The old issue of fairness

A recent article in Forbes caught my attention. Here is the link.

Essentially, the writer is pointing out the unequal treatment given to physicians compared to hospitals.

Of the close to 5000 hospitals about 4000 are non-federal acute care and of these 62% are ‘not-for-profit’ (NFP), which is a state issued designation and 501c3 tax-exempt, which is federally issued by the IRS. So, this subset pays no property, sales, state or federal income tax. When Medicare law was signed, these hospitals were asked to care for the poor and indigent. This is supposed to be documented on the 990-tax form all hospitals file with the IRS.

The writer says all the free care calculated is based upon the chargemaster retail price list not the Medicare or Medicaid reimbursement. He points to the chargemaster price of $25,000 for a chest pain diagnosis instead of the $3500 paid by Medicare. The exact ratio of net income to charity care is not established nor is there real agreement on what constitutes ‘charity’ care!

What bothers most physicians is that we render millions of dollars of free care and ‘write’ it off. There is no deduction for that care. The NFP and tax- exempt label allows hospitals to pay their executives large amounts (within reason) and carry out competitive activity to the detriment of practicing physicians. Hospitals use that tax-free money to build towers, buy practices and employ physicians to compete with non-employed local physicians with loads of cash in their pockets.

This is all legal of course. But, why? Physicians are divided into specialties and busy fighting each other. The AMA has become toothless for the most part and when it is at the table, does not represent specialties. Furthermore, the American Hospital Association (AHA) is large and lobbies effectively. They are simply following the rules and speak for their members, large and small.

Now, with > 50% of physicians employed by health systems it is unlikely that power in Congress is likely to shift to physicians in the near term. The ACA also helped with physicians shifting to employment. The new medical graduates, not having known self-employment, will look at their employed situation as the norm.

As I grow older I just want my physician or surgeon treating me to give me the best medical care and not be bound by the bottom-line approach that may worsen. There could also be a backlash from the loss of autonomy, bureaucracy and top down control.

Is that being too optimistic?