• Quote: What bending the cost curve looks like

    Many doctors are disturbed they will be paid less — often a lot less — to care for the millions of patients projected to buy coverage through the health law’s new insurance marketplaces. […]

    Insurance officials acknowledge they have reduced rates in some plans, saying they are under enormous pressure to keep premiums affordable. They say physicians will make up for the lower pay by seeing more patients, since the plans tend to have smaller networks of doctors.

    Roni Caryn Rabin, Kaiser Health News


    • The potential problems Ms. Rabin describes (a two-tiered system, a shortage of primary care physicians, etc.) may all be true but they are transitional problems not permanent problems and are more a political problem for Obama and other supporters of Obamacare than a medical problem. To say that Obamacare will cause a shortage of doctors is to say that Obamacare will cause people to get sick, which is preposterous. But Obamacare will cause a re-distribution of doctors, from those who have received more health care to those who have received less. And that’s the political problem. When my sister was diagnosed with cervical cancer years ago, I called several oncologists I know for a referral to the best sub-specialist. To my surprise, the best-known sub-specialist was located in the low country – I had expected him to be in a large city. Why the low country, I asked skeptically? Because that’s where the patients are. No, not because women in the low country are more susceptible to cervical cancer, but because there are so many poor women who don’t get regular health care. Once Medicaid came to the low country, there was an explosion in the number of cervical cancer cases, Did Medicaid cause these women to suffer cervical cancer? Of course, that’s preposterous. But it did result in the re-distribution of this sub-specialist’s services to the low country. And, in time, that’s what will happen in response to Obamacare.

    • If this is sustained, it’s good news for other countries too. The US is the destination labor market for for a lot of foreign doctors, especially those looking to maximize income. Even if they still migrate, it may help keep physician costs in other countries down. I know: speculative.

    • Why is the default “They will make up for the lower pay by seeing more patients”? Why won’t doctors choose to continue their current practice and earn less? Why is the anchor seen to be the current pay, rather than the way the doctor currently cares for their patients?

      If doctors were solely motivated by money, they would already be seeing more patients and earning more money.

    • There are two problems I think with Austin’s conclusion:

      1. As the article mentions, if doctors choose to increase volume (which they can do and in the past, have shown themselves willing to), then the net cost to the system will be significantly higher.

      This is especially pertinent if doctors continue to play the game of “Pass the patient along” to another specialists that has become common with lower per patient rates. In other words, we could (and have in the case of some specialties like allergists) end up with a situation where the payor (the taxpayer in many cases) pays twice for the same illness and ends up a bigger loser than before.

      2. Net physician compensation is ~8% of the total spend and has remained relatively constant or lower (in inflation-adjusted terms) over the last 15 years. Focusing on the one part of the system that is actual not growing that quickly is not a convincing demonstration of bending the cost curve.

      Instead, it seems more like envy of physician pay in which case, I would suggest the much simpler solution of forcing CMS cuts on physicians.