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As a general rule, I try to stay away from political issues on this website. However, this is a website all about the finances of high-income professionals, particularly doctors, and this “political issue” directly impacts physician finances. I just spent my day, in-between night shifts, at a conference where some of the details of a plan that is being worked out behind closed doors have come to my attention. Let me give you some background information so you can understand the issue and why I think it is important for every reader of this blog, whether they live in Utah or not.
Utah, like some other conservative states, has not yet taken money from the federal government for ACA expansion. Obviously, since this is our money (last I checked I definitely paid a significant amount in Obamacare tax,) that's kind of stupid not to get your own money back. Medicaid expansion, at least starting in 2017, is paid for 90% by the federal government and 10% by the states. (until 2017, it's 100% by the federal government.) In Utah, Medicaid expansion means providing Medicaid for single adults up to 100% of the poverty line ($23,834 in 2015 for a family of four in Utah.) Children and adults with children up to 100% of the poverty line are already covered by Medicaid here. Families from 100% to 138% of the poverty line qualify for a 100% subsidy on a standard PPACA plan. So there is no doubt this expansion is a good thing for patients, doctors and hospitals (who are now often seeing these patients for free,) and for society at large who now has a better safety net underneath them in case of financial catastrophe.
The Gang of 6- Image courtesy of ABC 4
The Background
There were two competing plans in the Utah legislature this last session to get that money (back.) One passed the house but not the senate. The other passed the senate and not the house. So since the session ended six months ago, a “Gang of Six,” including the Governor, Lt. Governor, the sponsor of each of the bills (including a senator who is an emergency physician and one of my partners in another division of our group), the senate president (the senator in my district,) and the speaker of the house, has been working to find a compromise that will get through the senate, the house, and past the governor. Each of these men are good people wrestling with a difficult issue trying to balance conflicting priorities. Due to constitutional constraints, Utah cannot deficit spend, so not providing revenue to pay for this isn't an option. The “Gang” is also, to a man, like Utah, very conservative and anti-tax, so increasing the general tax rate (i.e. raising income tax on everyone) is not going to be very politically popular. So they have come up with a working concept/principle that “that those who will benefit from this expansion should be asked to give a little back in order to pay for it.” That sounds nice, doesn't it. It actually sounds more Marxist than conservative, which is part of the reason their proposal has surprised me so much. Here's what they mean:
They're going to tax hospitals and doctors to pay for it.
Literally. That's the plan. I was so appalled when I first heard about it way down in the opinion section of the local paper that I wrote a letter to the editor. How do you just tax doctors? Well, you do it by raising their licensing fees. However, it wasn't until today that I found out just how much that tax was going to be. By way of reference, in order to be a doc in Utah, you've got to pay your $200 fee, plus (for most of us) $731 for a federal DEA license and $100 for a state DEA license and if this is your first year applying, you also need to pay the $350 FCVS fee. The license fee in other states range from $130 in Wisconsin to $1002 in Texas and $1300 in the Virgin Islands, some of which require the FCVS fee and some of which do not.
$5,000 Physician Licensing Fee!
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So what will the new fee in Utah be? Well, the number being floated around by the Gang of Six is between $12.5M and $17M per year. Divide that by the 6091 doctors in Utah, and it comes out to $2,052-2,791 per year. Since your license is good for two years, your licensing fee is going to be something like $5K.
$5,000 to practice medicine! That's every doctor in the state. It won't matter if you work part-time. It won't matter if you take Medicaid or not. It won't matter if you only do volunteer charity work (how long are you going to do that when it costs you $5K a year to do so?) It won't matter if you're in primary care or the narrowest specialty. It won't matter if you're an emergency physician and already seeing 20-40% self-pay (i.e. no pay) patients. $5K or go somewhere else.
If this law is passed with this provision in it, Utah will become the only (or should I say the first) to place a direct tax on physicians. Now, you may not think this applies to you because you don't practice in Utah and don't ever expect to. You may not think it applies because you're not a physician (although be aware they seem to be considering including anyone else who gets Medicaid dollars- including pharmacists, occupational therapists, dentists, physical therapists, psychologists etc.) But keep in mind this famous quote from Martin Niemoller about Nazis that is often used to describe a slippery slope:
First they came for the Socialists, and I did not speak out—
Because I was not a Socialist.Then they came for the Trade Unionists, and I did not speak out—
Because I was not a Trade Unionist.Then they came for the Jews, and I did not speak out—
Because I was not a Jew.Then they came for me—and there was no one left to speak for me.
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A little dramatic? Sure. And perhaps just the usual application of Godwin's law any argument eventually arrives at. But the fact remains that if it passes, this will be the first time a single profession has been, well, singled out for a tax. This is the equivalent of taxing construction companies to do highway work or taxing attorneys to improve the courts. These senators seem to think that since we'll be getting a “windfall” (never mind that we're exactly the same people paying the PPACA taxes that fund 90% of this already) we should be the ones who pay the last 10%. There does not seem to be a recognition that this isn't a windfall, since we're actually doing work to get this money. We just happen to be currently doing it for free either due to an unfunded federal mandate (EMTALA) or out of the goodness of our hearts.
Don't think for a second that your state legislature isn't going to look at what happened in Utah when it starts looking for a way to pay for the Medicaid expansion it has already authorized (at least our legislature is considering the costs a priori where many other states just implemented it without a plan to come up with their 10% starting in 2017.) Physician-specific taxes may soon be coming to a state near you. Utah might be the first, but if it passes here, I can assure you it won't be the last.
What Can You Do?
First, if you are a student or resident considering practicing in Utah when you are finished training, you can help these elected officials see how a physician-specific tax affects your decision to stay or relocate here, further exacerbating our physician shortage, especially in rural primary care.
Second, if you are a physician or other professional already practicing here, know that this proposal could very well be law 30 days from now if you don't act. So either contact your leaders, or start revamping your budget to cover this cost.
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Third, even if the only time you'll ever be in Utah is to see the national parks, realize that this isn't a local issue. If this passes in Utah, it will only be a matter of time before a similar proposal is taken up in your state. Just like forest fires are easiest to put out in the first hour, this is the time to take this idea into the corner and drop an anvil on it.
So please, take the time to shoot a short email to one or all of the “Gang of 6” and let them know what you think about this proposed mechanism of paying for Medicaid expansion and specifically about a physician-specific tax/fee/assessment. Please, keep your emails polite as these truly are well-meaning, good people working long hours for little money on this issue, but they need to get the message that taxing a single profession/industry to pay for a bill that will benefit all of society is a terrible idea.
- Governor Gary Herbert
- Lt. Governor Spencer Cox
- Senate President Wayne Niederhauser (wniederhauser (at) le.utah.gov)
- Speaker of the House Greg Hughes (greghughes (at) le.utah.gov)
- House Majority Leader Jim Dunnigan (jdunnigan (at) le.utah.gov)
- Senator Brian Shiozawa, MD (bshiozawa (at) le.utah.gov)
What do you think? Would a $5,000 physician licensing fee dissuade you from practicing in a state? Do you think a tax on a single profession is fair? Do you feel getting paid to see Medicaid patients is a “windfall?” How would you like to see your state pay for their share of Medicaid expansion? Are you willing to email these elected officials? Why or why not? Comment below!
How would this tax be applied towards residents with permanent licenses and the training programs that pay for them?
Lawyers benefit from new laws, how about a tax on them?
Although it’s unethical for doctors to strike, what if a large group of you all threatened to not renew your licenses? Take a break from practicing. That would send a message and make a great media story.
Getting Atlas to shrug is easier said than done.
More likely they will simply start looking for jobs in other states. Part of the problem is that as s general rule physicians lose money on Medicaid patients; so there will be no winfall for the docs.
Back in the 70s there was talk about malpractice insurance going up dramatically in California. At that time the doctors did not have much that they could do to dissuade the sudden increase. So, the decision was made to “take vacation.” The vacations just happened to coincide with all the other physicians being on vacation. Only a few were left to see the emergencies and the sudden decrease in physicians scared everyone. The laws changed within a couple of days.
I think that it is disgusting that the public image of doctors is that we are still rich. It’s as if a couple of thousand dollars here or a couple of thousand dollars there doesn’t matter to us. Student loans and the number of years of training starts us out way behind our friends in other industries (which has been discussed on the site before). Our reimbursements have never gone up, they only go down. Overhead costs only go up, they certainly don’t go down. It’s already hard enough to survive if you’re in a small private practice. Throw in EMR, meaningless use and ICD-10 and many older physicians are already retiring. A law like this would likely push everyone close to retirement into retirement. There is just no reason to have to pay that much money to be able to work.
Also, with reimbursement rates from Medicaid, no one is really getting “rich” off of the ACA. The whole idea that it creates more patients to be seen and thus more opportunities to make money is a joke. There are only so many minutes in the day and in my specialty most exams are a solid 15-30 minutes, so you can only see so many people in a day – regardless of how many have insurance. Obamacare in general has also cut reimbursements 30%. These changes are already why so many physicians are leaving self-employment and retiring or joining into hospital groups/choosing to become an employed physician.
It is truly sad to see how we are valued and you have to make sure that the joy you get from practicing medicine is still the interactions with your patients. It is the ability to help heal them and improve their lives. That will always remain priceless.
There are still people in california still trying to profit off doctors. Prop 46 was defeated last year, but was heavily pushed by injury lawyers trying to raise malpractice lawsuit caps. Its never ending.
Emails sent to the entire Gang of 6, from this Iowan family
I’m not sure this is the first of its kind. Sounds much like NICA in FL where all physicians must pay $250/biannually for statutory created birth injury funding. Regardless if your practice involves OB or not. “Participating” doctors pay $5k and hospitals pay too. The logic is that it reduces malpractice cost for all, so all should contribute. Sounds similar to what you describe for Utah, a tax on doctors for patient benefit.
Virginia has a similar birth injury fund also funded by doctors that I had to pay into when I was out there. I agree it is similar. While I think birth injury funds are the cat’s meow, I think it should also be funded by ALL taxpayers, not just doctors.
To be clear, I’m not opposed to Medicaid expansion. What I’m opposed to is taxing a single profession for a general benefit. This isn’t some huge windfall for doctors, most of whom have quite full practices. It is a benefit, a safety net, for all of society and so should be paid for by all of society. In fact, if any doctor is going to make his $5K back in increased Medicaid payments, it’s me, not the plastics guy doing elective only or the ENT guy with a practice full of privately insured patients or the geriatrician taking 80% Medicare patients. But the principle of taxing some tiny segment of society I find repulsive, even beyond the fact that that segment includes me.
I dont find the singling out of the profession so appalling, as its always been politically a great move, everyone thinks drs are rich and arent paying their fair share. Whats truly appalling is they are doing this to make up for their mistakes made prior by having some wild math/economics challenged partisan position. Anyone who looked at it by the numbers knew those states were being very dumb.
Truly, it should come out of the legislatures and all elected public officials with the capacity to vote on such issues pocket, since it is an issue they created entirely. Time for them to take responsibility and deal with the consequences. Otoh, it would be great to be in a profession where an accepted way of dealing with mistakes is to make another group pay for it, sounds so untrue.
The median debt of residents is somewhere around $200K, with 1/3 of residents with debt >$250K. I imagine that the debt of residents at the University of Utah is similar. I wonder if the University of Utah Housestaff Association is aware of this legislation. Residents are highly likely to stay in the area they trained in. If the state learns that these actions will impact the recruitment and retention of young physicians, it hopefully would make a difference. Emails sent to the “Gang of 6”.
[Comment to WCI: the “first heard about it” and “letter to the editor” links both seem to point to your letter to the editor.]
Sent x 6:
I am a practicing physician in Colorado. I have heard that Utah is considering a physician-specific fee to pay for Medicare/Medicaid expansion. This is both unethical and may well be illegal. I strongly encourage you to reconsider your support for such a provision.
Expansion of healthcare benefits produces dividends for all of society. It is entirely unreasonable that the burden for this expansion should be placed solely on physicians. It would create a dangerous precedent indeed.
Sincerely,
[my full name], MD, practicing radiologist in Denver, CO
I now realize, after sending this, that Medicare didn’t belong in the text! Oh well. No one shall read it that closely anyway.
Toshi, I hope you don’t mind me using your template to email the Gang of 6. I am a first-year at the University of Utah SOM. Thanks for posting it.
Thanks, fixed the link. And yes, it’s only Medicaid expansion, not Medicare.
I emailed the “Gang of 6” to let them know that this primary care physician who is actively looking for a position would not consider Utah if this is passed.
Agreed. You are completely right, this is 100% B.S.
I do, however, find it interesting that you pick this wrong to break your political silence and evoke images of Nazism. Is this really the one that makes your blood boil? It just seems that this one is minor in comparison to some of the heavyweight ills the bureaucrats have implemented.
Let’s face it, you have a big platform with a megaphone that could rally doctors. Don’t you think there are bigger fish to fry?
EMTALA – unfunded mandates forcing the average emergency physician to provide $138,300 in “EMTALA related charity care” each year. ACEP calls it “EMTALA related charity care” but it feels more like indentured servitude (Godwin’s law contemplated but averted).
http://www.acep.org/News-Media-top-banner/EMTALA/
HIT (health information technology) mandates – legislation passed without umbrella protections for older doctors looking to retire in the near future. Instead these docs have to plop down a huge capital outlay or face payment penalties. Not exactly a good investment to spend tens of thousands of dollars on a system along with maintenance costs when you only plan on working another few years.
RAC Audits
Documentation requirements so onerous that a brand new profession (Scribes) sprung up just to assist doctors in meeting these requirements
Regulations so thick and so costly that solo practice physicians are becoming extinct…and of those who still remain, they typically have to employ more back office staff to keep them in compliance than front office staff to actually take care of patients
I could go on and on.
I understand why you avoid politics because you risk offending some of your readership no matter what side you take. But the government now owns medicine. And whether it is PQRS, ICD-10, patient satisfaction surveys or a myriad of other regulations and mandates, we physicians have to comply. We had better figure out a way to get our voices heard before we have fallen too far down this rabbit hole. If we don’t, then waiting for us at the other side is the ultimate mandate…..tying our medical licenses to a requirement that we accept Medicaid / Medicare.
If that happens, then it is all over. So while your request seems small potatoes to me, I’m happy to do my part and help my colleagues in Utah. The emails will be out shortly.
It’s called picking your battles. As I mentioned, one of the gang of 6 is my partner and another lives around the corner. The governor’s chief of staff lives down the street. This particular issue feels VERY personal to me. I guess EMTALA and PPACA repeal feel too big to me, not to mention I have mixed feelings about them. No mixed feelings on this issue. Plus, this one fits directly into the mission of this blog- improving physician finances as it is a direct tax on physicians.
The Utah Medical Association is now opposing the plan (which they had generally supported with caveats) due to this tax:
http://www.sltrib.com/home/2940452-155/story.html
I also noticed my letter and the editorial that triggered it are now trending on the Salt Lake Tribune site, despite the fact they were both written two months ago.
It was incredibly depressing to read the comments under your Letter to the Editor. Our citizens are devastatingly misinformed and for God knows what reason, incredibly resentful towards physicians. I some times wonder why people continue to get into medicine. The combination of exponentially increasing student loan debt, decreasing pay with a general public that seems to think we all drive Maclarens and live in LA McMansions does not equate to job satisfaction. So depressing.
McLaren. See, I don’t drive one. Can’t even spell it.
Ha, thats funny. I wrote it the other day and had to google it to make sure I spelled it correctly as well.
I’m an MS1 at the University of Utah, class of 2019–the class that the Utah legislature approved funding to make the biggest in the history of our state. (We went from 80 to 122.)–which was done with the goal of creating more primary care physicians for our communities. Everyone knows PCPs are the lowest paid (and not greatly paid) physicians… So now that they’ve paid to get more of us in school, they want to tax us later to make sure we don’t become the PCPs they had hoped us to become???
Exactly. This is shortsighted and will harm everybody in the long run.
As a general surgery resident who was raised in Utah, this information is alarming. I wasn’t sure I wanted to practice in Utah because I’d heard the pay wasn’t as competitive as other places. But if this passes, I certainly won’t be going home to practice. I’m not sure if I will contact the legislatures until I find more corroborating evidence, But rest assured, if this is true, I will contact those involved.
That said- I am appalled by the insinuation of this post that the ACA is somehow a good idea, or that we as physicians should accept the ACA, and it’s funding, as if it was some unstoppable train outside of our control. We wouldn’t be in this precarious position if we had not sold our souls to the AMA and allowed the ACA to pass in the first place! We swallowed 5,000+ pages of bureaucratic trash in the name of an unrealized noble ideal, and a mere half dozen good measures contained in the ACA. Good measures, I might add, that could have been implemented without castrating individual freedom or binding our hands, physician’s hands, with even more red tape.
The ACA is a cancer, and we’re all busy discussing what is the best band-aid to put on it. If we want to solve this problem- Go to the source- replace the ACA! Vote for someone like Dr. Ben Carson, someone who has an intimate knowledge of how medicine should work. Veto the ACA, and put a sensible law in place that actually helps fix healthcare instead of fixing insurance. One that is focused on benefiting all patients and physicians, instead of politicians and insurance.
Couldn’t agree more! I’m a BYU alum now in medical school in Arizona. My tuition is over $60,000 per year and I’ll probably have over $300k in debt when I finish. A couple of grand here and a couple of grand there are a huge deal to me!
Like you said, the focus needs to be on health care, not insurance. You might like Steven Brill’s book, “America’s Bitter Pill,” about the formation of the ACA and the bureaucrats who worked with the White House to get what they wanted.
I’ll look into that
We are generally “taxed” already due to “write offs” we are required to take on each patient. An attorney would not take you as a client if they knew they would only be paid a percentage determined by the government or insurance agency. A car dealer would not sell you a car if the government told them they could only charge a certain amount for it, even if it cost of the car to the dealer is more than they pay for the car in the first place. But that is what they do to healthcare providers.
There are more rich, non-educated people in the untied states than there are physicians, or other healthcare professionals that spend years in school and training and have hundreds of thousands of dollars in debt to receive that education.
It’s disappointing that his news is coming out because Utah has a major physician shortage. If a fee like this were to pass, that shortage would just get worse! This would certainly encourage me to not return to Utah as a physician after my military commitment expires.
I don’t think I could honestly afford that kind of fee to practice medicine. Not as a family doc. Licensing fees in Texas use to be rediculous. About $1300 for your first two years and then $850 every 2 years after that. (Plus the DEA $750 every 3 years). Thankfully it just went down a bunch. I just renewed for $465 for 2 years. Initial one is still very expensive though.
Jim: This the major reason to be a part of organized medicine. Is your state medical association following this? Also, we have found that absolutely nobody cares about the “rich doctors.” Any discussion about taxing/penalizing doctors needs to be discussed in terms of the effect on patients. Here is what I sent:
“I heard of a plan in the works to help pay for Medicaid by assessing new fees on doctors.
In the emergency department, we care for every single patient who comes in the doors, no matter their medical problem and without regard to their ability to pay/insurance. This is the safety net of American healthcare. We rely on a team of many physicians and surgeons to make this happen. Exorbitant fees on doctors will undoubtedly chill any doctors considering locating to Utah and possibly push out those already there–critically jeopardizing that safety net. We experienced this in Nevada when the trauma center in Las Vegas closed.
As a tourist to Utah, I worry about the availability of emergency medical services. As a physician, I am genuinely worried about the people of Utah. As a Nevadan, I look forward to welcoming the physicians and surgeons who would like to practice in a place that does not punish them for being a doctor.”
Our skiing is better here anyhow, contrary to the Utah Tourism Propaganda Machine.
Excellent points. Thanks for your letter.
Excellent letter and points EXCEPT the one about the skiing being better in Nevada. 😉
“As a physician and fractional property owner in Utah, I am very concerned that the State of Utah would impose a surcharge on physicians to help pay for the proposed Medicaid expansion. It does not seem right that the public good should be born exclusively or disproportionately by a segment of the population that already cares for the poor, for free or for below cost. Please reconsider this draconian measure.”
Letters sent.
This will also no doubt hurt the University of Utah residency programs. I know when I was applying for residency and fellowship spots, at the very top of my list in choosing a program was whether I would be able to moonlight. If you’re going to nail me with a $5,000 tax while I’m making maybe $50k per year, I’m not moonlighting because frankly, I can’t afford a state license. It’s burdensome enough to pay my Step III, DEA, malpractice insurance and more modest state license fee. And if I can’t moonlight, I’m not accepting a spot in your residency program. Period. I say that as a resident who had 2 kids going into residency and 4 by the time I finished. I needed to hustle, and this would have been an insurmountable hurdle towards doing that.
I agree with the Residency issue. I’m not sure if the U, or other programs pay for their resident’s Licensing fees. But if this passes, I’m sure they will no longer cover those fees, which gives potential residents one less reason to train in Utah.
“that’s kind of stupid not to get your own money back.”
Unless one does not accept the moral hazard that a state is relying on a federal government that is $18.5 trillion dollars in debt and has unfunded liabilities of over $100-trillion dollars. Exactly how is the federal government in a position to pay for this expansion? It isn’t. Does the state then expand the program willy-nilly and allow a federal government on its way to insolvency to further speed towards the precipice?
Like how I picked that up from “The Moral Hazard of Loan Forgiveness Programs?”
This makes no sense. Its simply shifting the costs, as we’re already paying for this care. Theres no magic money out there. Healthcare costs occur whether or not you have a plan for paying for them. Making a plan or centralizing it doesnt change this fact. Now, Im not saying the ACA is the bees knees, just that denial of reality isnt a strategy either.
How much do you think Realtors pay per year for licensing? How about hairdressers? Now a bunch of rich guys are going to whine about paying a few grand per year to practice medicine? Who are you to quedtion the Gov of the best run State in the US? Pay up and kiss his wring and be glad he doesn’t charge you more!
Licensing fees are not our only nor biggest (or smallest) costs that are REQUIRED just to be able to practice at all. That isnt even the issue. The issue is that theyre using a politically favorable target (as you demonstrate) to make up for their own failures.
The costs to become and practice medicine are not small, and while the income is good, especially if you conveniently forget to consider all the real costs, there are huge opportunity costs.
Would you switch net worths with me based only on the knowledge I am a rich doctor and you are not? Interesting question…I know what I would do.
Hairdressers pay $87 every two years. Realtors pay $100.
Have your ever done the math on how much it costs to train in the medical field? There are minimal financial breaks for health professionals when they go through their training. I wouldn’t call all doctors “rich guys” because many of them are general practioners who make much less than the realtors you suggest.
I’m a regular blog reader and I agree with your premise that a doctor tax is wrongheaded, but I strongly disapprove of your Niemoller reference, Godwin’s law notwithstanding.
A better analogy would be that we don’t have a special tax on teachers because they benefit from government education spending or a special tax on veterans because they benefit from veterans administration spending. Health care for all is a universal benefit so it should paid for like we pay for anything else, through progressive taxation or spending cuts.
The Niemoller quote makes you sound like a right wing ideologue, when you compare a dumb tax with the Holocaust. I know this was not your intention.
Just demonstrating the slippery slope issue-i.e. the idea that taxing docs in Utah could lead to taxing docs elsewhere or taxing other professions directly.
Obviously a $5K tax is a far cry from being round up and sent to a death camp.
I just got a survey from the UMA discussing the same thing, so anyone above doubting the veracity of this information, it’s legit. I filled out the survey, but I’m going to email everyone as well. Thanks for providing the addresses.I don’t know about other specialties, but we already have a shortage of psychiatrists in Utah. My patients wait 3 months to get in with me, and that’s pretty good compared to other areas of the state, where the wait is more like 9-12 months. I have people that drive all the way from southern Utah, Nevada, Idaho, and Wyoming because of poor access to care. I can’t imagine what will happen if this passes and recruiting gets more difficult.
I think you’re mistaken in thinking that these fine legislators’ priority is increasing the size of the pie and dividing it fairly, as you so charitably imply. Their primary consideration in not participating in Medicaid expansion is to try to prevent the ACA in achieving any measure of success. Given that there is increasing pressure to give healthcare providers in their state a piece of the big pile of federal money they left sitting on the table, but given that they want the ACA to be a failure more than anything else, they are proposing a plan that will drive doctors out of Utah and then will blame the ACA for that outcome. Gotta American politicians’ current love affair with cutting off their noses to spite their faces. It’s why Evan Bayh and Olympia Snowe retired from the Senate.
Many of my partners, upon retiring, have kept their licenses and given free medical care at charity clinics. Even with the expanded ACA coverage, charitable care will still be needed for the homeless and undocumented.
As a near-retiree I can emphatically say: I wouldn’t pay $5000 annually to be allowed to work for free.