USA: physician practices are sinking

A Cadillac Eldorado (right pic)

As more and more patients can’t pay their medical bills or see the doctor only when absolutely necessary, more physician practices are sinking economically. This factor, much more than government pressure to buy electronic health records, is what’s forcing a growing number of physicians to give up private practice and go to work for hospitals.

David Boles, a family physician in Clarksville, Tenn., isn’t one of them, but his practice is having an increasingly hard time. “We’re dying, man,” he tells BNET. “It is hard out here right now.” Although there’s been a bit of an uptick in business recently, he says, “last year the number of patient visits was way down. What people are doing is they’re saving up bunches of things to talk to a doctor about in one visit. So they’re decreasing their number of visits per year. Patients come in for the follow-up on five chronic conditions and they want their preventive exam done the same day. And if a physician spends an hour with a patient, he can’t be paid enough by the insurance companies to warrant an hour’s work.”

This isn’t an isolated complaint. One cardiologist told The New York Times that his practice was unable to collect anything from 30 percent of its patients because their out-of-pocket expenses for healthcare were so high. And it’s estimated that, overall, about 30 percent of people under 65 are either uninsured or have a “high burden” of health costs, defined as exceeding 10 percent of their incomes.

This statistic comes from a Health Affairs study that looked at the increase in Americans’ out of pocket health expenses from 2001 to 2006. During this period, the study showed, the percentage of people with high out of pocket expenses — including premium costs for those who were insured — rose from 14 percent to 19 percent. Given the big increase in insurance and healthcare costs since then, and the rising number of uninsured, that percentage is probably much higher today.

Another key finding of the study is that increasing out of pocket costs hit insured middle-income people the hardest. While that’s counterintuitive, it reflects the fact that the poor get much less care than middle class people do. If you’re uninsured and you don’t see the doctor until you hit the ER with a serious problem, your out-of-pocket medical expenses aren’t that high. Neither, though, is your life expectancy.

What’s really sobering is that even an economic turnaround won’t help many people afford healthcare, the researchers say:

A return to robust economic growth and declining unemployment alone will not reduce the financial stress on Americans resulting from high health expenditures. Although attention has been focused on rising health care costs, the fact that real median household income remained largely unchanged between 2000 and 2007 — hovering at about $50,000 — was an equally important contributor to increasing financial burden. To stop and reverse the ongoing increase in the number of families with high health care cost burden, strong economic growth must be accompanied by both increases in family incomes — which have been rare during this decade — and more moderate increases in health care costs.

So here’s the Catch-22: To hold down out of pocket health expenses — a key problem for patients and physicians alike — the economy must grow fast enough not only to increase employment but also to raise wages. Yet the stubborn problem of health spending growth is one of the main factors depressing wages and limiting job expansion.