Using published data, imagine how excited you’ll be to keep your current insurance, that’s part of your compensation package with your employer, when you get hit with a new, higher payroll deduction!

As reported by MedScape

Under the bill, employers that do not pay for at least 60% of the cost of the monthly premium for their employees’ insurance will be assessed an annual fee of $750 for each uncovered family, and $375 for each uncovered individual. The provisions wouldn’t apply to businesses with fewer than 25 employees.

From Wikipedia we learn that,

“[i]n 2008 the average employee contribution was 16% of the cost of single coverage and 27% of the cost of family coverage…[a]verage premiums, including both the employer and employee portions, were $4,704 for single coverage and $12,680 for family coverage in 2008.”

Basically, using the above averages, this means that where right now an employee averages:

Individual

$4,704 annual premium
Average cost to employee = 16% of total
Cost toward premium = $753

Family

$12,608 annual premium
Average cost to employee = 27%
Cost toward premium = $3,424

So, when employers are mandated to pay at least 60% of the total premiums, how much are you now going to pay as an employee?

Individual

$4,704 annual premium
Average cost to employee = 40% of total
Cost toward premium = $1,882
$1,129 MORE annually

Family

$12,608 annual premium
Average cost to employee = 40%
Cost toward premium = $5,072
$1,648 MORE annually

But hey, your income taxes didn’t increase, did they?  Oh, wait – taxing your health insurance value is also on the table, so that too might happen too!

Anyone still scratching their head as to why Wal-Mart is endorsing the inclusion of a public-plan in healthcare reform, you can stop scratching!

On MedScape we learn, “[u]nder the bill, employers that do not pay for at least 60% of the cost of the monthly premium for their employees’ insurance will be assessed an annual fee of $750 for each uncovered family, and $375 for each uncovered individual. The provisions wouldn’t apply to businesses with fewer than 25 employees.”

This is really interesting because, “[i]n 2008 the average employee contribution was 16% of the cost of single coverage and 27% of the cost of family coverage…[a]verage premiums, including both the employer and employee portions, were $4,704 for single coverage and $12,680 for family coverage in 2008.”

Now I don’t know exactly what Wal-Mart’s current contribution toward employee health insurance is, but if they’re within the range of the national average, Wal-Mart is going to make out fat if they just suck it up and pay the fines instead of a portion of the premiums.

If you’re Wal-Mart and you’re currently paying the average 27% toward the premiums for family coverage – $3,424 annually toward the total for an employee with family coverage – what would you do with the new regulations?

A) Suck it up and pay 60% of the premium now – $7,608
B) Cut the employees loose to pay the total themselves or go to the public plan and you pay the fine – $750

Any questions?

When I first launched this blog, I intended to write often and present various perspectives on the state of healthcare in the US.  Since February I simply haven’t had time to write, nor the inclination to make the time. 

Now, however, with the debate over healthcare reform heating up, I’m rethinking my time commitments and feel it’s important to step up and add to the discussion.

Why exactly do I think I have something to add? 

To put it simply, few seem to be willing to go beyond the talking points to dig deeper into the issues – as the wife of a doctor, I have an up-close and personal perspective that, while some will see as conflict-of-interest, might lend a different perspective than that which we’re presented with in the mainstream media. 

While some will consider my relationship to my husband a conflict-of-interest as an excuse to dismiss my thoughts, let’s not forget I also have a self-interest in the outcome of any healthcare reform for me, alone, the individual….an interest in the outcome for our son, who will likely be most affected long-term by any “reform”, as well as friends and family.  It may be easy to dismiss my thoughts because I’m married to a doctor, but don’t forget, I’m also an individual, a mom, sister, daughter and friend – so my concern isn’t simply my husband’s practice of medicine!

All of that said, I do have big concerns about how the debate is being framed, what issues are in focus while others are ignored, and how things are going to play out no matter what since there are so many players in the mix with vested interests to bargain and negotiate with.  It’s these things I plan to write about most.

I hope you’ll return to engage and comment, leave your own ideas and perspectives – if healthcare reform is open to debate, all opinions are welcome!  I won’t tolerate attacks on others – stick to the issues and express your thoughts without ad hominem, OK?

Imagine for a moment you’re a doctor, getting ready to finish up your residency and head out into the big world of medical practice. 

You want to do OB/GYN, in Miami, FL and decide maybe it’s a good idea to see what starting your own practice will cost. 

Are you ready?

  • 2,000-square foot office in Miami, $20 per square foot, $40,000 per year
  • Medical malpractice insurance, $275,000 per year
  • Medical Office Manager, with some experience, $75,000 per year ($80,750 when you include mandatory matching for social security and medicare taxes)
  • Registered Nurse, with some experience, $85,000 per year ($91,500 with matching social security and medicare taxes)
  • LPN or CMA, with some experience, $45,000 per year ($48,500 with matching social security and medicare taxes)
  • FT Receptionist, with some experience, $30,000 per year ($32,295 with matching social security and medicare taxes)
  • PT Receptionist, with some experience, $20,000 per year ($21,530 with matching social security and medicare taxes)
  • Billing, Collection & Transcription, with some experience, $40,000 per year ($43,060 with matching social security and medicare taxes)
  • Health insurance for staff & yourself, with you paying 80% of cost for staff, $35,000 per year (if you’re lucky!)
  • 401(k) contributions, you guarantee 3% a year, $8,850 per year
  • CME reimbursement for medical staff, $1000 per year
  • CME for maintaining medical license for physician, $2500 per year
  • Medical Supplies, $12,000 per year
  • Capital Equipment (not start-up equipment, but annual capital equipment), $25,000 per year
  • Legal fees, $1200 per year
  • Accounting fees and tax prep, $2400 per year
  • Utilities and office maintenance, $15,000 per year
  • Non-medical office supplies, $6,000 per year
  • Professional dues, $1200 per year
  • Business insurance and licences, $3600 per year
  • Software licensing, $2400 per year
  • Advertising, $12,000 per year
  • Miscellaneous expenses, probably around $6,000 per year

Setting aside the cost of all the equipment you’ll need to start your practice, your annual expenses, before you can even think of paying yourself, must exceed $766,785 each year, with the overall average increase each year of no less than 5%.

If you have a good year your first year in private practice, you can expect to deliver 200 babies, with 1400 appointments for care, delivery and post-delivery follow-up, and see additional non-pregnancy related patients in approximately 1200 office visits, of which 200 will be billed as new patient visits, 200 as prenatal first visits, and 1000 as routine office visits with or without additional procedure codes as part of the billing.

Not bad for a first year doc going into private practice!

So, based on reimbursements by insurance companies, medicaid and private paying patients, how much can you expect to pay yourself?

Let’s do math!

200 pregnancies, of which you hope to take 20% as medicaid patients (40 patients) and roughly 10% will be self-pay (20 patients).

Of the 160 with private insurance, 75% (120 patients) will statistically be “low-risk” and you’ll be reimbursed $3,244 per patient; 25% (40 patients) will be statistically “high risk” and you’ll be reimbursed $5,153 per patient.  All totaled, these pregnancies will provide a potential $389,280 from your low-risk patients and $206,120 for taking care of your high-risk patients.  Combined this is $595,400.  But don’t get too excited yet, the average medical practice can only collect 62% of their billings to insurance companies, so it’s likely you’ll only collect $369,148 for your services.

The 20% of patients covered by medicaid won’t be a collection problem as long as you have patience.  Statistically your medicaid patients will be a 60/40 split for low-risk and high-risk and you’ll receive $1,500 for each low-risk pregnancy and $2,000 for each high-risk pregnancy.  With 40 patients covered by medicaid, you’ll be reimbursed $36,000 for the 24 low-risk patients you take care of, and $32,000 for the 16 high-risk patients.  Combined you’ll receive $68,000 for their care.

Of the 20 patients you see whom will pay themself, for whatever reason, you’ll likely bill each $4,000 and collect 60% on average, or $48,000 for their care.

In total, the 200 babies you delivered will generate $485,148 of revenue for your practice; an average of $2,425.74 per pregnancy.

Ooops, wait a minute!

Your practice costs $766,785 a year before you even can pay yourself.  You’re still in the hole for $281,637 and haven’t taken any salary yourself!

We haven’t yet considered your other patients and their office visits, have we?  Those 300 other patients you hope to provide medical care to that is not related to pregnancy.

On average, those patients will bring your practice an additional $300,000 in revenue for everything from reimbursement for new patients, annual exams, general complaints and other services you can bill for – so it’s possible you can cover your expenses, but it’s impossible to pay yourself after you’ve met your overhead obligations.

You still can’t afford to go into private practice, because you only have $18,363 left to pay yourself after paying all your expenses!

You go into wishful thinking mode – maybe you can find a top-notch billing person and collect above the national average?

Even in the most ideal situation, if you managed to hire a top-notch collection superstar, who managed to collect 70% of your billings from insurance, well above the average for private practice physicians, you’d see $832,780 in revenue collected, leaving just $69,995 left to pay your salary, matching social security and medicare, and mandatory 3% into your 401(k) account.

A paltry $69,995 left, with a potential to pay yourself $63,605 since your 401(k) needs $1800 and matching social security and medicare is another $4600. 

After paying your income taxes, you’ll take home $52,000, or $4333 each month.  Once you pay your student loan payment of $1680 each month, you’ll have $2653 left to try to live on. 

Good luck finding the superstar to collect well above the national average and then better luck figuring out how to live on just $2,653 each month in Miami, FL!

You managed to pay your malpractice carrier 4.3 times more than you paid yourself. 

Welcome to the real world Doc!

The word “profit” comes from the Latin, to make progress. 

Profit is the difference between the price something sells for and the cost of bringing to market whatever is sold, be it a product or service. 

Within the healthcare debate, we’re told profit is bad, it is a dirty word, it must be eliminated from our healthcare system so that we can deliver quality healthcare to all Americans.

The problem is one of semantics; any business endeavor, whether it is classifed as “for-profit” or “non-profit,” must generate enough revenue to meet its financial obligations like operating expenses and salaries. 

In the for-profit business model, revenues that exceed the cost of doing business are “profits”, whereas the same excess in the non-profit sector is termed “surplus”. 

No matter what you call it, it’s the same thing, more money in than money going out. 

The damning of profit however is an extremely effective way to terminate any discussion of alternatives or options to the current system we have because no one from within the healthcare system is going to step up and say “but profits are good” or anything related to money.

It’s manipulation pure and simple – carefully crafted and designed, then repeatedly executed well, by those who wish to keep the focus on establishing a single-payer universal healthcare system in the United States.

How can anyone have a meaningful discussion of the state of our healthcare system if you don’t talk money?

There is indeed much discussion on the demand side of the equation, that is the cost to those who need healthcare and virtually no discussion about the supply side of the equation, the costs to those delivering healthcare.

We absolutely must open the discussion up, take it beyond its cost to patients, and look at all sides if we are going to fix the areas in our healthcare system that need fixing and address the issues that are important to us all – the quality of our healthcare, how and where to better manage costs, and how to reach out to and provide affordable coverage to those uninsured among us.

Share your thoughts on this matter in the comments!

In the United States, many feel our healthcare system is in “critical condition” – in need to drastic changes if we are to contain the costs, deliver quality healthcare and provide affordable health insurance to Americans.

As an insider looking-out, it’s interesting to see the issue take shape, how the arguements are frames and what outcomes various special interests want in our future. 

I’m not looking-out from the  inside because I’m a doctor, but because I’m his wife.  I have a unique perspective, understanding and stake in the final outcome that may radically change healthcare as we know it, but also the lives of those who practice medicine each day.

Doctors today find themselves in a tenuous position – if they oppose universal healthcare, or radical changes to how healthcare is delivered, they’re branded “greedy,” or worse, driven by profit-motives.

Those supporting reforms that take our system toward a single-payer system are embraced, enlightened and ethusiastically quoted in the media as if they represented all physicians and surgeons in the United States.

The truth lies somewhere between the two extremes, but you wouldn’t know that by the tone of the current debate presented by the media.  The issue is often framed in black and white, one or the other, we must do something or we’ll be sorry later for our inaction. 

We hear a lot of noise about health insurance and access to healthcare, as if the two are interchangable and totally dependent upon each other.  And we’re fed a steady diet of reasons why our system is miserable, inadequate and antiquated; earnestly told to look at other countries and their universal healthcare systems.

While I do agree that some things in our present system need fixing, I also do not believe a single-payer unversial healthcare system is the answer.  Here I hope to openly examine our system, its flaws, its triumphs and the professionals tasked each day with delivering quality healthcare in the United States. 

Because “profit” is a dirty word, doctors find themselves limited in their ability to articulate their position in the matter; more importantly they’re often not even asked their opinion in the matter.  So, while all doctors and other healthcare professionals obviously will not agree with my stance, I’m attempting to clarify the position of those that do.

My comments are open and moderated.  I will only reject those comments which are obvious spam or that a blatant attacks rather than lending an opinion one way or the other.

My blogroll is a mix of opinions, from various medical and science bloggers that I enjoy reading.  Their inclusion does not imply my endorsement or their endorsement of me and my opinions!

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