Where the money isn't

The Baltimore Sun

Dr. Ronald Sroka has been a family care physician in the same Crofton location for 30 years, just six miles from where he grew up.

He's the president-elect of the Maryland State Medical Society, he was voted favorite physician last year in the local Suburban Scene publication, and he counts his high school principal among his many longtime patients.

Simply put, Sroka loves what he does. But this is the last year he may be able to afford to do it.

Half of his 4,000-client practice relies on Medicare to pay their bills, and Tuesday, a 10.6 percent reduction in Medicare reimbursement rates will take effect unless Congress intervenes.

But even without the cuts, some doctors like Sroka aren't sure their practices can survive. Private insurers reimburse at lower rates in Maryland than elsewhere, and the cost of living and overhead here are high, as are malpractice premiums. It's all adding up to a crisis, health care providers say. Practices may drop Medicare patients, and some will fold altogether.

Already, Maryland has a shortage of clinical practice physicians in several regions, and that's expected to worsen as young doctors increasingly forgo private practice for salaried positions or leave the state for areas with higher reimbursement rates.

"The long and short of it is I was a wealthy doctor 15 years ago. I'm a struggling doctor today," Sroka said. "I am at the point now of thinking about quitting."

In 1997, Congress passed a "sustainable growth rate" provision that established target expenditures for physician services under Medicare. It was designed to control expenditures by estimating how much practices would grow annually and providing a budget each year to cover such reasonable expenses.

But practices always grow faster than projected, said Gerard F. Anderson, a professor of health policy and management at the Johns Hopkins University Bloomberg School of Public Health. There are more patients each year, more services performed and more tests being ordered, all of which raise costs, he said. And that triggers a proposed reduction in reimbursement rates, which means doctors' expenses are going up while their payments are proposed to go down.

Federal lawmakers in the past stepped in to stave off annual reimbursement cuts, but they failed to do so last week and have now left for their weeklong Fourth of July break.

A bill that would have converted the cuts to a 1.1 percent increase next year passed overwhelmingly in the House, but the Senate was one vote short of the 60 needed to take up the issue.

The bill could still be considered and implemented retroactively, though Senate Republicans and President Bush oppose its proposal to take money from private Medicare Advantage plans.

Another cut, of 5 percent, is on the table for January. According to the American Medical Association, Maryland doctors would lose $190 million in payments for caring for elderly or disabled patients during the next 18 months if both cuts take effect. That breaks down to an average of $16,000 per doctor. The loss could be larger for doctors like Sroka who have a high percentage of Medicare patients.

"There is a rationale for it; it's not just an arbitrary cut. It happens every year, and so far it has always been resolved. But sooner or later, it's going to be too expensive to get resolved," Anderson said.

It would cost Congress $150 billion to end the annual haggling and revamp the system, he said, and that's money it doesn't have.

"Doctors are on the brink of not accepting Medicare patients," he said.

Maryland doctors say the situation here is worse than elsewhere, relying on a years-old Government Accountability Office report that shows the Baltimore region at the bottom of 319 urban areas when it comes to private insurance reimbursement rates. But insurers offer a different set of numbers and say their interest is keeping premiums affordable for members and reimbursement rates adequate.

CareFirst BlueCross BlueShield, Maryland's largest insurer, said it factors in Medicare rates when setting its own, though the two are not directly tied. The company implemented a quality rewards program this year that lets doctors earn up to 7 percent above standard reimbursement rates if they take certain steps such as using electronic record systems or ensuring that patients get regular preventive exams.

"We recognize that changes are necessary, for example, to more closely link the quality of care with reimbursement levels," CareFirst said in a statement. "CareFirst is committed to ensuring that its reimbursements to physicians and other medical professional are fair, appropriate and competitive."

Last year, Gov. Martin O'Malley appointed a task force to study health care access and physician reimbursement rates in Maryland, to better know where the state stands nationally and what can be done to improve the situation.

It's generally accepted that rates in Maryland are on par with others in the Mid-Atlantic but lower than in other parts of the country, said John M. Colmers, the state's secretary of health and mental hygiene and the task force's chairman. But the fix has to be about more than reimbursement rates, he said.

"This is about a very complicated set of issues in health care. Whether it's access to quality or cost containment, there are ways in which they all interact with one another, and physician reimbursement is not different. And so solutions have to be done in a fair and balanced way," Colmers said.

The whole system needs to be revamped to make sure quality of care is addressed along with compensation, he said.

"Right now, the system is such that the more you do, the more you get paid, not necessarily the better you do, the better you get paid, and I think physicians are frustrated, many of them particularly in primary care."

Doctors have been "complaining for some time" about reimbursement rates and malpractice premiums, acknowledged Del. Peter A. Hammen, chairman of the Health and Government Operations Committee.

A few years ago, Maryland passed a law to lower the skyrocketing costs of medical malpractice insurance, and rates have stabilized some, the Baltimore Democrat said.

"However, many people still feel that they are high," he said. "Obviously, that affects the physician's bottom line. There still needs to be more discussion."

In 2005, as Maryland legislators were working to lower malpractice premiums, Dr. Timothy Biddle was taking a hard look at his career. He was working in his second private practice, sharing a Crofton office with Sroka, and didn't like what he saw in terms of reimbursement and general overhead bills.

"I thought, I'm not sure I want to do this for the next 30 years," the Eastern Shore native said.

Biddle quickly learned that practicing medicine isn't just about interacting with people, but also about running a business. He was working long hours and not spending the time he wanted to with his patients or his wife and four children. Biddle decided to leave and took a salaried position as a physician with the Department of Defense.

Now, he works from about 7 a.m. to 3:30 p.m. or so every day. There are no nights or weekends, and he's home in time for dinner. Best of all, he has some stability and a steady paycheck. He graduated from medical school $150,000 in debt, and at 40 years old is still working to pay those bills.

"People have to raise families, and they're likely to go where the money is," said Dr. Bruce M. Smoller, the current president of the Maryland State Medical Society.

His organization recently sponsored a physician work force study to gauge Maryland's staffing needs. While some dispute the study's figures, most agree that there are doctor shortages throughout Maryland, particularly in rural areas and within certain specialties, including primary care and anesthesiology. Colmer's task force is looking at ways to turn that around.

"If [changes don't] come about, there's going to be dire consequences in the field of medicine," Sroka said.

In the past eight years, he has lost five doctors from his practice. Now he's the only physician left, and he's not sure he can afford the $439,000 it costs to run his office. The most he has ever brought in to the practice in a year is $425,000.

"I have to look at it now from a financial standpoint. It ruins the emotional atmosphere in the office," Sroka said. "I can't practice based on what I think is good medicine; I have to practice based on what's good business."

tricia.bishop@baltsun.com

By the numbers

10.6

Proposed percentage cut to Medicare reimbursement rates set to take effect July 1

42

Percentage of Maryland doctors over age 50, an age at which physicians typically consider scaling back their practices

3,274

Number of physicians in clinical practice in Maryland

644,028

Medicare patients in Maryland

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