With the Baby Boomer population coming of age, there is a massive exodus out of the workplace. One critical shortage that could not have come at a worse time is the decreasing number of doctors. The American Association of Medical Colleges estimates the U.S. faces a shortage of 91,500 physicians by 2020. Over that same period of time, more people will be requesting medical services which will undoubtedly create further inefficiencies in our health care system.

Two major culprits of this problem are Medicare and Medicaid. While Medicare is a federal government-sponsored healthcare program primarily for seniors, Medicaid is for low-income families and is managed by both the state and federal governments. Medicare and Medicaid differ in terms of who they cover, and how they are funded and governed.

Real Doctors are feeling the pain

Dr. Martha Boone, a Urologist in Atlanta, is concerned about both of these inefficient entities. She has endured major financial sacrifices to avoid layoffs. She spends resources on two employees whose primary responsibility is to bill Medicare and other Insurance carriers to get paid for work she has already done. Also, she had to stop taking Medicaid because after 18 months she had to give up pursuing them for payments that they never paid.

The consequence of this growing trend is that many people on Medicaid now have to go to the emergency room and Dr. Boone is having trouble maintaining her practice. She states, “If a person who has $350,000 worth of education and 17 diplomas can’t afford a 1500 square office, what does that tell young people in our country about education?”

More patients, less  profit

One major concern that doctors in general have is a decrease in their revenue. One would think that January 14 couldn’t come soon enough for those doctors who struggle financially. Logic would suggest that more people to serve in the healthcare system would equate to a higher income. This logic is flawed because there is a projected reduction of $718 billion to Medicare, which is based on reduced reimbursement with the idea of reducing fraudulent behavior like billing for services never rendered or billing for a higher-priced treatment than the healthcare provider actually conducted. Honest doctors, and ultimately patients will have to adjust to substandard healthcare.

More people + less time = danger

As the number of patients increase, while at the same time, the number of doctors decrease, patients and doctors will have considerably less time to interact with each other. One unintended outcome of providing universal access to healthcare and require health insurance will be a connected negative string of events: less time with the doctor, less time to really understand the ailment(s), more incorrect tests, more overlooked tests, inaccurate diagnoses, and ultimately more malpractice suits.

One may begin to wonder why anyone would want to become a doctor or why someone who had been practicing for enough years to live a decent retirement would even have a desire for the medical profession. High prestige is saving the medical profession from becoming as potentially scarce commodity. In order to maintain the dignity of the profession, it is imperative that the private sector, states, and the federal government work together to maintain the dignity of the people who sacrificed time and money to pursue a dream that was supposed to be realized.

Updated July 8, 2013

Rumors are swirling around the country about how business owners are going to respond when the Health Care Reform act officially starts. One reaction is to cut workers’ hours to fall under the full time status. Under Obamacare, 29 hours/wk is the amount of time someone can work without being considered full-time.  As a result, some reports suggest that many large business owners will drastically reduce their hours to avoid the penalty.

A large business is defined as 50 or more employees. Employers that pass the 50-employee threshold and don’t offer insurance face a $2,000 penalty for each uncovered worker beyond 30 employees. In other words, an employer who has 100 employees will incur $70,000 a year tax. Surveys show that some CEOs will elect to pay the penalty because of the enormous financial burdens health care puts on their profits.

David Overton, CEO of Cheesecake factory already pays health care for each of his employees who work over 25 hours. In a CBS Interview, he expressed concern about what the numbers will actually look like when January of 2014 enacts the first real financial impact of the health care reform act. He states, “…we pay millions and millions of dollars for health care… we don’t know how much more we’ll pay. For those businesses that don’t pay for their employees, they’ll be in for a very expensive situation.” These costs may inevitably have to be passed to the consumer to help offset the rising cost of healthcare.

Welch Allyn, A multi-national medical device manufacturing company is planning to lay off 275 employees over the next three-years. The layoffs are a response to a health care reform related 2.3% medical tax. CEO, Steve Meyer states, “We firmly believe this restructuring program is the right thing to do for the long-term success of the business, however, we also fully recognize the hardship it will cause some of our colleagues in the short term.” To help offset the layoff, Meyer plans to reimburse up to $4,000 for each person impacted by the layoff who decides to go back to school within a year of their departure.

While these CEOs are concerned about the financial impact of their company, the employees of these businesses may have to make more drastic decisions. Since Walmart decided to raise their healthcare premiums up to 36 percent, many of its employees had to consider whether or not to maintain their health insurance coverage at all.

Obamacare requires businesses with 50 or more employees to provide health insurance. Previously, this requirement was set to take effect January 1, 2014, but because of a rash of protests this ruling has been extended to January 1, 2015. If you have more than 50, but fewer than 100 employees, you can explore the exchanges, which may be a more cost effective alternative. If you choose not offer insurance in 2015, you will be fined $2,000 per employee for all but the first 30 employees. If you have fewer than 50 employees, you will not be held responsible to provide health insurance.

The ripple effects of health care reform will be enormous. Customers who purchase consumer goods and services will bear the burden of increased costs passed to them. Employees who work for these large companies will collectively experience massive lay-offs. Employers will have to make difficult decisions that will impact the lives of those people they employ, and ultimately their businesses. For people involved in large corporations, there is a tsunami headed their way. Only time will tell the full impact of these changes in the health care reform act.

Own a business in the Greater Los Angeles or Southern California Area, and need health insurance advice in preparation of the Health Care Reform Act? Happy to help! See my contact details below…