The Physician: Employer or Employee? by Ted Bacharach MD (retired)

Just a few decades ago the physician was an independent small business man. When completing his or her training, he or she was able to open an office. Those days are past for most physicians starting out. Encumbered with debt from prolonged schooling and training the cost of starting an independent practice becomes prohibitive. In a few instances, if the physician is willing to go to a rural area, it may still be possible to be independent, but for most, this is not easily possible. The independent physician does not have a patient base and it may not be easy to contract with health insurance companies.

The result of all this is simple. The physician starting out has to assume a job with a company. The result is that the majority of physicians have become employees. The ethical new physician guided by AMA ethics was supposed to place an ad no larger than a business card in the newspaper. Today the businesses which employ physicians take out full page ads, while most independent physicians could afford to treat the needy patient for nothing or whatever they were able to pay, this is no longer possible. The businesses that employ physicians have no pity and do not feel obligated to provide services for nothing. The physician once upon a time had the luxury of being able to refer patients to the specialist of his choice. This is no longer possible and referrals are determined by the parent organization.

Hospitals that can afford hospitalists are not anxious to see outside physicians come in. They also like to run hospitals without input from physicians. The companies that employ physicians also like to see them stay at their desks and see patients, rather than running off to the hospital, a not so profitable diversion in most instances.

There are of course some advantages for the physician, no night call, regular paycheck, and regular hours.

The question now arises as employees doctors have little bargaining power and protection from the Medical Associations is rather skimpy at best. It may well be that organizations that will protect our interests may become necessary

The physician as a small independent businessman has passed along with the dinosaur.

Mad Cereal Men

Did you know that Cocoa Krispies may help your kids ward off the H1N1 flu? You can see from the above image how their new marketing plan is touting that they have 25% of our needed daily vitamins with some antioxidants which will "support your child's immunity". This is an example of a marketing team going crazy and trying to enter the world of medicine....and failing. The USA Today was all over this on November 2nd and then ripped them again the next day in their opinion piece. This whole thing relates to the new "Smart Choices" program that the cereal industry has locked into and it is something that I have written about earlier (and predicted would cause some controversy). The bottom line is that having non-science people extrapolating medical evidence to make a buck is a bad idea. They have been doing it for years for commercials for weight loss products, etc. and now Kelloggs wanted in. Reminds me of that old SNL bit called "Bad Idea Jeans". I guess Kelloggs got the point because they just pulled the ads. More to come.

The Pelosi Bill

The Wall Street Journal looked at the House's bill for healthcare reform and trashed it. Admittedly the WSJ is a conservative newspaper but I think this piece is an interesting analysis of what the Democrats have dreamed up. Here is a breakdown (my comments in italic):

• The Congressional Budget Office figures the House program will cost $1.055 trillion which is a little more than the $829 billion net cost the Dems have been claiming. ObamaCare will be lucky to cost under $2 trillion over 10 years; it will grow more after that.


• The House is counting on Medicare payments to doctors will be cut by 21.5% next year and deeper after that. Doctors love hearing that one.


• The House will expand eligibility to Medicaid to everyone below 150% of the poverty level, meaning that some 15 million new people will be added to the rolls as private insurance gets crowded out at a cost of $425 billion. A decade from now more than a quarter of the population will be on a program originally intended for poor women, children and the disabled. Few physicians take Medicaid as it is because it pays so little. Maybe in the future physicians will have to actually pay to see these patients instead of getting paid themselves?


• The amount of new taxes will be "European-like" starting with surcharges on the rich and moving lower and lower as more money is needed (think Alternative Minimum Tax). Even if Congress had confiscated 100% of the taxable income of people earning over $500,000 in the boom year of 2006, it would have only raised $1.3 trillion. To quote one of my favorite movies, "Where's the money, Lebowski? "


• The cost of insurance may triple under new burdens to cover "everyone" irregardless of medical history or health status. Private insurers may indeed go the way of the dodo and employee plans would be done as well.


• Mr. Obama's own Medicare actuaries estimate that the federal share of U.S. health dollars will quickly climb beyond 60% from 46% today.


• The new plan may cover more people but in the process will make it care even more expensive and rigid than the status quo.

This is going to be a very bumpy ride.

Golf Suspension

For those that don't think golfers use PEDs then think again. Doug Barron, a 40-year-old journeyman who lost his tour card three years ago, became the first player to be suspended by the PGA Tour for testing positive for a performance-enhancing substance. Though the type of substance used was not disclosed it is obvious from the actual picture of Barron above that is was anabolic steroids.

Public Enemy #?

I am no big fan of managed care companies. As a physician I am constantly in an adversarial position with them. Besides, they continue to raise their rates each and every year to the point where it is making it impossible for anyone to afford. They are the easy enemy. In fact, they are public enemy #1. But are they so bad? Jeff Jacoby does a nice spread in the left-leaning Boston Globe that may open your eyes. He references the analysis by the Associated Press for much of his information. I will highlight it here:

• On the Fortune 500 list of top industries, health insurance companies ranked 35th in profitability in 2008; their overall profit margin was a mere 2.2 percent. They lagged far behind such industries as pharmaceuticals, which showed a profit margin of 19.3 percent, railroads (12.6 percent), and mining (11.5 percent).


• Among health insurers, the best performer last year was HealthSpring, which showed a profit of 5.4 percent and is a less profitable margin than was achieved by the makers of Tupperware, Clorox bleach, and Molson and Coors beers.


• For the most recent quarter of 2009, health-insurance plans earned profits of only 3.3 percent, ranking them 86th on the expanded Yahoo! Finance list of US industries. Makers of software applications, by contrast, are pulling in profits of nearly 22 percent.

He summarizes that:

The notion that health insurers “make more money than any other business in America today’’ is preposterous. Advocates of a public option may find it tactically expedient to paint insurers as insatiable predators, swollen with ill-gotten profits. The reality is otherwise.

He makes some very interesting points and the article is well worth your time. The problem with managed care companies is that they are dealing with human lives. People die as a result of their decisions (whether to cover or not to cover fellow human beings). I also think that the term "profit" is not so easy to understand. These companies are swollen with administrators making massive salaries. That is where the money is going and counts against net profit. These people create so many hurdles that hospitals have to replicate the tactic of hiring more and more administrators in order to get paid. This is where the bloat is. The bottom line is that the cost of health insurance is ludicrous and as Jacoby states, "The critics do have one thing right: More competition would bring down health care premiums." So let's find the right way to get those premiums down (ex. tort reform to stop defensive medicine, buying insurance across state lines, etc.). The whole "public option" is a distraction keeping our attention off what matters.

Congress Passes Medical TARP

The Senate and House of Representatives have passed the new Medical TARP bill. The Trans America Railroad People bill save money because when someone exceeds the set amount of determined healthcare cost limit in a year, they're put on a train that just keeps circling the USA for the balance of the year. This thereby caps the medical expenses for that person.

(from one of our PJ readers - Josh Ravitch)

Medicaid Fraud

Check out this article about Medicaid fraud in the NY Times. No, it isn't about doctors cheating the system (which, unfortunately, does happen). This is about prominent people receiving Medicaid medical benefits.

• a Manhattan painter and mime who owns two waterfront properties in the Hamptons and has performed with the singer Melba Moore.


• a freelance artist who owns two Manhattan apartments valued at more than $1 million apiece.


• a dentist working in the Bronx whose practice actually provides services to Medicaid patients

There were 11 people indicted in NY for scamming Medicaid. The real issue is that "the application for Medicaid is self-authenticating, meaning that applicants do not have to provide verifying documents". Read that sentence again as it is unbelievable.

I hope this will be a lesson for any future healthcare program the government spits out. This thing will cost a whole bunch of money and unless there is some kind of watchdog looking over who deserves what then the wrong people will come out of the woodwork to take advantage.

Living too Long by Ted Bacharach MD (Retired)

You you have been around a while if:

• You have witnessed the change from “FIVE & TEN CENT STORE” to “DOLLAR STORE” and even these are failing.


• Milk Cans are useful only as decoration.


• Saturday movies for kids, once cost 25 cents,------ this would not even pay for popcorn.


• Gasoline prices have changed from cents to dollars per gallon and you even have to pump it yourself.


• Classmates are no longer to be found in the telephone book.


• Radio programs are only for the car.


• High school seniors no longer ride the bus.


• Pregnancy was something to worry about.


• Cameras took pictures on film.


• A letter could be mailed for three cents.


• The phone was limited to the home or office.


• No television.


• Your doctor had a name.

Humor, Medicine, Placebo Journal and Kevin Pho

Kevin Pho MD and I collaborated on a piece for Medscape that discusses humor and medicine. Kevin the brainchild behind the famous KevinMD blog. You can read it here if you are interested. Here is a snippet from the piece:

It's tough to be a doctor these days. Whether it's listening to the difficulties of our medical colleagues as they try to best care for their patients, or engaging other health professionals about the uncertainties surrounding health reform, we've noticed a tense, sometimes gloomy, atmosphere among physicians.

It was the first time Kevin and I worked together and it was very enjoyable. I even felt respected in the morning though he didn't spoon me.

There is a chance that Kevin and I will be doing a panel at the Medical Communications Conference in Atlanta this April. More to come.

Swine Flu Blues

For the second time this year we are being inundated with stories about the swine flu, er, H1N1 flu. As a physician I am getting what seems like multiple emails a day about it. President Obama even deemed it a national emergency. This was designed to give hospitals the flexibility to move patients to satellite facilities if they are overwhelmed. For example, they can turn a Walmart into Swinemart. The USA Today has reported how this hysteria has pushed some hospitals to the limit, inundating their ERs with scared parents and kids. The number of deaths from this virus is not nearly as high as from the regular flu but that is not the issue. The issue is that it hits and can kill healthy kids. And that scares the crap out of people. So why aren't more people being vaccinated? Well, for one, many parents are not sold on the idea. That is starting to change, however, as the temperature gets colder and we move into the regular flu season. The second reason is that we are about 24 million doses short of the vaccine! I haven't even been able to get mine yet and I am on the front line seeing patients (also read as vector). Call me crazy but hasn't the government known this was coming? I am blaming them and the vaccine makers for this mistake. You knew it was coming and you knew we needed the vaccines and yet all you are doing is rationing them and claim a national emergency. Who was in charge of this? FEMA? I

Medicare and Medicaid but Hold the Mayo

I recently had blogged how the Mayo Clinic has been held up as the flagship for great outcomes and business savvy by the Obama administration. Mayo, which had backed Obama's healthcare reform plans, soon walked away from that agreement stating they basically wanted the status quo. I am sure the fact that Mayo only takes about 5% Medicaid patients versus the 29% the other local hospital in town takes hasn't nothing to do with that decision. Now comes news that they are no longer accepting some Medicare and Medicaid patients at all. Mayo announced that its flagship facility in Rochester, Minn., will no longer accept Medicaid patients from Nebraska and Montana. The Mayo branch in Arizona also stated that under a two-year pilot program, it would no longer accept Medicare for patients seeking primary care at its Glendale facility. Mayo officials said that the two moves were "business decisions" that had grown out of longstanding concerns about what it sees as underpayment by Medicare and Medicaid. Well, welcome to the real world. On a side note, Mayo has also opened a new CHERRY PICKING business.

Hypocrisy From The AAFP?

The American Academy of Family Practice has recently announced a corporate partnership with The Coca-Cola Company. The "beverage giant will provide a grant for the Academy to develop consumer education content related to beverages and sweeteners for the AAFP's award-winning consumer health and wellness Web site". On the AAFP website they say that this "Consumer Alliance program also will create a new source of funding for AAFP, which, in recent years, has broadened its search for funding outside the pharmaceutical industry". That statement, by the way, is not totally true. I just got back from the AAFP Scientific Assembly where drug ads were on everything the AAFP handed out and there was a football field full of paying pharmaceutical company vendors.

So let me get this straight, it is basically a crime against humanity for individual doctors to even take a pen from a drug rep yet my professional organization can whore themselves out to anyone they want?

"We've made a conscious effort to diversify our sources of revenue," AAFP President-elect Lori Heim MD said.

This sure seems weird to me. Shouldn't the AAFP be urging patients and consumers to avoid sweetened soft drinks? You know, the ones that help cause obesity, diabetes, tooth decay, and other health problems?

No Bill For You

The AMA got in bed with the Obama administration in order to get a bill passed stopping the cuts in the Medicare payment formula. We go through this crap every year and usually Congress delays these cuts at the 11th hour. This time there was a bill voted on that was separate from the whole healthcare reform bill going up for vote in the next.....well....who knows. This separate bill would have delayed the Medicare cuts for another 10 years and would not count as part of the overall debt for the later healthcare reform bill (as to why I have no idea). Anyway, it doesn't matter as the bill failed and we doctors lose. That doesn't mean something won't pass later on to stop these cuts but this whole process is just getting crazy. Hey AMA, you sold out for this to pass and now that it hasn't how about finding a backbone and demanding some tort reform? I know many a doctor who thinks we all should just drop Medicare and start over by taking cash only. That idea gets more tempting by the day.

We Made The List!

The Placebo Journal Blog has made the list of the 99 Best Blogs for Pre-Med students.

These blogs will give pre-med students the upper hand on medical knowledge, current events and health care answers. Recognized as a vital learning tool for pre-med students and patients alike, medical blogs are a must-read for education and entertainment. Whether you are applying to medical school, already enrolled or just have an affinity for medicine, these blogs will further your interest, make you laugh often and maybe even prompt you to write a blog of your own!

We are listed under the "Health and Miscellaneous Blogs". Okay, we are listed at #93 but I don't believe this is a a ranking. At least I hope not because if it is then disregard this whole blog entry.

Keep The CT Scans Running

This is great news for hospitals and radiologists, both of which are in desperate need of extra cash. Heck, I even know one radiologist who only gets 16 weeks off a year. Add that to his salary of at least $400K or $500K and this guy is hurting! It looks like a ruling in Massachusetts is going to make it mandatory to medically monitor smokers using CT scans of their lungs. This comes from a lawsuit from two plaintiffs against the tobacco companies. One of them is 70 years old and has been smoking since she was nine. And she is still smoking. Here is what she said in the article:

“I’m worried that there might be a chance that I could have lung cancer. I don’t know how I would handle that. But I am not worried enough that I could make myself quit indefinitely. I am addicted. . . . I can’t stop.’’

At first glance this whole thing seems nice enough. It may help some people detect their cancer earlier. The bigger picture, however, is more murky. Is the tobacco company going to pay for the palliative therapy of this 70 year old if they find lung cancer or is our society stuck with the large bill giving her two more months of life? As the article says, tens of thousands of people could qualify as class members and that the tests cost $400 to $500 annually. If you remember, radiologists have been pushing for CT scans to be part of the regular check-up in smokers. This cost, if not paid for by big tobacco companies, would be astronomical. This is not to mention how this court case could relate to other toxin exposures that may require "monitoring" as well.

It is cases like these that make medical ethicists salivate. Should society continue to pay for people who abuse themselves? What if those people were duped by the tobacco companies? Aren't those warning signs on the packages enough? Why should these lawsuits continue when the dangers of smoking have been known for decades? There are a ton more questions that could be generated by cases like these. My hunch is that the patients really won't come out winners here. The only people who will win are the hospitals, the radiologists and lawyers.