A Financial Model of the 100% Medicare Practice

What are the implications of a single-payer health system in which private insurance would be eliminated and practice finances would be solely based on Medicare as it exists today. This paradigm would be a unique and especially problematic issue for anesthesiologists. Presently, the profession is faced by an inimitable discrepancy in the Medicare payments for anesthesia services. This is known as the “33% Problem.” While Medicare reimbursement payments for other specialties represent between 75% and 85% of their commercial rates, compensation for anesthesia services is less than one-third of commercial rates. In fact, recently it has been concluded by some that actual Medicare payments are probably in the mid-20% range. If this was the universal payment system, it would introduce a significant threat to the long-term stability of most anesthesiology practices. Many groups address the compensation “shortfall” described above by negotiating to fill the revenue gap with payments from hospitals....