Unhealthy balance sheet

For a moment, put yourself in the position of a person responsible for a business that holds clients’ lives in the balance. You’ve undergone years of training—little of it in business or finance—accumulating hundreds of thousands of dollars of student debt in the process. You must maintain an office equipped with technology, including a sophisticated computerized records system, and employ professional staff. It’s a venture with a lot of overhead, numerous regulations and many moving parts.

Here’s the kicker: You can’t control your bottom line.

Unlike most every business, where prices stem from the cost of providing goods and services, medical practitioners find themselves at the mercy of insurers. What insurance companies and the government will pay, that’s what they get.

Particularly vulnerable are doctors in private practice, as individuals or in small-group offices, because they lack the leverage of larger organizations when negotiating. As detailed in Newslines (see “Intervention accepted,” by Meredith J. Cooper, page 10), Dr. Roy Bishop has sold his practice in Chico, Argyll Medical Group, to a corporation that owns offices in other areas in the hope of benefiting from the economy of scale.

The majority of patients seen by doctors and hospitals in Butte County rely on government-funded insurance: Medicare, MediCal or a subsidized Covered California policy. Unfortunately, these plans reimburse providers at different rates than private insurers.

Because outside entities set their payments, doctors wind up losing money when they see certain patients. Forget what George H.W. Bush said—voodoo economics is health care’s economics. For something this vital to every American’s life, it’s time to streamline the system to make care more accessible and equitable.