Physician owners are struggling to meet margins as they face skyrocketing operating costs and consistent pay cuts.
The cost of running a medical practice increased 39 percent between 2001 and 2021, according to data from the American Medical Association, but physicians aren't seeing a correlating increase in pay from CMS and insurance companies.
Medicare's physician fee schedule proposed rule for 2023 would reduce the conversion factor by 4.42 percent to $33.08. CMS is also planning to remove the 4 percent statutory pay-as-you-go sequester, which was implemented to offset Congressional spending outside of healthcare.
"It is immediately apparent that the rule not only fails to account for inflation in practice costs and COVID-related challenges to practice sustainability, but also includes a significant and damaging across-the-board reduction in payment rates," Jack Resneck Jr., MD, president of the American Medical Association told Becker's. "Such a move would create long-term financial instability in the Medicare physician payment system and threaten patient access to Medicare-participating physicians."
While more than 120 state and national medical associations are asking Congress to reform Medicare's physician payment rates, many physicians need help in the short term. With inflation remaining higher than 8 percent in the last few months, and labor, materials, business expenses, health insurance, malpractice insurance and rent on the rise, physicians are wearing thin.
Luis Paz, director of business development and marketing at Cardiovascular Surgical Suites in Coral Springs, Fla., told Becker's he hears many physicians make comments such as, "I don't know how much longer I can continue to be a doctor. It gets more difficult every year," and "While reimbursements are getting smaller, the cost of running a practice keeps increasing. It's unsustainable."
Physician groups are increasingly consolidating as operating independently becomes more difficult — acquisitions jumped 145 percent from 2020 to 2021, according to a report from VMG Health.
Additionally, 36 percent of physicians have considered early retirement in the last year, according to "Back From Burnout: Confronting the Post-pandemic Physician Turnover Crisis," an October report from the Medical Group Management Association and Jackson Physician Search.
Many physicians are worried about how patient care will be affected by these losses.
"To be facing these rising costs (aka rising 'overhead'), and then to have the largest governmental payer suggest a reduction in reimbursement is seemingly tone deaf to the physician ecosystem and its current difficulties," Cory Calendine, MD, orthopedic surgeon at the Bone and Joint Institute of Tennessee in Franklin, told Becker's. "Without physicians, we will not have coordinated patient care. Patients will suffer."