It will force doctors to accept less in payment for their services. The market will react in kind. As Reason’s J.D. Tuccille explains:
The Obama administration’s argument for reducing reimbursements for providers who see Medicaid patients was made very succinctly in a California courtroom:
“There is no general mandate under Medicaid to reimburse providers for all or substantially all of their costs.”
The administration makes its argument in a case challenging California’s decision to reduce Medicaid reimbursements by 10 percent. Note that if you don’t reimburse sellers of goods and services for “all or substantially all of their costs” you are presumptively asking them to lose money on the deal. Unsurprisingly to everybody except government officials, providers tend to stop providing under such circumstances, if only to avoid bankruptcy, or else because they’re going through it.
As it happens, California already has a shortage of willing providers, and is looking at expanding the roles of nurse practitioners, pharmacists and other medical practitioners to try to fill the gap. But there’s no particular reason to think that other providers are more prone to financial martyrdom than are physicians. They have to cover their costs, too.
The problem isn’t confined to California. A study published October 12 in the American Journal of Medical Quality found that the ranks of “safety-net physicians” — those willing to see Medicaid and uninsured patients —appears to be at its limit under current circumstances.
The senior author of the study, Eric G. Campbell, PhD, of the Mongan Institute, commented, “This study raises very serious concerns about the willingness and ability of primary care providers to cope with the increased demand for services that will result from the ACA.”
This tracks with what my own doctor, Michael Trahos, a boardmember of the Medical Society of Northern Virginia, told me while we were chatting during my last check-up. He said the existing Medicare reimbursement rates were already driving many general practioners out of the field. They’re becoming specialists instead.
People think of doctors as rich, but the young ones have staggering medical school bills to pay off, Trahos noted. Plus, if they have their own practice they are also small businessmen who already feel swamped dealing with the existing regulations. He predicted that Obamacare would make general medicine a less and less attractive field for new doctors. Older ones like him would simply retire. That means a serious shortage of doctors in the coming years.