Medical Newswire has an excellent report today summing up the “other shoe” for physicians – the cuts in Medicaid rates that the states are implementing as part of budget cuts (the headline has a typo, referring to “Medicare”).
The states are being squeezed – rising enrollment in 2008, which will be exaserbated in the 4th quarter of this year and into 2009 as the recession takes full effect. Tax receipts are down as the economy drops, on top of tax cuts already in place. At least four states have already cut rates, and more will probably will cut Medicaid fees for 2009, if not sooner.
To reiterate my advice: hold the line on practice expenses. Hold your own draw, and hold a lid on your personal spending as well. Postpone any big planned vacations, new cars, etc – your staff and patients will often be in tight circumstances, so appearances are important. In addition, this is one year to be conservative until we get through the recession – it could be a long time, and you may feel hits in various ways from all payers, whether government, insurance or patients.
Enjoy the weekend.