Obamacare—Past, Present, and Future, Part 4 November 28, 2012 Health Care Reform, Physician Resource, SFMS Member Affordable Care Act, Obamacare 0 By Andy Calman, MD, PhD Note: This article was originally published in the October 2012 issue of San Francisco Medicine. Due to members' request for more information on health care reform and its impact on medicine, SFMS is publishing a four-part series in the SFMS blog section. Click here to read Part 3 of this 4-part series on Obamacare and its impact on U.S. physicians and patients. How Is Obamacare Paid for? The main new source of revenue for Obamacare has nothing to do with Medicare. Beginning next year, there is a new 3.8% tax on “unearned” income, such as capital gains, dividends, and interest income, for those with total incomes over $200,000 per year ($250,000 for couples). This is coupled with a 0.9% increase in the Medicare tax on earned income over $200,000/$250,000. These new taxes on upper-income taxpayers, though receiving little ink or airtime, are among the most important reasons why Obamacare has been targeted for repeal. Other, smaller sources of revenue are a 40% excise tax on so-called “Cadillac” health plans (those having premiums over $27,500 per family); taxes on the pharmaceutical, insurance, indoor tanning, and medical device industries; and limitations on cafeteria-plan and health expense deductions. Over the next ten years, Obamacare (including its associated taxes) is estimated by the Congressional Budget Office to result in net savings to the federal government of $109 billion. However, this does not include the cost of SGR repeal, the “crowd-out” phenomenon, employment migration due to the elimination of “job-lock,” increases in medical inflation, and other factors that are inherently difficult to predict and are outside the scope of this article. Impact on Physician Practices Most physicians will be impacted by Obamacare, regardless of their specialty and mode of practice. Combined with the subsidies for EHR in the HITECH Act, Obamacare will drive medicine toward more data-driven, technology-intensive, outcomes-oriented reporting in order to be eligible for contracting and payment. This has already begun in the Medicare system with PQRI and PQRS initiatives and is spreading to the private insurance sector. Additionally, the ACO initiative will likely accelerate the trend toward practice integration and buyouts by larger entities. In fifteen months, approximately 30 million Americans will begin to enroll in Medicaid and subsidized private health insurance plans. Access problems, especially for Medicaid enrollees, are inevitable. Mandated managed care plans for Medicare-Medicaid dual-eligibles may accentuate this problem. Access problems may drive state legislation toward increased scope of practice for limited license practitioners in order to meet the increased need. It should not escape physicians’ notice that “bending the cost curve” is aimed squarely at our profession. In addition to finding new ways to limit physician compensation, Medicare and private insurers will look to physicians to limit their use of costly diagnostics, pharmaceuticals, and procedures and to justify everything we do with outcomes reporting. On the other hand, the health exchanges and subsidies will, for the first time, allow many working-class and middle-class families the opportunity to have real health insurance. We may be shocked in the next few years at the backlog of previously untreated patients who are now crowding our waiting rooms, and we may be gratified at our increased ability to provide the care that these members of our community need. The challenges posed to our profession by Obamacare are real. We will need to become more efficient in the face of increased electronic documentation requirements and declining or stable reimbursements. However, physicians are resourceful and energetic people. Just as we have met the challenges of incorporating new knowledge and techniques and found ways to make the difficult transition from paper charts to computers, we will find ways to handle the transitions of the next few years as well. Regardless of legislative and electoral outcomes, the nation and our patients need our services, and the huge, dysfunctional, but ultimately homeostatic health care economy will find ways to adjust. Obamacare as enacted in 2010 is not the final word on the subject. By staying informed and uniting as a profession to advocate for fair, responsible solutions, we can help shape a positive outcome. Dr. Andrew Calman practices ophthalmology at CPMC-St. Luke’s and teaches at CPMC and UCSF. He is past president of the California Academy of Eye Physicians and Surgeons, chair of the SFMS’s Political Action Committee, and served for many years on California’s Medicare Carrier Advisory Committee as well as the National Health Policy Committee of the American Academy of Ophthalmology. Comments are closed.
