Healthcare costs are going through the roof. In 2000, healthcare expenditures rose by 6.9% over the previous year. That is the nearly the biggest jump in a decade. Premiums for health insurance are also rising at a deadly rate. The average cost of healthcare benefits for an active employee rose 11% in 200l. In this and the next year, employers must deal with rate increases of 13-20%. The reason for the increase is not so insurance executives can take a one-month cruise to the Greek Islands. The rise in premiums is to cover 60% of the 1.5 trillion dollars price tag for hospital and physician services in 2001. The ticket is projected to increase to 2 trillion bucks by 2005 largely due to the facts that we are an aging society, demand high price care and the most expensive drugs. Although many of our hospitals are solvent today, the above crisis is likely to paint hospitals and patients with blood-red ink in the near future for the following reason. As the employers struggle with the rising cost of group insurance, a greater part of the cost will be transferred to the employees. Many Americans currently pay 10-25% of their total medical costs out of pocket (in the form of co-pays, deductibles, and drug costs). When the shift comes, a huge number of folks will not be able to accept the higher costs and will be left with no insurance coverage at all. Eventually they will become ill and arrive at a hospital door.

They will still be given state-of-the-art care but the hospitals will not be able to absorb the flood of uninsured patients and still remain solvent. Similarly, physicians will treat a greater number of patients who will not be able to pay for services. The ethics of our profession separate medicine from regular commerce. That is the background of the painting. Now for the details. The colors of this painting are mostly shades of gray and a grim black.

Physicians in private practice (solo or groups) are actually owners of small companies which are their practices. They currently provide employee health insurance. They, like other businesses, absorb the rising insurance costs; but unlike regular commerce, physicians cannot raise prices to cover overhead advances. Quite the contrary, in the Medicare program, the government has scheduled reduced payments for physicians’ services of 5.4% this year and another reduction of 5.7% next year in order to balance the budget. In addition, malpractice premiums have been launched into orbit with an average increase of 20% this year with the expectations that the increase will double that in the next three years. In some states, physician malpractice premiums have risen 300%. The Georgia malpractice crisis is due to the decision of one of the largest medical liability insurance companies in the country, The St. Paul Company, to pull out of the health care market. Nationally, that left 450 hospitals and 42,000 physicians without coverage. Many are Georgia physicians with less than Picasso’s on their waiting room walls. Last year the state’s largest insurer of hospitals, MAG Mutual stopped writing policies for hospitals. Because of the outrageous medical malpractice sums given in our courts today, insurers have not been able to remain in business. The impact of these events in the healthcare medical-legal arena is to be felt by the patient as well as by the hospitals and the physicians. Don’t be surprised if you have trouble getting an obstetrician, a neurosurgeon, a heart surgeon or an orthopedic surgeon to accept a high-risk case. Don’t be surprised when your physician orders numerous seemingly non-essential tests as they are part of recommended “defensive medicine” program.

The final details of the Perfect Storm painting of medical practice relate to the general, non-medical business costs of practicing medicine. Just as in the fashionable clothing stores and the law offices with wonderful original Jack Leigh photographs and original Ray Ellis paintings, doctors also must pay for rent, lights, equipment and staff salaries. The government, while reducing payments to doctors, has not sought to reduce a physician’s general overhead by the same 11% over the next two years. To truly appreciate this finished painting of the Perfect Storm, stand back and admire the coming together of the components of this disaster for American physicians. All costs to physicians in order to practice their art are rising. The insurance (private and government) payments are falling and the number of insured patients is destined to fall. To the reporter and other patients\art critics who complain about the art in the doctor’s office, I suggest they look at this painting and marvel that the physician still has a practice and walls on which to hang his inexpensive art. Unless we find some solutions, the wall, the patient, the physician and the real art he practices will be lost in “Perfect Storm.” At the present time neither the government, the private sector, nor the patients offer an alternative to this work of art which has been in the making for four decades. It is not a pretty picture.