MEDICARE FOR ALL and Anesthesiology

the anesthesia consultant

Physician anesthesiologist at Stanford at Associated Anesthesiologists Medical Group
Richard Novak, MD is a Stanford physician board-certified in anesthesiology and internal medicine.Dr. Novak is an Adjunct Clinical Professor in the Department of Anesthesiology, Perioperative and Pain Medicine at Stanford University, the Medical Director at Waverley Surgery Center in Palo Alto, California, and a member of the Associated Anesthesiologists Medical Group in Palo Alto, California.
email rjnov@yahoo.com
phone 650-465-5997

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Multiple Democratic candidates for President of the United States are advocating Medicare for All. Medicare for All would decimate the specialty of physician anesthesiologists in America. Medicare for All would cause an exodus from the specialty of anesthesiology.

I’m an independent voter—neither a Democrat nor a Republican, and this column is not in opposition to Democratic candidates or in any way supportive to a Republican agenda. My aim is to inform my readers, both anesthesia professionals and laypersons, that if Medicare for All becomes reality, there will be a dire consequence regarding anesthesia staffing and services to patients.

The Medicare pay rate for anesthesiologists is a mere fraction of the current insurance pay rate. Based on the 2018 American Society of Anesthesiologists report, the national average insured conversion factor for anesthesia (the amount paid for a 15-minute time period of service) was $76.32. The current national Medicare conversion factor for anesthesia is $22.18, or only 29% of the 2018 overall mean commercial conversion factor.

Anesthesia practices have varying ratios of insured patients, Medicare patients, Medicaid patients (which pay slightly less than Medicare), and patients with no insurance (who often pay zero). What happens if every anesthesia patient pays only Medicare rates in a Medicare for All future? Let’s look at some examples.

If a practice currently has 75% insured patients and 25% Medicare/Medicaid patients, the income for that practice would be (.75 X $76) + (.25 X $22) = $62.50 per unit. Under Medicare for All, their income would be $22.18 per unit. This is a pay cut of $40.32 per unit, or a decrease in pay to 35% of their prior income.

If a practice currently has 50% insured patients and 50% Medicare/Medicaid patients, the income for that practice would be (.50 X $76) + (.50 X $22) = $49 per unit. Under Medicare for All, their income would be would be $22.18 per unit. This is a pay cut of $26.82 per unit, or a decrease in pay to 45% of their prior income.

If a plumber, an accountant, a truck driver, an attorney, or a fast-food worker was forced to take a pay cut to 35%-45% of their previous income, they would be upset. Would they be looking for another career? Probably.

If a physician anesthesiologist is forced to take a pay cut to 35%-45% of their previous income, they will be upset too. Will they be looking for another career? Probably.

Expect the exodus from physician anesthesiology to look like this:

  • Older anesthesiologists would simply retire, rather than work for 35%-45% of their prior income.
  • Medical students who are evaluating different specialties for their lifetime vocation would look at anesthesiology and flee. Even prior to its arrival, it’s possible that the specter of Medicare for All in the near future will drive students away from careers in anesthesiology. Medicare pay rates for anesthesiology are significantly lower than Medicare pay rates for all other specialties. See the graph below, which shows the ratio of commercial pay rates/Medicare rates for various services. For most medical services, the ratio of the average insured payment/Medicare payment is between 1.0 and 2.0. This means that, at the lowest, the average Medicare rates are about 50% of insured rates. You’ll recall that the Medicare anesthesia rate is only 29.1% of insured rates.

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The declining number of the oldest and the youngest physician anesthesiologists would radically decrease the census of anesthesiologists in the United States. This likely would lead to an increased role for certified nurse anesthetists (CRNAs), and an eventual increase in the number of schools training CRNAs, but in the short term there would be no way to staff adequate numbers of anesthesia professionals. It’s possible the U.S. may increase immigration of anesthesiologists from other countries where, their pay rate is less than the new Medicare for All pay rate is in America.

Might Medicare for All be forced to quickly increase anesthesiology payment rates to secure an adequate number of physician anesthesiologists? Perhaps, but I wouldn’t bet on it. Medicare has always been a zero-sum system. If anesthesiologists are going to be paid more, then someone else would be paid less, and it would be hard to predict which specialties would be on the end of that further pay cut.

But take a deep breath and relax. Medicare for All will be debated for some time. Even if a liberal Democrat wins the presidency and Congress gains a majority of Democrats in both the Senate and the House, they will all have to overcome multiple powerful lobbies, including the medical insurance industry, hospitals, the pharmacology industry, and organized physician groups. Currently there are so many jobs and so much money involved in the health care systems in American that the battle of Medicare for All will be a true war. Patients would have a significant transition as well. David Brooks wrote in The New York Times on March 4, 2019, “Right now, roughly 181 million Americans receive health insurance through employers. About 70 percent of these people say they are happy with their coverage. Proponents of Medicare for All are saying: We’re going to take away the insurance you have and are happy with, and we’re going to replace it with a new system you haven’t experienced yet because, trust us, we’re the federal government!”

If you’re a layperson, you may think Anesthesiologists are overpaid right now, that’s the true problem with what you’re discussing in this column. Keep in mind that anesthesiologists must complete four years of college, four years of medical school, and at least four years of post-medical school internship and residency training to become board-eligible for work as a physician anesthesiologist. LINK. This means they are at a minimum 30 years old, have borrowed hundreds of thousands in student loans to pay for their training, and have endured significant delayed gratification compared to others they went to college with. Procedural specialties such as surgery and anesthesiology are higher paying than primary care specialties such as internal medicine or pediatrics. Why? The work of procedural physicians requires specialized skills, and their work incurs more risk than interviewing and examining patients in a clinic. I have worked as both an internal medicine doctor and an anesthesiologist, and I can attest that it is almost impossible to harm a patient in an internal medicine clinic, while it is possible to lose a patient to anoxic brain damage in five minutes in an operating room as an anesthesiologist if you err. Risk during an anesthesia career is omnipresent.

As I stated on the home page of my blog, “The profession of medicine offers a lifetime of fascination, and no specialty is more fascinating than anesthesiology.” In addition, freeing patients from pain and ushering them through surgery safely is a wonderful vocation. But if anesthesiology jobs someday pay 35%-45% of their current income, the exodus of anesthesiologists will occur despite the fascination and emotional rewards of the profession.

Life will go on, there will just be less anesthesiologists, which will be OK unless you need one for your upcoming surgery.

Further information on proposed Medicare for All is available at their home page at http://www.medicareforall.org/pages/Know.

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