Memo from the Editor

September 2, 2005

Is this any way to run a business?

Next issue we'll reveal the results of our latest survey on physician income, and the picture isn't pretty. Primary care physicians' total compensation is flat for the third year in a row and now specialists are struggling to keep up with the cost of living; some are losing the fight.

The big question is not why it's happening now, but why it didn't happen sooner. No other business in the country is forced to operate under the economic constraints that physicians in private practice have had to endure for nearly two decades. No other business in the country has its ability to price services and deal with customers curtailed by both big business and big government. No other business in the country is expected to operate successfully without knowing how much it will be paid for its services.

Yet that's just what doctors must endure. Health plans won't reveal what they pay or how they calculate payment. It's possible to be paid different amounts for the same service under the same contract by the same payer. Medicare's reimbursement formula is consistent, but it's based on mind-numbing calculations that factor in a variety of parameters including changes in the GDP over a decade. Of late, those calculations have determined you deserve less money than you got the year before. The cut is 4.3 percent for 2006. Year after year, physicians live on edge, until Congress steps in at the last minute to offer a reprieve. What business can run that way?

The mind boggles. What's the physician-businessman to do?

Organized medicine is making itself heard on both the private health plan front and on Medicare, but the various groups don't always speak with one voice. You can join your individual voices by writing your legislative representatives.

The chair of the House Ways and Means health subcommittee has introduced a bill that throws out the current Medicare reimbursement system and includes voluntary participation in pay-for-performance, but the overall price tag for reform of the system may be too much for legislators approaching a 2006 re-election campaign to swallow. Again, you can write your representatives.

But, in the end, there may be nothing the doctor-businessman can do but leave the business. Maybe then big business and big government will take notice and give physicians the same leeway to run their business enjoyed by every mom-and-pop flower shop and deli in America.