Why are many doctors dropping out of Medicare?

One reason has to do with some of the additional regulatory restrictions under the Affordable Care Act.

One in particular prohibits doctors from referring Medicare patients to hospitals in which they have an ownership in. This provision wasn’t intended to increase transparency as much as it’s designed to prevent the increased usage of ambulatory surgery centers. You see, the problem isn’t with doctor’s ‘double dipping’ or getting paid for both the treatment fee as well as the facility fee. Looking at the auto industry, when you get an estimate from a mechanic to repair your car, auto insurance companies don’t mind if you go to that mechanic’s shop knowing full well that he owns it. The same is true in the health industry; health insurance companies don’t mind doctors referring patients to their own centers. The reason being is that often times the level of service is much more efficient and can be less costly.


It shouldn’t matter which facility is getting paid, as long as the true price is what has been agreed to and the services have been rendered according to accepted quality standards. So why is the government restricting doctors from referring to their own surgery centers – it’s to protect existing hospitals.


You see, for elective treatments, many hospitals don’t operate as efficiently as surgery centers do which is why most doctors and patients prefer using them. Historically, when customers are flocking to emerging competitors who are offering a better, less costly alternative, and the government intervenes to protect the existing troubled businesses, the consumer almost always loses. And in this case it will be the seniors who may need the care the most, who will ultimately lose.


Instead of determining where patients can and cannot be treated, Medicare reform should be focused on better patient care, better cost alternatives, and better incentives for physicians to accept these patients.




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