• Revenue Cycle Management
  • COVID-19
  • Reimbursement
  • Diabetes Awareness Month
  • Risk Management
  • Patient Retention
  • Staffing
  • Medical Economics® 100th Anniversary
  • Coding and documentation
  • Business of Endocrinology
  • Telehealth
  • Physicians Financial News
  • Cybersecurity
  • Cardiovascular Clinical Consult
  • Locum Tenens, brought to you by LocumLife®
  • Weight Management
  • Business of Women's Health
  • Practice Efficiency
  • Finance and Wealth
  • EHRs
  • Remote Patient Monitoring
  • Sponsored Webinars
  • Medical Technology
  • Billing and collections
  • Acute Pain Management
  • Exclusive Content
  • Value-based Care
  • Business of Pediatrics
  • Concierge Medicine 2.0 by Castle Connolly Private Health Partners
  • Practice Growth
  • Concierge Medicine
  • Business of Cardiology
  • Implementing the Topcon Ocular Telehealth Platform
  • Malpractice
  • Influenza
  • Sexual Health
  • Chronic Conditions
  • Technology
  • Legal and Policy
  • Money
  • Opinion
  • Vaccines
  • Practice Management
  • Patient Relations
  • Careers

No good deed goes unpunished


The author says his group has been penalized for opening its doors to all patients.



No good deed goes unpunished

By Barry J. Bacon, MD

The author says his group has been penalized for opening its doors to all patients.

After spending three years in Africa as a medical missionary, I was delighted to find a multispecialty group in rural northeastern Washington whose mission was to care for the entire community regardless of patients' insurance.

The group has always operated without much of a financial cushion, since 60 percent of our charges—17 percent Medicaid, 33 percent Medicare, and 10 percent uninsured—are reimbursed at a level that doesn't cover our costs. So, like most physician groups, we've shifted costs to private payers to make ends meet.

But 2 1/2 years ago, the thin ice we were skating on broke through. The insurance intermediary running the Medicare HMO went bankrupt, and we lost a half million in revenue—and all of our reserves.

In retrospect, this debacle wasn't surprising. Ignoring the Medicare reimbursement level in our state, the HMO intermediary offered us an artificially high rate to see Medicare patients. During that two-year contract, we continued to run our practice as usual and upped salaries and benefits to meet market demands. So when the intermediary folded, not only did we have to write off our unpaid accounts receivable, we could no longer sustain practice expenses.

Our only choice was to trim costs drastically. That meant longer workdays and less pay: Physicians had to take a 10 percent pay cut, and work 4 1/2 days per week instead of four and at least six hours a day in the clinic, up from five. (We do a lot of procedures in the hospital.) Doctors who chose to work fewer hours were docked 8 percent of their pay, and those who took more than six weeks of vacation forfeited $600 per extra day.

We also increased productivity quotas. Still, even with increased production, the mean salary of an FP doing OB in our group was $117,000—27 percent less than the national mean salary of $161,000, according to the Medical Group Management Association. And although we cut five staff positions, reduced benefits, and froze wages, we lost $160,000 last year.

There was a solution, but not a palatable one. We could simply refuse to see Medicare and Medicaid patients and cut our physician roster by 17 percent, thereby creating an access problem. The government might then designate our town as a health professional shortage area (HPSA) and build a clinic. Ironically, physicians in these federally qualified clinics get paid $84 per Medicare visit instead of the $41 we've been getting for the same visit. In reimbursing their own health centers at a higher rate, the government shows what the reasonable costs really are—in contrast to what they've been paying us.

Why is it that our federal and local governments pay 100 percent of costs—and then some—to businesses to build bombs or ballparks, while physicians and hospitals must plead for payment and justify services in order to receive less than reasonable reimbursement? We, too, are legitimate American businesses, and don't deserve to be ripped off.

What are the priorities of government if not to first provide for the welfare of all citizens? Yet by underfunding Medicare and Medicaid, the government is forcing physicians and their employees to either subsidize that care or turn away patients without private insurance. Although the government claims to enable us to fulfill our mission to the poor and elderly, it is, in fact, our nemesis. Who invented this idiocy?

We've pleaded our case to legislators on the local, state, and national level. We've cut costs to embarrassingly low levels and let maintenance of our clinic slide. We've told the hospital that we'll no longer volunteer for committees. We've discussed selling some of our assets to form a foundation with our regional hospital system. And, in desperation, we've discussed closing the door to Medicare, Medicaid, and the uninsured.

Fortunately, it looks as though the last measure won't be necessary. We've recently been granted rural health clinic status, which will add $900,000 to our coffers for providing the same services we do now. We still won't be paid as much as a federally qualified health center, but the reimbursement will meet our costs, which is all we want. With the increase in reimbursement, we'll raise our employees' pay to meet market salaries, and doctors will get an 11 to 12 percent salary increase, bringing us back to where we were two years ago.

We are doing what we need to do in order to survive. But our group will never be the same because physicians will now wear a more cynical shell. And this, I fear, will be our greatest loss.

The author is a family physician in Colville, WA.


Barry Bacon. No good deed goes unpunished. Medical Economics 2002;9:136.

Related Videos
Jennifer N. Lee, MD, FAAFP
© National Institute for Occupational Safety and Health
© National Institute for Occupational Safety and Health
© National Institute for Occupational Safety and Health
© National Institute for Occupational Safety and Health
© National Institute for Occupational Safety and Health
© National Institute for Occupational Safety and Health