Reading clues to a reshaped future
In this video, Ron Harman King CEO of Vanguard Communications describes the 2018 elections’ likely effect on healthcare, and what the future holds in regards to physician salaries.
As I reflect on the outcome of the much anticipated 2018 mid-term elections, I can’t help but seize on a variation of Mark Twain’s famous comment about the weather: Everybody talks about fixing healthcare, but nobody does anything about it.
Well, this year, the majority of voters appeared quite ready to circumvent Washington gridlock and do something themselves. Prior to the election, polls consistently found healthcare to be top of voters’ minds, with as many as 71 percent of voters rating healthcare as a “very important” part of their decisions.1 Some polls found that for many voters, healthcare was more important than the economy, immigration and gun policy.2
Okay, now that we’ve seen some sort of blue wave of arguable dimensions, what impact will election results have on frontline healthcare providers? Good question. I won’t pretend to know with resounding certainty. But, there are tantalizing clues as to what the reshaped future holds, notably for physician earnings.
Red swings blue for Medicare expansion
First, voters in three of the nation’s reddest states – Idaho, Nebraska and Utah – voted to expand Medicaid coverage under the Affordable Care Act (ACA). Of the four states with such ballot measures, only Montana rejected expansion. However, a majority of ever-contrary Montana voters also re-elected Democratic Senator Jon Tester, an outspoken advocate for affordable healthcare who has even expressed openness to the idea of a single-payer health system.
In addition, Democrats who campaigned on Medicaid expansion also won gubernatorial races in Maine and Kansas, where Republican governors had previously rejected it. To be sure, pro-Medicaid candidates did not win everywhere. Yet, polls show strong support for expansion even in conservative states. To date, 37 states – three-quarters of the total – have opted for expansion.
A second possible clue comes from a handful of funding-, billing-, and quality-of-care-related ballot measures in three states. In Maine, voters turned down a proposal to enact a payroll tax and nonwage income tax that would have funded long-term care for seniors and the disabled living in their homes.
Meanwhile, Californians rejected a statewide proposition that would have restricted profits of kidney dialysis centers, plus two local measures that would have limited general healthcare charges. And Massachusetts electors defeated an effort to mandate nurse-patient ratios in hospitals.
What should we make of this mélange of local initiatives? It’s hard to draw sweeping conclusions from such a small sample, but my gut detects two possibilities. One is that voters prefer healthcare funding on a national basis, rather than taking on the burden locally.
Money always talks
Another is a sign of public reluctance to get into the weeds of managing healthcare costs and clinical operations, in deference to the free market. Their hesitance could be wise, although I should note that large corporations often spend millions to defeat healthcare cost-control ballot initiatives. For example, the nation’s three largest for-profit dialysis providers spent more than $70 million to defeat California Proposition 8, underscoring the persuasive power of money.
Nevertheless, in my assessment, all this points to physicians soon seeing an increase in poorer, sicker and perhaps older patients. Many, no doubt, are suffering long-neglected chronic health problems requiring extensive care and medications.
How much will ongoing Medicaid expansion tilt the balance of payer mix from commercial to lower government reimbursements? And will physicians see a subsequent decline in earnings?
What does this mean for physician salaries?
Recent history suggests they won’t anytime soon. Surveys have shown that doctor incomes have risen steadily since most of the ACA’s provisions went into effect on January 1, 2014.3 Further, one survey found that doctors got one of the largest-ever annual raises immediately afterward. Of 20 specialties surveyed, 19 saw pay increases. Family physician income rose 13 percent in a year, and internists and pediatricians got a 15 percent boost. Other increases ranged from 4 percent for orthopedists to 16 percent for OBGYNs to 21 percent for otolaryngologists.4
Of course, let’s not forget the power of a roaring economy. Record employment levels have combined with record participation in healthcare insurance to generate a flood of patient visits to doctors’ offices and hospitals coast to coast. The inevitable consequence is a rising demand for healthcare professionals, driving their incomes upward.
Happily for consumers, the rate of growth in commercial insurance premiums also appears to be stabilizing, even if healthcare costs overall aren’t. For the latter reason and others, some economists say that our current healthcare system is not economically sustainable in the long run.
Still, I choose optimism in my forecast for the state of our national health system. In just two years, public opinion of so-called Obamacare has shifted to more Americans approving of the ACA than disapproving.5 With the 2018 election, attempts to overturn ACA protections for pre-existing conditions are DOA for at least the time being.
Voters clearly want broad access to doctors, even for the economically disadvantaged. Yes, how to pay for it will be a continuing political battle. But in the meantime, I would summarize the impact of the 2018 election on healthcare by invoking Mahatma Gandhi’s saying: “When the people lead, the leaders will follow.”
- Henry J. Kaiser Family Foundation, “Poll: As midterms approach, healthcare remains voters’ top issue,” Oct. 18, 2018
- Benjy Sarlin, “Midterm exit polls: Health care is top issue for voters,” NBC News (November 6, 2018)
- Medscape Physician Compensation Report 2018
- Tully, S. (2016, June) Obamacare Isn’t Stopping Doctors’ Incomes From Soaring. Fortune.
- Kaiser Health Tracking Poll: The Public’s View on the ACA