Wednesday, March 21 , 2018, 11:18 am | Light Rain Fog/Mist 56º


Harris Sherline: Doctors and Health-Care Reform

Health-care providers will be further underpaid with the government in control

During the course of the debate over the Obama administration’s health-care initiative, from any perspective — that is, Republicans vs. Democrats, liberals vs. conservatives, legislators vs. the health-care industry — everyone has used extreme hyperbole, innuendo and downright misinformation in their efforts to sway public opinion and win the day for their team.

Harris Sherline
Harris Sherline

As the health-care bill was being negotiated by members of Congress behind closed doors without any apparent public input, accusations regarding the content of the proposed legislation captured the daily headlines, but perhaps no aspect of this has been more egregiously misrepresented than the role of the medical profession.

For the record, my bona fides to weigh in with an opinion about this include nearly seven years as the CEO of a small hospital.

Doctors in particular have been characterized as greedy, grasping and uncaring, ready to enrich themselves at the expense of patients and the government in any way possible, generally without any foundation in fact. The obvious purpose has been to sway public opinion in support of President Barack Obama’s health-care proposal.

Unfortunately, too often the notion that doctors are overpaid is given license in the effort to sway public opinion.

Quoting Obama in a speech he gave during his presidential campaign, Tom Blumer noted in his blog (Aug. 13, 2009): “So we are going to be taking steps, as part of reform, to deal with expanding primary-care physicians and our nursing corps. On the doctors’ front, one of the things we can do is to reimburse doctors who are providing preventive care and not just the surgeon who provides care after somebody is sick. Nothing against surgeons. I want surgeons. ... I’m not dissing surgeons here. ... All I’m saying is let’s take the example of something like diabetes ... a disease that’s skyrocketing. ... Right now ... if a family-care physician works with his or her patient to help them lose weight, modify diet, monitors whether they’re taking their medications in a timely fashion, they might get reimbursed a pittance. But if that same diabetic ends up getting their foot amputated, that’s $30,000, $40,000, $50,000 — immediately the surgeon is reimbursed. Well, why not make sure that we’re also reimbursing the care that prevents the amputation, right? That will save us money.”

Blumer also reported the response of one surgeon, who said: “... in fact, Medicare pays a surgeon between $740 and $1,140 for a leg amputation. This payment also includes the evaluation of the patient on the day of the operation plus patient follow-up care that is provided for 90 days after the operation. Private insurers pay some variation of the Medicare reimbursement for this service. ... Three weeks ago, the president suggested that a surgeon’s decision to remove a child’s tonsils is based on the desire to make a lot of money. That remark was ill-informed and dangerous, and we were dismayed by this characterization of the work surgeons do.”

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Such statements aren’t just unfair, they also graphically illustrate the glaring ignorance of most politicians — in this case, specifically Obama — about health care. The idea that doctors are overpaid for the services they provide to the patients of such programs as Medicare and Medicaid (Medi-Cal in California) is ludicrous.

In general, in California, services to Medi-Cal (Medicaid) patients are so grossly underpaid that most doctors no longer accept such patients. The last time I checked, in the area where I live, not one doctor would accept them, other than in an emergency situation.

In my experience, two specific examples illustrate the point: One was a general surgeon who was called in by our hospital’s emergency room for a consultation one night and billed just $50 for his service. After an extremely long delay, he received a check for only 10 cents. Thinking there had to be some mistake, he contacted Medi-Cal and was informed that 10 cents was all his service was worth, meaning it was all Medi-Cal could pay. In another similar incident, a neurologist was paid just 17 cents by Medi-Cal for an ER consultation.

In a March 17 article, The Seattle Times reported: “Walgreens, which operates 121 stores in Washington, won’t take any new Medicaid patients” because they are reimbursed at “less than the break-even point for 95 percent of brand-name medications.” Walgreens is the third drug-store chain in the state to stop filling prescriptions for new Medicaid customers.

Dick Morris noted that if Obama’s health-care plan is adopted, “physicians’ fees will be slashed by 21 percent.” This will add impetus to the trend of doctors who are planning to retire early because they are no longer willing to passively accept what the government decides to pay them.

The government determines, in its sole discretion, how much doctors and hospitals are paid for services to Medicare and Medicaid patients. The inescapable result of such government control is that health-care providers will invariably end up being underpaid.

— Harris R. Sherline is a retired CPA and former chairman and CEO of Santa Ynez Valley Hospital who has lived in Santa Barbara County for more than 30 years. He stays active writing opinion columns and his blog,

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