Medical News, June 2009, See the printed article here

A recent study in Kansas City revealed that 40% of the physicians in the area intend to stop practicing medicine within the next ten years. That figure surprised a lot of people and scared even more. It also raised a lot of questions. What will this mean for the future of medicine in Kansas Cit y? How will this impact patient access to care? Perhaps most importantly though it begs the question, Why?

Certainly a lot of the answer focuses on physicians getting older along with the rest of the population. However, looking at research on the business side of OB/GYN practices here in the Commonwealth, we begin to see, like in Kansas City, there are reasons many doctors may be getting frustrated with the business of practicing medicine.

A 5-year study, written in 2005 and performed by IQS Research, the parent company of the Center for Healthcare Reimbursement, looked at OB/GYN practices as well as practices in other specialties.

This study compared the cost of practicing medicine against the reimbursement for the same time period. IQS Research found that the biggest challenge for the OB/GYN was flat to moderate growth in reimbursement that was being offset by significant
growth in medical practice costs.

When costs exceed reimbursement it is the doctors that are squeezed in the middle.

As with any business, the owners, in this case the doctors themselves, can only make as much money as is supported by profit
remaining on the bottom line. With that profit margin continuing to dwindle, many practitioners are considering exiting the practice of medicine prior to retirement age.

Whether they choose to reduce their practice hours to part time, seek a career outside of healthcare, stop taking call or move to the administrative side of medicine, the outcome is the same – fewer doctors practicing.

Greener on the other side?

We have seen statistical differences in both reimbursement amounts and practice costs when comparing similar practices throughout the Commonwealth. But the question still remains, “Is the grass greener on the other side?” That is to say, if you leave the Commonwealth, do the economics look better? The answer, at least as it applies to reimbursement, is “it depends.”

Looking at the chart below we can see that there are significant differences when we compare OB/GYN reimbursement rates for our KY city to cities in other states. For this analysis, the large KY city is compared to 4 similar sized cities and one smaller city (city 5), all outside of KY.

As you can see, the KY city fares worse in reimbursement for all but City 1.

In some cases, we find differences as high as 40% to 48% with doctors in the KY city making less. Even when the KY city makes more, as when compared to City 1, the difference is just 5%.

What does this mean for OB/GYNs in the Commonwealth?

The business of medicine is tough and it doesn’t show any signs of getting easier. However, if we can continue to get the message out about the unexplainable disparities between reimbursement, then perhaps we can begin to make a difference for the profession.