Tuesday, September 20, 2005

Strike Michigan From The List...

...of states where I would consider practicing. It seems that the governor of Michigan sees physicians as an overly wealthy group of folks just ripe for the picking. An article in the September issue of Surgery News (not yet online; should be available soon here) describes efforts by Gov. Jennifer Granholm (D-Mich.) to pass a tax on physicians that would "help increase payments to Medicaid providers in the state."

Under the governor's proposal, a 2.28% gross receipts [not net] tax would be levied on all physicians in the state. The tax would raise $96 million, which would then be put into the Medicaid program and would increase the amount of matching funds the program receives from the federal government...."the state keeps $40 million, and then the $56 million left would be paired with Medicaid matching dollars, so we can return $125 million to providers, bringing [reimbursement] up to Medicare rates."
Hmm. A tax on gross receipts means taxing the income coming into a physician's office before paying any of the other overhead that physicians face --- it is important to remember that the vast majority of physicians are in private practice, running small businesses --- such as rent (rising), health insurance (rising), other taxes (rising), malpractice insurance (rising), and the costs associated with complying with Medicare regulations (rising).

I have a few obvious concerns with this approach, which is already in effect in Minnesota, West Virginia, and New Mexico (the latter two states have seen a net loss of physicians over the past few years):
  1. Why does the state keep $40 million, if this is all supposed to benefit state Medicaid recipients? What will that money be used for?
  2. Does anybody else live in a state where "lottery money" was originally earmarked for, say, education, but somehow ended up in the general fund (it certainly happened here)? Ditto with the tobacco lawsuit settlement money, which was always piously described as needed for health care -- and was used here as a ready piggy bank to raid? Anybody care to speculate how long it would take before the state dipped its hands into this pool of cash?
  3. If we are to levy a special tax on a specific profession for certain cash needs, why not expand the list? A tax on attorneys' gross receipts to pay for the legal expenses of the indigent. A tax on grocery workers' gross income to pay for food stamps. A tax on ambulance drivers' gross income to pay for the emergency transport of critically ill or injured patients who cannot pay their bill. A tax on the gross income of firemen to pay to rebuild the houses of those who could not afford fire insurance when their homes go up in smoke. A tax on writers' gross income to fund library districts. A tax on teachers' gross income to help pay for public school expenses. The list is endless.
You know, if Medicaid funding is a problem, it is a problem for the entire state to deal with. Saddling physicians, who are caring for these patients at very low reimbursement rates, with an extra, pre-standard tax, pre-overhead expense tax is essentially asking them to leave your state -- or simply never come there in the first place.