The really challenging question about health-care reform is will there be physicians and clinics to take care of all this new demand for medical care?
Updated: May 3, 2013 12:14PM
Health-care reform is a fact. And in spite of some continuing congressional squabbles and legal skirmishes, the outlines are clear. More than 32 million Americans will be able to buy affordable health coverage when the program gets going in 2014. In fact, they will be required to carry insurance.
Many people will be covered even sooner. The government is going to set up a $5 billion insurance subsidy program in the next 90 days, to cover those who are uninsurable because of a previously existing medical condition.
Immediately, children under age 19 will receive coverage because they cannot be disqualified from insurance as a result of a pre-existing condition. And young adults can stay on their parents' policy until age 26.
State Medicaid-funded programs will now be told to cover an additional 16 million low-income people -- a mandate that does not come with federal funding, and which will have a huge impact on states currently struggling with budget deficits.It's not just the money
The obvious question is: Where will we get the money? The Congressional Budget Office finagled the numbers, subtracting money from payments to doctors who see Medicare patients, and making deep cuts in the Medicare Advantage program, which is a successful HMO for seniors.
Congress has promised to raise taxes on those who currently have good health-care plans, which will result in higher premiums. Plus they'll increase taxes on everything from earned income to investment income to come up with money to subsidize this new health-care reform.
But ultimately, just as with all other promises, the government will resort to "printing" the money -- creating new credit to pay off on all these promises.
As obvious and frightening as that prospect is -- leading to inflation and higher interest rates -- it's still not the scariest question.Where are the docs?
The really challenging question is: Will there be physicians and clinics to take care of all this new demand for medical care?
In a free-market society, you could be sure that higher prices would certainly be an incentive to create more neighborhood health-care clinics. The chance to serve profitably all these new patients would create incentives for more people to go into the medical profession.
But remember, most of these new patients will be covered by programs created by the government -- programs that set limits on reimbursement for services.
Already, seniors are learning that physicians are simply "not taking on any more Medicare patients at this time." Quite simply, the current Medicare program doesn't pay enough to cover the cost of care, plus the administrative costs.
State Medicaid programs are already in dire straits. Hospitals, physicians and clinics are waiting months for the state to pay its bills. Are they willing, or able, to accept more Medicaid patients?
The real issue is whether there will be enough trained health-care professionals to meet the new demand.
Dr. Russell Robertson is chair of Family and Community Medicine at Northwestern University Feinberg School of Medicine. He has advised Congress and the Department of Health and Human Services on issues related to physician supply and distribution. And he is working on a program to expand training of physicians and assistants in family medicine.
Dr. Robertson is very concerned about who will care for the influx of new patients who now will have insurance coverage: "We now have only four years to make sure that we have enough health-care providers to actually deliver on that promise as at the present, we are in short supply. . . . This is a special challenge in Illinois as we do not yet know the effect on physician supply after the state Supreme Court's lifting of the medical malpractice caps."
After the applause stops, the reality will set in. It's not the cost; it's the access. We aren't rationing health care. But we're surely going to be rationing access to physicians and medical services unless we create some incentives to increase the supply of healthcare providers. And that's The Savage Truth.
Terry Savage is a registered investment adviser.