The Slow Motion Train Wreck (S1E2)

Welcome to the Cash Practice Solution Podcast, where we explore how eliminating third-party payers like the insurance industry and government from the doctor-patient relationship can lead to a more fulfilling and fun practice. I’m your host, Dr. J., and today we’re diving into a topic that may seem counterintuitive, at first – Why saying, “no” to being paid by these third parties can actually lead to greater freedom and satisfaction in your medical career.   If you want to maximize your already-existing cash practice, or you’re just getting started out (and you want to start out on the right foot), you need to check out our cash practice scorecard. It’ll help you make all the right decisions from the very start. It’s linked at cashpracticesolution.com.  Are you ready to explore? All right, let’s get started… 

The Hard Truth About Income with Medicare

I want to talk about a metaphor.  And I know you know it, the slow-motion train wreck. Some people think of it as a frog in a slowly boiling pot, but this isn’t that. This is that cringy, you-know-what’s-going-to-happen, it’s-definitely-going-to-happen, it’s-about-to-happen, and the train wreck is coming. And it’s going to be glorious or tragic, but it’s going to be big. These images capture the gradual and devastating impact of Medicare pay cuts over the past two decades.  Ready for the staggering statistic? Medicare payments have been reduced by 30 percent over the last 20 years. As most of you know, insurers are pegging their rates to Medicare. So everybody’s rates keep dropping. Over time, this means everybody’s income is eroding at the same rate.  Think about it. How are you supposed to maintain a thriving practice when your income is gradually declining, and your expenses continue to rise? It’s like watching that disaster unfold in slow motion over the last two decades (I’ve been around for a few of those decades). I don’t know how long you’ve been around, but it’s coming. Every physician is caught in this downward spiral, and they better realize it, because it’s going to be too late. 

Inflation in Healthcare

So let’s talk about something we all feel, but maybe it gets overlooked. In our office, when we buy supplies, we’re experiencing quite a bit of inflation.  It’s over the last two or three years, the cost of essential medical supplies has skyrocketed by 20 or 30 percent; Lidocaine, maybe 200 percent. It’s just crazy! I’m talking about syringes, medications, IV bags, and everything you need to run a practice – is going up in cost. But if you look at government stats, like the Medicare Economic Index, you’ll see a 4.5 percent rise in practice costs over that time, following a 3.8 percent increase in 2023.  Honestly, I’ve got to call BS on that. That’s just ridiculous. We all know the difference, and on the ground, it is so much harsher  And you’re stuck if you’re taking Medicare. In 2023, inflation was pegged by the government at 2 percent. Yeah, I don’t think so. We all know that doesn’t capture the picture when your supply costs are rising at double or triple that rate. The official stats don’t mean anything.  And it’s just another layer of pressure on an already unbelievably strained system.

Looking Ahead

So looking ahead, it’s going to get better, right?  No. The outlook doesn’t get any brighter in 2024. We can expect Medicare to do a 3.36 percent pay cut, while inflation is going on in the background, and they’re cutting in the foreground. And in 2025? You probably know – no pay raise. You’re not getting any pay raise; it’s not going to happen. Even though, inflation is absolutely going to continue to climb relentlessly.  So here’s the question – How can doctors maintain their practices under these conditions?  I think everybody is squeezed as hard as they can to make it work, and the math just doesn’t add up. You’re being asked to do more with less. And it’s no wonder so many physicians are burned out and disillusioned with the system. If you want to look at the causes of burnout, well, look at the numbers. I think that’ll give you a pretty good idea. 

What About MIPS?

And then there’s, of course, the lovely Merit-based Incentive Pay System, also known as MIPS. MIPS, for me, stands for Monkeying In Physicians’ Stuff. It doesn’t stand for Merit-based Incentive Pay. If you’re unfamiliar, MIPS ties Medicare payments to quality, cost, your technology, and practice improvement. Sounds pretty good. That’d be great if they were actually able to measure that.  But, here’s the reality. In the United States, there are about a million doctors. 308,000 of those doctors (based on the monkeying and physician stuff program), are facing a 9 percent cut next year – on top of the 3.36, on top of inflation, and it’s a bureaucratic nightmare. It demands about an hour of time from a doctor – to comply every week with the rules, check all of the boxes, and fill out the forms. So that means that an hour a week costs a doctor about 13,000 a year on top of everything else.  So, Is it worth it? Is patient care really improving? Are we seeing said, “Nobody’s going to the hospital anymore. Everybody’s living five more years”? No, it’s going the opposite direction and we’re just seeing another layer of administrative burden to an unbelievably crippled profession, just burdened down. It is ugly. 

The “Moral Obligation” Debate

So, I find this to be a difficult topic – the moral obligation debate. There’s this (I think pervasive) belief, that physicians have a moral duty to provide care, regardless of a patient’s ability to pay.  That’s true in the emergency room under MTALA, but it doesn’t really apply legally in any other area. It’s almost like we’re expected to work for free, even though that expectation isn’t placed on other professions. My dentist – he’s really really good at what he does, but he’s not expected to perform pro bono work without compensation or some kind of trophy (or something). The same goes for lawyers. They do pro bono work (they call it), but the state pays them, and it’s acknowledged. So, why are we supposed to be able to shoulder the burden of taking care of everybody’s health care for free? Morally, I don’t feel compelled, and what I call that, is “cognitive dissonance –  It doesn’t make no sense.”  It’s high time that we question it. It doesn’t make sense if we want to create a sustainable fulfilling practice. We need to rethink the whole Expectation story. It’s just craziness  

THE Solution to this Healthcare Crisis

So what’s the solution? Well at this podcast, we advocate for eliminating completely – The third-party payers from the doctor-patient relationship. Entirely. Completely. Totally.  No insurance – none of it, ever, no matter what. Patients ask (and we’ve done it for 30 years, successfully), and they ask and we say, “no, we won’t”. And they say, “please do it”. And every time that we say “no”, our practice gets stronger and better. Because if you go the other direction, you’re going to buy into that incredibly difficult, difficult, difficult, difficult, difficult, difficult, draining system.  When you move to a cash-based model, you regain control. You set your prices based on the value you provide, not on what Medicare (or the insurance companies) tell you your time is worth (which, by the way, your time is worth less every year, according to them) It doesn’t seem to me that you’ve done anything to really deserve that.

A Healthier Practice

This shift also brings financial transparency, so you and your patients know exactly what to expect. They’re not getting funny bills all over the place – three weeks later, four months later, five years later, whatever. And beyond the financial benefits, there’s something even more valuable for you – Freedom; freedom to practice medicine the way you believe is best. If you think a patient needs something, you can do it. You just arrange with the patient – let them know that it’s going to cost them a certain amount of money (or you give them a certain amount of time, and that’s fine).  Part of that, is you have the freedom to build relationships with your patients without third-party payers telling you, “you got to keep going, doc (every 8 or 15 minutes or whatever), you got to move and move faster”. “Move faster this year than you did last year”. “I know you’re a year older, but go faster”. You’re free to focus on what really matters – providing excellent care. I think that’s why you probably became a doctor at one point or another, before you possibly got just overwhelmed by the situation that we’re in. You probably thought. “That’s what I’m going to do  I’m going to be such a good doctor. Man. I’m going to do this thing!” So, along the way, we’re going to share success stories from docs who’ve made this transition, and they’re thriving – professionally and personally. They found a way to escape the slow-motion train wreck and build the practice of their dreams. 

You CAN Do This!

I want to say you learn to say. “No!” (and mean it firmly, with conviction!), “No!” to third-party payers. It’s not about rejecting payment. It’s about reclaiming your autonomy, ensuring that you’re fairly compensated, and ultimately providing better care for your patients. Admittedly, it’s a bold move; but one that can lead to freedom and a stratospheric increase in satisfaction in your medical career.  If you want to maximize your cash practice or start out on the right foot in a new practice, you need to check out our Cash Practice Scorecard. It’ll help you make all the right decisions from the very beginning. So for all the tips and resources, visit cashpracticesolution.com.  I’m Dr. J. I’ll see you on the next time on the Cash Practice Solution Podcast and we’ll discuss three simple secrets to a successful cash practice. Until then – listen to your patients (they know everything about themselves), learn what they know, and love them the best that you can; because that will build up your practice better than anything else, and you will be unstoppable.  Look forward to seeing you next time.