The Government as HR Manager

The Government as HR Manager

I never thought about the government as a Human Resources Manager until I started reading Chapter 11 of the textbook: Compensation Practices, Planning and Challenges. In particular, compensation is of interest in relation to the Medicare program. Fried and Fottler discuss compensation strategy and how to reward employees for performance in a way that is meaningful to them. As I thought about the ideas presented about compensation and how doctors might perceive their roles and positions, I began to wonder what their perspective is on the government as an HR Manager. Fried and Fottler state that, “organizations earn a reputation for the amount they pay employees.” Well, what type of reputation has the federal government earned in regard to Medicare reimbursement for physicians?

In my experiences of working with physicians overall, I can say that my perception is that doctors (especially primary care physicians) aren’t very fond of the Medicare reimbursement system. A common complaint of physicians participating in the program is that the reimbursement rates are way too low. And who can blame them? According to the Washington Post, doctors have been paid below market rates for DECADES. Current reimbursement rates are at 25 to 35% below commercial insurance. In fact, reimbursement has become such a sore point for physicians that 31% of primary care practitioners have chosen to limit Medicare patients within their practice. These doctors are fearful of more cuts—which they can pretty much count on because it happens nearly every year. Another 60% of doctors are at least entertaining the idea of removing Medicare from their practice entirely (Newman, 2010).

One of the biggest problems with the payment system is the fact that the way costs are calculated has not been updated in several years. Congress is very fearful of promising not to make cuts due to the huge financial costs. Apparently, freezing Medicare reimbursements for the next ten years (meaning no slashes to payments) would cost $276 billion. But, that’s just FREEZING costs…who knows what would happen if physicians actually started to be paid market value for services.

These reimbursement issues are a pretty big deal. More and more medical school graduates are choosing higher paying specialties—i.e. anything but primary care where reimbursement is often the lowest. The younger generation of physicians has caught on to the mess that is Medicare reimbursement. Patients that are privately insured are much more profitable, and young doctors will be opening practices right out of school that restrict heavy Medicare so not to get themselves involved with the conundrum that older physicians are in. It’s particularly difficult for older doctors to hire younger replacements if their practice is heavy with Medicare. Considering the fact that in Florida alone 60% of physicians are 50 or older, this could be a serious problem if younger physicians are unwilling to replace them (Fritz, 2002).

This issue is also pretty far-reaching into the future as practitioners speculate about what might happen once the nation goes to the new healthcare program in 2014. What kind of reimbursement can clinicians expect from the new system if Medicare is treating them so poorly? If enough doctors opt out of this new program access could end up being a huge problem—and the program was designed to improve access, right?

The bottom line is this: Nobody wants to work for free, including doctors. The government needs to figure out how to “reward employee performance” and “attract and retain high-performing employees” without breaking the bank (Fried & Fottler, 2008). But is that possible? Maybe the entire Medicare program needs a complete and total overhaul. In the future it’s not hard to see why doctors would “quit” Medicare and government programs altogether. Hopefully, the government will give our physicians more incentive to see Medicare patients. There’s nothing wrong with a little bit of optimism, but let’s just say I’m not holding my breath.

References

Fried, B.J. & Fottler, M.D. (2008). Human Resources in Healthcare: Managing for Success (3rd Ed.). Chicago: Health Administration Press.

Fritz, S. (7 October 2002). Young doctors may avoid Florida. Saint Petersburg Times, p. 3A.

Newman, M.A. (19 June 2010). A fix for the ‘doc fix.’ The Washington Post, p. A17.