What do you mean by overhead?

The late Dr. Parke, the physician for more than a few of my current patients, is a good starting point to discuss this idea. He retired in 1976. I don’t have all the facts of his practice, but I am told, he still delivered babies, did house calls, and was an all around country doc. He had one front office staff and a nurse and his office notes were 2-3 lines long with his charge next to the note. There could be many visit’s notes on the same hand written page. He was able to spend most of his time seeing patients and needed minimal help doing so. If there were four Dr. Parkes’ working in an office, they would need 2 or 3 front office staff, and 1-2 nurses – a total of 4-5 staff.

In Contrast, for the four of us today, We have two receptionists, one person putting records into charts electronically, one person who bills the insurance companies, one who does the pre-authorizations and co-pay’s, a business manager, one person doing referral’s full time, a part time help keeping track of referrals and studies. In addition we have 4 nurses full time. So the count this far is 11.5 full time staff. This is not enough. I now need a certified coder, and an extra person to deal with all the paperwork from government and the insurance companies. If the doctors’ wanted to get back the 40% of their time doing secretarial work, I would need to hire 2-4 more people. Now I am up to at a minimum 15 staff – 3 to 4 times what was needed just 40 years ago. The three lined notes of Dr. Parke are now 3-4 pages long to “justify” good medical care.

In addition to this, supplies, rent, malpractice insurance, salaries, etc all are going up.

In all other sectors of our economy, if my overhead costs are going up, I increase my prices to cover those costs. In medicine, government and insurance completely control the prices (this is not a free market at all). Historically when I saw a patient on medicaid, I had to pay money out of my pocket to cover the overhead cost of that visit, seeing the patient for free. Medicare paid a little more than overhead for the office visit, while regular insurance made up for the losses from medicaid and inadequate payments from Medicare.

In addition to the price controls, Hospitals, federal health clinics, and larger practices can demand and get higher prices than we are allowed – in fact significantly more to cover all these increased overhead expenses.

Overhead (and lack of reimbursement) is the burden that will push private practice to extinction.

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