The Fourth Obamacare Shock Wave Is about to Reach Us

Obamacare is intensifying the doctor shortage — but not in ways that were anticipated.
November 13, 2013 • Commentary
This article appeared in Forbes​.com on November 13, 2013.

Obamacare is intensifying the doctor shortage — though not in ways that were anticipated.

Everybody seems to have expected that Obamacare would sign up some 30 million people who don’t have health insurance, and they would overwhelm doctors’ offices. But these people — especially the young and healthy whose sky‐​high Obamacare premiums were supposed to finance everybody else’s subsidies — have stayed away. They know a bad deal when they see one.

Although the young and healthy aren’t going for Obamacare, the doctor shortage is intensifying, because government intervention generally is making it more expensive and difficult for doctors to do their job.

Government‐​run Romneycare — the model used for Obamacare — was enacted in Massachusetts in 2006, and a recent survey by the Massachusetts Medical Society found that half the state’s primary care practices aren’t accepting new patients. At practices accepting new patients, the average wait to see a family physician is 39 days, and the average wait to see an internal medicine physician is 50 days.

Because so many people in Massachusetts don’t have a doctor, there has been a sharp increase in the number of emergency room visits. Stressed‐​out emergency room nurses are talking about possible strikes.

Medicare has multiplied the number of people who can’t see a doctor. Medicare reimbursement rates are about 40 percent less than private insurance reimbursement rates. Consequently, according to the Centers for Medicare and Medicaid Services, the number of doctors who no longer accept Medicare patients has tripled during the last three years.

Only about half of doctors accept new Medicaid patients, and the number appears to be declining as a consequence of lagging reimbursement rates, long reimbursement delays and high administrative burdens associated with Medicaid patients. Yet Obamacare is rapidly expanding the number of people on Medicaid.

Obamacare reimbursement rates are lower than Medicare. Obamacare has a special disadvantage, too: a 90‐​day grace period. This means people can buy an Obamacare policy, have costly procedures done and then cancel the policy within 90 days. If the cancellation comes during the first 30 days, the insurer is responsible for trying to collect payment, but after that, doctors are on their own. They would have to spend time and money chasing patients for payments. California Healthline reported that deadbeats “would not receive a fine, a premium rate increase or a repayment order. They also would not be barred from purchasing another subsidized plan during the next enrollment period.” No other type of health insurance has a 90‐​day grace period like this.

Missouri Hospital Association CEO Herb Kuhn and Missouri State Medical Association Executive VP Thomas Holloway warned that that the policy “puts doctors at an unfair and significant risk for providing uncompensated care to patients.”

Doctors are worried about potentially huge liabilities as they try to comply with Obamacare’s mandate to digitize medical records. Computer errors relating to test results, medication doses or other crucial information could have terrible consequences for doctors as well as patients. Medical records software tends to be complicated and not always reliable. Sometimes software vendors are no help. With fully‐​booked schedules, doctors have difficulty finding large chunks of time needed to deal with software‐​related Obamacare deadlines.

Most doctors who don’t accept Obamacare, Medicare or Medicaid serve patients with private group health insurance provided by their employers. This applies to about two‐​thirds of the population under 65 — almost 160 million people. However, that market is expected to shrink as many employers dump their plans, because it can be cheaper to pay penalties than to pay Obamacare premiums.

More primary care doctors are likely to go off private insurance networks as well as Obamacare, Medicare and Medicaid, transitioning to concierge arrangements. These involve paying an annual fee — often ranging from $1,500 to $2,500 — for access to doctors. Patients can get immediate appointments, they spend more time with doctors, and a comprehensive physical might be included. Concierge medicine offers participating patients and doctors welcome relief from frantic assembly‐​line practices, but it dramatically reduces the number of patients served — perhaps as much as 80 percent. One doctor, for example, reduced his patient load from about 2,600 to about 550.

Some doctors go off networks and continue their usual routines, but they accept only cash, checks or credit cards. Such doctors seem to cut their prices about 50 percent, since they don’t have all the billing paperwork and the staff needed to handle it, and they don’t wait months to get paid by Obamacare, Medicare or Medicaid.

Meanwhile, major health insurance companies are dumping doctors from Medicare Advantage networks. Among the most recent cases was United Healthcare that announced its decision to cut some 2,250 doctors in Connecticut — about 19 percent of the network total.

This was the occasion for a tumultuous town hall meeting in affluent Westport where a parade of Democratic politicians — headed by Connecticut’s senior U.S. Senator Richard Blumenthal — piled on the insurance company, calling it arrogant, greedy and unconscionable.

During this two‐​hour gathering, none of the politicians acknowledged that they wholeheartedly supported Obamacare. Nor did they mention the real reason the docs were dumped. Namely: Medicare Advantage involved subsidies enabling many people to have policies for zero premiums. Obamacare called for cutting those subsidies 85 percent, so the funds could be re‐​directed to subsidize Obamacare — part of a $500 billion transfer of funds from Medicare to Obamacare. All this was known three years ago when Obamacare was enacted. The AARP certainly knew about it when they promoted Obamacare.

Lawyers representing the Fairfield County Medical Association and the Hartford County Medical Association conceded that by taking money out of Medicare, specifically cutting Medicare Advantage subsidies, Obamacare prompted the doc dumping. The lawyers wrote, “By terminating numerous physicians from the Medicare Advantage networks, United seeks to stem financial losses occasioned by reduced federal payments.” What in the world did lawmakers think would happen when they voted for Obamacare?

That’s not all. Obamacare authorized the Centers for Medicare and Medicaid Services, a bureaucracy in the Department of Health and Human Services, to rate Medicare Advantage plans. High‐​rated plans entitled insurance companies to collect bonus payments from Medicare. United Healthcare reportedly collected $540 million of such payments in 2012.

Administration officials decided on more than 50 performance measures and 5 different rating systems: the Healthcare Effectiveness Data And Information Set (HEDIS), Consumer Assessment Of Healthcare Providers And Systems (CAHPS), Health Outcomes Survey (HOS) and Independent Review Entity (IRE), as well as the Centers for Medicare And Medicaid Services (CMS). All this is a fancy way of saying government officials, not doctors and patients, are increasingly shaping key decisions about health care — not least, which docs are dumped.

What might Obama do amidst a tsunami of protests from angry multitudes who don’t have access to a doctor, regardless whether they have health insurance?

Obama might try to intimidate doctors like he intimidated Chief Justice John Roberts into switching his vote to uphold Obamacare. Doctors should brace themselves for the same kind of venomous denunciations that Obama has aimed at millionaires and billionaires.

Since Obama is an avowed progressive, and previous progressive presidents have given us compulsory measures like government monopolies, income taxes and military conscription — he might consider using force with doctors. Perhaps an executive order establishing a doctor’s mandate to serve a minimum number of Obamacare patients as a condition for renewing their medical licenses. Obama could cite the fact that we’re in a state of emergency, originally declared by President George W. Bush on September 23, 2001, renewed in 2012 and most recently extended by Obama on September 18, 2013.

But this could backfire, because the average age of doctors is about 56, which means the most likely outcome would be a surge of doctor retirements.

The worsening doctor shortage looms as the fourth Obamacare shock wave, following the $650 million website that didn’t work, cancelled insurance coverage threatening millions and sticker shock from Obamacare policies costing perhaps double what people had paid for the private insurance policies they liked and were promised they could keep. Such shock waves have led to the downfall of seemingly invincible regimes.

About the Author