Doctors Say "No" in California

Dec. 11, 2013
Lower reimbursements in California have led to fewer physicians servicing the healthcare exchanges.

The Washington Examiner reported that about 7 of every 10 physicians in California (a blue state) are not going to participate in the new healthcare law, aka Obamacare, according to California’s largest doctor association.  The reason is easy to understand - the reimbursements are tied to California’s lower-than-Medicare reimbursement rates and the doctors are not willing to work for those wages.

Here are two examples cited.  A doctor will receive $500-$700 in other states for a tonsillectomy, but only $160 in CA.  Recurring office visits in general pay $76 in other states but only $24 in CA.  It is hard to keep the doors open at those rates, and doctors are only acting rationally by refusing to participate. 

This leaves a significant lack of doctors in CA to cover people moving to the exchanges; only 31,200 doctors participating out of an estimated 104,000 total potential.  That means that people who have signed up for low-cost coverage may find themselves going a long way for a provider and/or with a very long wait to see a doctor. 

It is hard to see how this is viewed as an improvement to the healthcare system.  It is also may have the unintended consequence of negatively impacting the health of the population in California and the related Gross State Product.  Workers that are absent due to illness reduce output, which reduces GSP and tangent to that, state tax revenues.  

About the Author

Alan Beaulieu Blog | President

One of the country’s most informed economists, Alan Beaulieu is a principal of the ITR Economics where he serves as President. ITR predicts future economic trends with 94.7% accuracy rate and 60 years of correct calls. In his keynotes, Alan delivers clear, comprehensive action plans and tools for capitalizing on business cycle fluctuations and outperforming your competition--whether the economy is moving up, down, or in a recession.

Since 1990, he has been consulting with companies throughout the US, Europe, and Asia on how to forecast, plan, and increase their profits based on business cycle trend analysis. Alan is also the Senior Economic Advisor to NAW, Contributing Editor for INDUSTRYWEEK, and the Chief Economist for HARDI.

Alan is co-author, along with his brother Brian, of the book MAKE YOUR MOVE, and has written numerous articles on economic analysis. He makes up to 150 appearances each year, and his keynotes and seminars have helped thousands of business owners and executives capitalize on emerging trends. 

Prior to joining ITR Economics, Alan was a principal in a steel fabrication company and also in a software development company.

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