All of us are well aware of rising costs in healthcare. It is easy to watch news or podcasts to hear about the expenses associated with medical care, hospitalizations, medications, and diagnostic tests. Lately, questions about the future of Medicare and Medicaid have been ongoing conversations in the media. It can get both confusing and frustrating. Bear with us as we try to clarify some basic points related to challenges in healthcare today.
1. Access to care
Access to physicians has significantly changed over the years. The days of your family doctor being able to see you quickly or discuss a concern on the phone with you are almost unheard of in current health system structures. Physician schedules are booked to allow for maximum utilization of their available time due to razor thin financial margins. Office calls and scheduling are handled in central call stations. The ability to develop a relationship with one primary care physician (when you are able to actually find a physician) is rare.
The need to see a higher volume of patients in limited appointment time slots, often interacting with a practitioner that is not fully familiar with your treatment history, causes tremendous stress on the patient and the physician. In addition, the amount of documentation required for each visit increases with each new code or “quality indicator” that the insurance companies request. This leads to increased rates of physician burn out.
Replacing physicians has gotten to be extremely challenging. The aging population, a large proportion of physicians retiring, the cost of medical education and the current state of healthcare delivery has decreased the number of physicians available. Add the constant competition between health systems, well, there just aren’t enough doctors left to hire.
To help decrease this burden, practices turn to Advance Practice Practitioners (nurse practitioners and physician assistants) to help cover the patient need. These practitioners have become essential in the healthcare field today. Although vital to care, Medicare and commercial insurance carriers reduce reimbursement for their services by 15%.
Unfortunately, for healthcare to be sustainable, there needs to be a stronger focus on the fiscal aspect of the patient interactions. Healthcare became a business.
2. The business of healthcare
Many people believe the cost drivers are physicians charging higher rates for services. For most office visits, all physicians (regardless of the specialty) are paid the same rates, based on the Medicare fee schedule. When adjusted for inflation, Medicare physician payments have declined by 30% between 2001-2025, most recently dropping 2.8% in January 2025.
All insurance companies base their payment rates on the same Medicare payment schedule so when Medicare payments decrease so do all other insurance company payments.
Over the same time period that physician payments have declined by 30%, the cost of managing a medical practice has increased by 47%. The cost of medical supplies, medications, salaries, and health insurance for our employees increase annually, similar to other small businesses. This is a significant reason why there are less independent physician practices across the state. The default is then to be acquired by a health system and physicians become employed. While a physician always has an ethical responsibility to advise on behalf of the patient’s best interest, being employed adds another layer of responsibility to the fiscal survival of a health system as well.
3. Less access, less practitioners, less care
Unfortunately, healthcare cannot cure itself. Most of the issues we briefly discussed are squished into a quagmire of regulations that tend to support the ongoing drivers of healthcare costs. Insurance companies, pharmaceutical companies, and political players benefit with the ongoing tendency for wealth to accumulate at the top. These regulations support high bonus payouts and increased salary for those that oversee the payment process. The proverbial fox guarding the hen house. Sadly, those cost drivers have yet to be addressed in any meaningful way.
4. What can be done?
Here are a few thoughts.
- Choose your healthcare wisely. Folks today spend more time researching restaurants than considering options for their medical care.
- Support your local independent practices as they try diligently to provide the best care at the lowest cost. Many independent physicians can offer services beyond an office visit such as blood work, xrays, and medication infusions at a lower cost than the health system.
Healthcare systems are permitted to charge “facility fees” that were created to help offset the costs of 24/7 healthcare services. But they can be costly, and they will hit your deductible at a much faster rate.
- Seek out independent practices that do not utilize centralized services for scheduling and phone calls. In most practices, you can still contact the office directly, ask about scheduling changes, and speak to the physician when appropriate. You can have confidence that the practitioner is aware of your history and your treatment needs.
- Spread the word. If there is a physician group where you were treated well, tell others. The more we support good healthcare options, the healthier the community becomes.
- Ultimately, this isn’t something the physicians by themselves can repair. It does involve a stronger voice and it does involve political support. Talk to your local representatives. Make your voice heard on issues of your healthcare needs and the expense of healthcare options.
As Dr. Francis Peabody once stated “the secret of the care of the patient is in caring for the patient,” and the business of healthcare should be similarly focused.
