The New Wage Wars: Physicians and the “Maximum Wage”

There is a new wage war brewing in the United States. The federal government says that doctors are paid too much. Is a “maximum wage” for physicians next?


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The New Wage Wars

Thanks to Bernie Sanders, this election year has seen a reinvigoration of the liberal Democrats’ ever-advancing war on free markets and at-will employment. Referring to this latest political skirmish as the “Fight for 15,” they seek to mandate a so-called “living wage” that, as we all know, will actually result in the intended beneficiaries losing their jobs. It is a typical liberal Democratic initiative that will punish the very individuals it claims to help.

Ironically, those same liberal Democrats—and the federal government bureaucrats who work for them—have no problem arguing the opposite case when it comes to the country’s physicians. Doctors, it seems, make too much, and therefore should be limited to a federally imposed, one size fits all “maximum wage.”

Unfortunately, in today’s post-Obamacare America, this outlandish and blatantly unconstitutional position has teeth. It is also being enforced at hospitals around the country.

Welcome to Obamacare. The outlook for your future care is very bad, indeed.

Don’t believe me? Sounds outlandish? Well, read on . . .

Making Examples of the Nation’s Hospitals

It was recently announced that Lexington Medical Center located in Columbia, South Carolina will pay the federal government $17 million to settle claims that it paid its employed physicians too much. Sadly, Lexington is not alone. In the last year alone, another South Carolina hospital and two Florida hospitals paid the federal government $72.4 million, $69.5 million, and $118.7 million respectively to settle similar lawsuits. And there are many other stories where those came from.

So . . . what is going on?


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The Obamacare Dilemma

Having forcibly shoved Obamacare down our throats, the federal government now has a few very serious problems:

First, doctors, like everyone, cannot, and will not, work for free.

Second, the biggest consumers of Obamacare—that is, the previously uninsured and those who are in the country illegally—have no intention of paying any health insurance premium, no matter how ostensibly “affordable.” For its part, the federal government has no real recourse aside from penalties that those same folks likewise have no intention of paying. Anything more forceful is a political non-starter and would alienate their base of entitlement voters.

Third, because the biggest utilizers of Obamacare are not paying a dime for the privilege, they are spending other people’s money. And we all know how that turns out: costs escalate as quality plummets. It is a basic law of economics, markets, and human nature that no politician or government bureaucrat can overcome.

Between rising healthcare costs (of which physician salaries is a less-than-minuscule component), the need for subsidies, and the tendency of the subsidized to overspend (among other factors), any way you slice it, Obamacare is simply unaffordable.

To add to the government’s problems, healthcare is also notoriously difficult to regulate in the trenches. After all, the practice of medicine involves highly skilled and trained professionals making constant (and often snap) judgments involving both art and science. How is a government bureaucrat with a degree in political science going to keep up, much less catch the healthcare “bad guys” in the act, when he doesn’t even understand their language?

Finally, many in the country still respect physicians. Most actually love their own physician. With marching orders to divide and conquer, how is that same government bureaucrat to turn physicians into villains, much less public enemy number one?

The Federal Government’s Solution

All of these problems are solved by the federal government’s newest tactic in its 100-year war on physicians: Suing hospitals for paying their employed physicians too much. While the rest of the country argues over raising the country’s minimum wage, physicians are quietly being clubbed over the head by a federal government intent upon applying a “maximum wage” restriction to them alone.

Of course, such a thing is frankly unconstitutional. Of course, that never stopped the D.C. powers that be.

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This is how doctors will have their pay effectively lowered, and lowered, and lowered until such time as they become dramatically underpaid and thus are forced to quit practicing medicine. This, of course, will solve the Obamacare problem of physician compensation—especially when the government makes good on its promise to replace physicians with those with less training and experience, who in turn will accept lower wages—for a time. Then they will quit, and someone even less qualified will be hired. They, too, will accept less, until they, too, quit, at which time someone even less experienced—and less expensive—takes over. They, too, . . .

You get the point: It is a never-ending downward spiral of increasing ineptitude. After all, you get what you pay for. Health care is no exception to that universal rule.

You will be told that physicians are willingly leaving the country at the mercy of a doctor shortage because they are greedy and do not care about your needs or your health. In actuality, they are being forced out by a federal government that is driving them into forced servitude and personal poverty. When it comes down to a choice between practicing medicine and sending your children to college, or between practicing medicine and paying the light bill, then things can get very oppressive very fast. And for the nation’s physicians, they are—at lightning speed.

Calling in Reinforcements

The whistleblower nature of these lawsuits also solves the enforcement problem. By effectively incentivizing disgruntled physicians—who are in so short supply these days—to snitch on their colleagues for their own personal gain, it turns physicians into the federal government’s eyes and ears—and expert witnesses—on the hospital floors.

Nowhere is this effect more apparent than in the Lexington case. Lexington paid the federal government $17 million to settle claims that it paid its employed physicians to refer patients to the hospital for the care that they needed. One neurologist employed by the hospital collected a paycheck from the hospital, yet sent his patients elsewhere for care. Of course the hospital “pressured” him to utilize their facilities—they were paying his salary! After he was fired, he went to the federal government, which promptly filed a whistleblower lawsuit on his behalf. According to the government, paying the neurologist’s salary gave the hospital no right to pressure him into treating his patients at the hospital. That paid his salary. I kid you not.

The tattling physician’s take? A cool $4.5 million for doing absolutely nothing. He will never have to work another day in his life. He also gets his revenge against a former employer. No doubt, he was motivated by bitterness over the hospital’s having purchased his practice and turned him into an employee. Of course, the necessity of such a mutually distasteful employment arrangement was the fault of neither the hospital nor the neurologist. If you must blame someone, blame Obamacare—and the same federal government that shook down Lexington for $17 million while throwing a “finder’s fee” of $4.5 million to the newly wealthy tattle-tale. It’s a sweet deal for both. For you and me? Not so much.

White Coat VillainsDoctor in Scrubs and Handcuffs - fake cancer doctors

Finally, lawsuits like the one in South Carolina assist the federal government in its never-ending quest to vilify doctors and hospitals so that it can continue to punish and control them at will and with the public’s approval. They allow the federal government to take a public “victory lap,” at the same time giving the public the impression that it is “cracking down” on “bad doctors” and “bad hospitals.” You know the drill: Publicly vilify your target, excoriate them in the oh-so-compliant press, then take them out. That is what is happening here.

And best of all for the government, it is a rigged game—an unfair fight. Since they are the federal government, they simply pressure the hospitals until they have to settle. The hospitals have no choice. Guilt, and the breaking of laws, has nothing to do with it.

Show Us the Money—Or Not

In case you were wondering, absolutely none of the money collected from these sham lawsuits will be used to fund the care that you receive. Instead, it will go straight into the pockets of: (1) the government bureaucrats who approve the lawsuits; (2) the government lawyers who bring them, pretending to practice law while knowing that all of the cases will settle; (3) the judges who approve these forced and planned extortions masquerading as settlements; and, of course, (4) those who contribute nothing yet continue to receive Obamacare subsidies while the rest of us working stiffs are priced out of the insurance marketplace altogether and, eventually, denied the care that we need for our troubles.

This, of course, allows for greater redistribution. It works out for everyone—except you and me.

Bad Medicine

None of this improves the quality of your health care. Nor will it lower the cost of that care. But then again, as I have warned many times over, Obamacare has nothing to do with the quality or cost of your care. To the contrary, the law is designed to destroy the care that you receive. And it is doing just that.

Here is the point:

Hospitals are now being sued by the federal government for paying their employed physicians too much.

How can that be?

So-called “whistleblowers” make millions of dollars—for some, tens of millions of dollars—for doing nothing more honorable than snitching on their former employers—again, for ostensibly committing the “new crime” of paying physicians too much for doing one of the most difficult jobs in the world.

Ask yourself: Exactly how much is too much? How much is a good physician worth? Is physician compensation one size fits all?

What if we suddenly said that CEOs could not be paid “too much” regardless of their qualifications and value to the companies they run? Or attorneys? Or painters, plumbers, or roofers? Or the guy who mows your lawn? Or you?

That’s right: No one would stand for it.

Somehow, when the victims are physicians, it is just fine. Go figure.

So . . . In a world where employed physicians’ salaries are already dropping precipitously, how long will it be before physicians are making less than any other professionals? Or, for that matter, your local manual laborer?

That’s right: Not long.

And when that happens, how many of the best and the brightest academics are going to choose to go into medicine in return for a government-mandated “maximum wage?” How many are going to be willing to go through decades of medical training, stay up endless nights, work countless weekends, miss important events in their own families, and risk being sued at every turn—again, in exchange for a government-mandated “maximum wage” that will be far less than their college classmates are making? How many will forgo caring for their own family’s needs so that they can care for the needs of others?

Most importantly, how many will be there to respond to the call when you need them?

That’s right: None.

Welcome to rationed care, compliments of the federal government.

The Obamacare ride is getting bumpy. Better hold on tight.

If Hillary Clinton wins in November, things will get much worse. Brace yourselves. As the liberal Democrats get their wish of a McDonald’s minimum wage that starts at $15, is indexed for inflation, and goes steadily up from there, physicians—your physician—probably won’t be paid enough to live on.

What do you think that will do to the care that you receive?

That’s right: It will destroy it.

Welcome to Obamacare. You’re going to hate it.

Please let me know your thoughts.



Increasing Spending by Lowering Cost: Obamacare and the Upward Death Spiral

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It appears that the Obamacare narrative continues to run headlong into the unforgiving brick wall of reality.

Pesky things, facts.

The latest: 

Healthcare costs are skyrocketing under Obamacare.

In 2015, the United States healthcare system spent $3.2 trillion—that’s trillion with a “t”—or almost $10,000 for every person. This is the highest rate of spending—and the greatest increase over 2014 spending—seen thus far under Obamacare. It also outpaces by a significant stretch all pre-Obamacare healthcare spending.

With a whopping 5.5% annual growth rate, healthcare spending goes up by $176 billion every year. That same 5.5% annual growth rate also ensures that healthcare spending outstrips by a significant margin the growths of gross domestic product (GDP), tax revenue, and wages. In other words, healthcare spending is outgrowing every other marker of American productivity and wealth. That is concerning.

Under Obamacare, the percentage of the United States economy devoted to healthcare spending has grown.

Remember when proponents of Obamacare relied upon the supposedly unprecedented percentage of the U.S. economy devoted to healthcare spending—16% at the time—to promise a remedy?

Outrageous!” they exclaimed, with a righteous indignation that was visible and, for many, compelling.

Well, under Obamacare, that percentage has increased—to 17.8%, to be exact. So in less than six years of Obamacare, that number has increased by some 1.8%, or just over 11%. That’s almost 2% per year. With overall spending of $3.2 trillion, that’s a lot of money—almost $60 billion—that’s billion, with a “b”— per year, to be exact. And that’s just the annual increase in the percentage of the economy devoted to healthcare spending under Obamacare. Yikes.

Even worse, Barack Obama’s own Centers for Medicare & Medicaid Services (CMS) estimates that by 2025, healthcare spending will comprise 20.1% of the U.S. economy. That, of course, leaves precious little money for defense, education, transportation, infrastructure, disaster preparedness and relief . . . You know: the other necessities.

Healthcare spending will not slow down anytime soon.

Between the Obamacare-mandated expansion of Medicaid and industry responses that have increased prices while limiting consumer choice, healthcare spending is poised to continue its upward death spiral. As they say, few things are as certain as death, taxes, and increased healthcare spending. Okay, so they don’t add that last part. But they should.

Obamacare has done nothing measurable to lower healthcare spending.

When recently pressed, even Obamacare-friendly CMS economists “could not definitively say” whether the law’s payment and delivery reforms have done anything to lower healthcare spending.

You know what that means: They have not.

One area alone has continued to grow at a historically low rate of 0.8%—private sector price inflation.

Tellingly, that is the one part of the healthcare spending equation that remains, for the most part and thanks to an aggressive lobbying effort, in the private sector—for now. You should hope that continues. If not, and if the federal government takes over, expect dramatic increases in the prices of everything related to your health.


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Relentless, Obamacare-driven job growth in the healthcare sector will further exacerbate the problem.

All new jobs are not created equal.

According to healthcare economists, the current healthcare hiring pace will put the industry at 900,000 added jobs in 2015 and 2016 alone.

Job creation is a good thing, right? Not necessarily.

No doubt, this acceleration in hiring is in response to the added burdens placed on providers by Obamacare and its regulations. The problem is, these are jobs that are now required to do the same work that was previously done by fewer people. Just because the workplace is more crowded, that doesn’t necessarily mean that more, additional, or better care is provided.

Nor is more profit being generated. Rather, thanks to Obamacare and its regulatory complexity and technological mandates, the new jobs are required just to maintain the status quo. Obviously, where employment costs rise and profits do not, that equals a net loss. In such a scenario, the more new healthcare jobs are created, the more healthcare spending increases, while profits remain stagnant.

And so the upward death spiral continues.

Americans are paying more out of pocket for the health care that they receive.

In 2015, a record 10.6% of national health expenditures came directly from consumers. With $3.2 trillion in total healthcare spending, that equals almost $340 billion—that’s billion, with a “b”—per year that comes out of individual Americans’ pockets. As those consumers are increasingly pushed toward high-deductible health plans, that upward trajectory of individual costs is expected to continue, reaching historic highs over the next few years.

It is only a matter of time before average Americans like you and me are priced out of not only the health insurance market, but the health care delivery market as well. That is when things will get really painful—literally.

Because of the personal costs involved, more and more Americans are postponing both seeking and receiving care, leading to higher costs and worse outcomes.

Individual responsibility for costs associated with healthcare services reduces spending in the short term as healthcare consumers forgo routine and non-emergent care. However, that same postponement leads to more long-term spending and worse outcomes. Because individuals wait longer to seek care, they are sicker when they do, with the result that their care is both more expensive and less effective.



Having “skin in the game” does not a better healthcare consumer make.

Obamacare’s proponents extol the cost savings associated with giving healthcare consumers “skin in the game” by making them pay more out of pocket for their care. Economists disagree. They report that when it come to healthcare, high deductibles and copays have the opposite effect. Increasing out of pocket expenditures—particularly in a time of economic recession and record unemployment and wage stagnation—results in higher overall healthcare spending. This is because for every healthcare consumer who forgoes low-value/high-cost care, another forgoes low cost/high value care like preventive care and disease screenings. Again, costs rise and outcomes worsen as a result.


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Per-person healthcare spending increases with federal government involvement. 

In 2015, private health insurance companies spent an average of $5,380 per insured individual. That same year, Medicare spent almost $12,000 per enrollee—not including enrollees’ out of pocket expenditures. Of course, since Medicare is used almost exclusively by the elderly and those with serious health conditions, that is understandable. They are a self-selected group inclined toward healthcare spending. Less understandable is the fact that that same year, Medicaid programs—which presumably represent the same wide variety of individuals as the private health insurance industry—spent nearly $8,000 per member.

All of this is a direct result of the passage and implementation of Obamacare.

Even the Obamacare-friendly CMS admits that these are direct effects of, and responses to, Obamacare’s expansion of Medicaid and its resulting disruption of both the health insurance market and the healthcare delivery system. On that we all agree.

So why, exactly, are we continuing down the Obamacare road? That’s a good question.

The Bottom Line

Who, exactly, is surprised by any of this? Certainly not the nation’s physicians. But no one asked us. Certainly not my former law school classmate, Barack Obama. Go figure.

Just wait until the rationing of care begins in earnest starting in 2017. If you think rising insurance deductibles and copays are concerning, just wait until you cannot get the care that you need regardless of price and your ability and willingness to pay.

Unfortunately, that day is fast approaching. Its arrival will be hastened in the event Hillary Clinton wins the presidency this fall. She has actually promised as much.

Higher costs. Less care. Worse outcomes. Government control. Bureaucratic interference. Rationed care. Death panels.

This is the real face of Obamacare.

Is this progress? Because it looks and feels a lot like failure to me.

Welcome to Obamacare. I’m sure you’re going to hate it.

Those are my thoughts. Please let me know yours.





Obamacare Gets an F: Physicians Give the Law a Failing Grade

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Grades Matter

Grades matter. They are also telling. Obamacare has just been put to the test, and the results are not good. Obamacare has failed—miserably.

Late last month, while the nation recovered from the Republican and Democratic National Conventions and continued to obsess over every new investigation of Hillary Clinton and every regrettable utterance by Donald Trump, the results of a stunning survey were released.

While the nation slept, one of its scariest boogeymen looked it straight in the eye; and the American public did not even blink.


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Surveying America’s Physicians

Medical Economics is a leading journal of the medical profession. Recently, the magazine’s editorial board surveyed hundreds of practicing physicians across the nation. With the help of healthcare industry experts, including healthcare policy analysts and policymakers and physician advisors, the magazine’s editorial board devised a list of eight major policy initiatives of Obamacare. Items listed were among the largest, most sweeping promises used to sell Obamacare to physicians and healthcare consumers—you know, you and me as the individuals with the power to make or break the new law—and vote politicians into, and out of, office.

Physicians surveyed were engaged in the day-to-day practice of medicine. They were asked to grade each Obamacare promise based upon whether that promise had been kept, whether the stated goal had been achieved, and whether that element of Obamacare assisted them in their day-to-day work as a physician. They were asked to grade each element between a low of 0 (not at all) to a high of 10 (very much).

In the cover article of the magazine’s July 25, 2016 issue, pictured above, the magazine’s editorial board revealed the results of that survey.

They were dismaying, but not surprising.

That’s Obamacare with an “F”

It is now official: Six long years in, America’s physicians give each element of Obamacare an F.   medicare-frustrated-doctor

It is worth noting that practicing physicians do not give each element of Obamacare an F as in, say, a 64, 60, or even 55 sort of F—in other words, the sort of F that says, “If you had just tried harder, everything would have been okay; so better luck next time.”

No. They gave each element of Obamacare an F that is in the 20s or 30s—you know, the kind of F that in school would have caused you to be held back, grounded by your parents, or most likely both. In other words, each element of Obamacare examined received a “you-didn’t-even-try-so-there-won’t-be-a-next-time” sort of F.

Even more telling, as the article’s authors note, individual survey respondents did not differ much in their evaluations—or their grades. Indeed, the physician respondents were uniform to a physician in their perceptions of the massive failures of Obamacare.

Again, the results are disappointing but not surprising to those of us who have struggled under Obamacare’s false promises and egregious mandates for six years now.

Results Rundown

Since most of you have no reason or desire to subscribe to, much less read, Medical Economics Magazine, here is a rundown of the specific Obamacare promises considered, their respective grades (both number and letter), and verbatim quotes from physician respondents:

1.   Medicare bonus for primary care services  

     The Obamacare promise: Obamacare-mandated Medicare bonuses for primary care services will more fairly compensate primary care physicians by closing the gap between reimbursement for primary care services and payment for specialist services, which have historically be compensated at much higher rates despite a relative equality of services, training, and education. This would have amounted to an effective raise for primary care physicians while leaving medical specialists’ payments intact. It was proposed as a win-win for all physicians as well as their patients.

     PHYSICIAN GRADE: 33 = F  

Physician comments:

      “It is totally meaningless.”                                                 

      “It was a silly Band-Aid.”

2.   Medicaid-Medicare parity

       The Obamacare promise: Obamacare-mandated payments to primary care physicians providing services under Medicaid will be reimbursed at the same rate as the same services under Medicare. This would have amounted to an effective raise for physicians caring for the Medicaid population while keeping Medicare reimbursements stable. Again, it was proposed as a win-win for everyone. 


Physician comment:

       “Once again a short-term fix for long-term problems which mandates one and then walks away to  leave someone else holding the bag.”

3.   Increased coverage through healthcare insurance exchanges 

      The Obamacare promise: Under Obamacare, more Americans will be provided health insurance coverage thanks to the healthcare insurance exchanges.


Physician comments:

      “Coverage is shockingly bad, and at a high price.

      “[M]ore coverage does not equal more access.”

       “High deductibles appears to me to be a by-product of insurance companies protecting their assets.” 

       “Why would selling an insurance policy with a large deductible help someone who can’t even afford the premiums? They can’t pay the deductible, so they still can’t afford care. Who made out? Insurance companies. Who lost? Private practice doctors who had to deal with patients who stiffed them for the deductibles on policies. Thanks Obama!

       “[Physicians] have been the ones who have to explain that the patient does have to pay their exorbitant copays—usually we end up with zero and an angry patient.

4.   Physician networks                                           

       The Obamacare promise: Under Obamacare, Americans will enjoy access to a wide range of care from a physician of their choosing. (“If you like your doctor, you can keep your doctor.”) (“If you like your plan, you can keep your plan.”)


Physician comments:

      “[Obama said] ‘If you like your plan, you can keep your plan.’ The result? Reduced choice.”

     “Insurance companies are prohibited from cherry picking healthy patients, so they cherry pick physicians who treat healthy patients.”

      “The network delineations in our area are so arbitrary and inappropriate that all they do is impede care.”

      “If I can’t send my patients to specialists within a reasonable travel time, the patient simply can’t go. This is particularly true in rural areas. 

5.   Accountable care organizations  

      The Obamacare promise: Through Obamacare-mandated Accountable Care Organizations (ACOs), Medicare patients will enjoy high-quality, coordinated care.

      PHYSICIAN GRADE: 29 = F 

Physician comments:                                      

      “This is managed care reintroduced under another name. There will be temporary savings then rapidly increasing costs again as the market becomes controlled.”

      “ACOs add layers of work for physicians, reducing our ability to spend time with our patients and adding unnecessary burdens to our already busy schedules. And all of this with marginal if not negligible benefit.”

6.   Outcomes-based reimbursement   

       The Obamacare Promise: Obamacare-mandated initiatives, including outcomes-based provider reimbursement, will ensure patients a higher quality of care.

       PHYSICIAN GRADE: 28 = F 

Physician comments:

      “Let’s start paying lawyers and politicians using a similar grading system.” 

      “Unintended consequence of this in a long run will be that no one will be willing to take care of sick patients, because they will cost the doctor money in reimbursement.”

      “This is a very dangerous game that the government is playing with physician reimbursement and it will be the death of the small practice.”

      “Ultimately could just be a complicated way to cut reimbursement.”

      “The emphasis has moved from the patient to the process.”

      “The problem is that this law does not reward good medicine, it only rewards good recordkeeping.”

7.   Physician ratings via the Physician Compare website

       The Obamacare promise: Obamacare-mandated physician compare websites will allow patients to make more informed choices of providers, at the same time incentivizing physicians to provide the highest quality care possible.


Physician comments    

      “We need a site for insurance companies and congressmen as well.”

      “This website constitutes CMS’s engagement in cyberbullying practicing physicians.”

      “[The site is] horribly inaccurate.”

      “It appears to be at random and not vetted at all.”

      “Not all that is important can be measured, and not all that is measurable is important.”

8.   Expansion of health IT

       The Obamacare promise: Obamacare-mandated electronic health records (EHRs) will improve patient care and physician communication.


Physician comments:

      “The EHR is the single worst thing among many to happen to medical practice in the past 15 years.”

      “This is the single most detrimental hurdle to practicing.” 

       “Nothing ruins a patient’s experience faster than a computer in the exam room.” 

       “[EHRs] just opened doors to lots of IT vendors who are overcharging because they can!” 

       “[E]verything involved in patient care takes longer.” 

       “I spend a large amount of time as a clerk. Thank you 9th grade typing teacher!



Obamacare’s Failing Grade

The results are in. They also speak for themselves.

Obamacare’s average? Exactly 30. That’s a dangerously long way from 100—or even the passing mark of 65, for that matter. In fact, it is less than half of passing. Hardly commendable. Not even acceptable.

Imagine what would have happened to you in school were you to take such a dismal report card home.

Obamacare should be held back. Or grounded. Or suspended until improved.

Obamacare is a failure—a massive failure.

In case you wondered what your physician thinks of Obamacare, well, you have your answer.

That is bad news for us physicians, and even worse news for you, our patients.

Welcome to Obamacare. You’re going to hate it. Heck, you might not even survive it.

Please let me know your thoughts.