Of course, it’s possible that President Mitt Romney or the U.S. Supreme Court would have something to say about that, but health-care reform is close enough at hand that many in Nevada are already beginning to wonder—and worry—what it will mean for them.

Nevada’s uninsured population in 2010 was at 545,000, according to the Kaiser Family Foundation, up from nearly 460,000 in 2005. There are 2.6 million residents in Nevada today, about 21 percent of them uninsured. The Affordable Care Act is supposed to help cover another 32 million people nationwide and cut Nevada’s uninsured population in half.

Doctors, however, remain leery of the changes that will usher so many more patients their way. In a 2009 survey published by The New England Journal of Medicine, four out of nine American doctors said they would consider leaving practice or take an early retirement if the act was passed.

That sentiment appears to be about the same, if not worse today, says Dr. Kevin Petersen, a local surgeon who started letting his insurance contracts expire in 2006 and has gone to a cash-pay model for his practice, No Insurance Surgery.

“Things are going to get much worse before anything gets fixed,” Petersen warns. He is concerned that the act, with its dual mandate to expand insurance and control costs, will aggravate current trends and drive doctors out of private practice. Medicaid and Medicare reimbursements, he says, are already low, and private insurers are increasingly looking to cut costs to increase profits and satisfy shareholders.

In 1986, Petersen’s average reimbursement was $1,800 for a hernia operation, a procedure that makes up a good portion of his business. In 2006, it was $350. The only way he could keep his business going was by doing high volume, he says—and, for a physician in his 50s, that was becoming more difficult.

“I just don’t have it in me to do that anymore,” he adds.

With No Insurance Surgery, he charges about $5,000 for all costs associated with a hernia surgery—including anesthesia, hospital facilities and lab work. The price is particularly attractive to patients with high deductible plans. And the workload of about 40 surgeries a month is half to a third of what he did with insurances carriers. Petersen doesn’t see other doctors flocking to the no-insurance niche market though. It’s simply too small.

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There are, however, provisions in the plan that will help reimbursements for primary-care doctors. About $3.5 billion is allocated for 10 percent Medicare reimbursement increases between 2011 and 2016; and Medicaid reimbursements, which are quite a bit lower than Medicare, are set to increase to at least Medicare levels in the next couple of years.

The thinking is that with more invested at the front end of someone’s care, overall system costs can be saved with lower specialist and emergency-care needs.

In March 2010, about the time the act was passed, John Packham, director of Health Policy Research at the University of Nevada School of Medicine, published a study called Physician Supply, Education and Retention in Nevada and Neighboring States. According to the report, the state ranked 45th in active physicians per 100,000 in population with 195; the national average was 255. For primary-care physicians, Nevada was No. 46, with only 71 doctors per 100,000 people, compared with national average of 90.

Packham said the recession’s slowing of population growth in Nevada has helped ease the shortage. But with an aging population and an economy that will eventually turn around, the shortage will become a bigger issue.

Fueling concern is a declining number of medical students in the state. In Packham’s report, there were 10 residents and fellows in graduate medical education programs per 100,000 in population, compared with a national average of 36. Only six residents per 100,000 were in primary care; the national average is close to 14. As the primary-care shortage intensifies—the result of too many doctors leaving the field and too few entering it—a growing workload will increasingly fall upon physician’s assistants and nurse practitioners.

What also remains to be seen is the impact of the plan’s proposal to implement scholarships and loan-repayment programs to encourage medical students to go into primary care. And what will the focus on improving primary mean for specialists and surgeons such as Petersen?

We may see doctors moving from private practices—where they must deal each day with billing issues and reimbursements—to salary-paying medical groups or hospital systems, says Dr. Howard Baron, president of the Clark County Medical Society and a 19-year practicing pediatric gastroenterologist.

On some fronts, Baron is optimistic. He says a good, but costly, side to the reform is already under way. Doctors’ offices have been updating patient records systems to establish a Health Information Exchange. Baron himself has put about $100,000 into his own system. The program, when fully functional, will eliminate a lot of guesswork with new patients, as their medical history will be accessible through a central system. The Affordable Care Act rewards doctors who update their systems with higher Medicaid reimbursements and penalizes those who don’t with lower reimbursements. While the cost is high, Baron said the change would improve the coordination of health care.

Packham is not convinced that the new law would spark a broad exodus from the medical field—all those years of preparation make it hard to just quit. And, in a best-case scenario, expanding insurance coverage across the state should be good for a doctor’s business.

Decisions may vary by age group, Baron says. Older doctors may opt for early retirement instead of dedicating more resources to their business. Those who are in the middle part of their career or younger will probably consider joining a medical group. The pediatric specialist remains curious about the next generation of doctors entering the field today. Will they have the same entrepreneurial streak his generation had? Or will joining a medical or hospital group be enough for them?

“Medical students and residents in training today,” he says, “have a very different outlook and expectations of life and medicine than those of us who started 20 years ago.”