[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]



 
  HEALTHCARE REALIGNMENT AND REGULATION: THE DEMISE OF SMALL AND SOLO 
                               PRACTICES?

=======================================================================

                                HEARING

                               before the

       SUBCOMMITTEE ON INVESTIGATIONS, OVERSIGHT, AND REGULATION

                      COMMITTEE ON SMALL BUSINESS
                             UNITED STATES
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                              HEARING HELD
                             JULY 19, 2012

                               __________


                               [GRAPHIC] [TIFF OMITTED] TONGRESS.#13
                               

            Small Business Committee Document Number 112-080
              Available via the GPO Website: www.fdsys.gov



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                   HOUSE COMMITTEE ON SMALL BUSINESS

                     SAM GRAVES, Missouri, Chairman
                       ROSCOE BARTLETT, Maryland
                           STEVE CHABOT, Ohio
                            STEVE KING, Iowa
                         MIKE COFFMAN, Colorado
                     MICK MULVANEY, South Carolina
                         SCOTT TIPTON, Colorado
                         JEFF LANDRY, Louisiana
                   JAIME HERRERA BEUTLER, Washington
                          ALLEN WEST, Florida
                     RENEE ELLMERS, North Carolina
                          JOE WALSH, Illinois
                       LOU BARLETTA, Pennsylvania
                        RICHARD HANNA, New York
                       ROBERT SCHILLING, Illinois
               NYDIA VELAZQUEZ, New York, Ranking Member
                         KURT SCHRADER, Oregon
                        MARK CRITZ, Pennsylvania
                      JASON ALTMIRE, Pennsylvania
                        YVETTE CLARKE, New York
                          JUDY CHU, California
                     DAVID CICILLINE, Rhode Island
                       CEDRIC RICHMOND, Louisiana
                        JANICE HAHN, California
                         GARY PETERS, Michigan
                          BILL OWENS, New York
                      BILL KEATING, Massachusetts

                      Lori Salley, Staff Director
                    Paul Sass, Deputy Staff Director
                      Barry Pineles, Chief Counsel
                  Michael Day, Minority Staff Director


                            C O N T E N T S

                              ----------                              

                           OPENING STATEMENTS

                                                                   Page
Hon. Mike Coffman................................................     1
Hon. Kurt Schrader...............................................     2

                               WITNESSES

Mark Smith, President, Merritt Hawkins, Irving, TX...............     2
Louis F. McIntyre, M.D., Westchester Orthopedic Associates, White 
  Plains Hospital Physicians, White Plains, NY...................     4
Joseph M. Yasso, Jr, D.O., Heritage Physicians Group, 
  Independence, MO...............................................     6
Jerry D. Kennett, M.D., F.A.C.C., Senior Partner, Missouri 
  Cardiovascular Specialists, Vice President and Chief Medical 
  Officer, Boone Hospital Center, Columbia MO....................     8

                                APPENDIX

Prepared Statements:
    Mark Smith, President, Merritt Hawkins, Irving, TX...........    29
    Louis F. McIntyre, M.D., Westchester Orthopedic Associates, 
      White Plains Hospital Physicians, White Plains, NY.........    35
    Joseph M. Yasso, Jr, D.O., Heritage Physicians Group, 
      Independence, MO...........................................    39
    Jerry D. Kennett, M.D., F.A.C.C., Senior Partner, Missouri 
      Cardiovascular Specialists, Vice President and Chief 
      Medical Officer, Boone Hospital Center, Columbia, MO.......    44

Additional Materials for the Record:
    ``So Long, Marcus Welby: Obamacare, Market Kill the Solo 
      Private Practice,'' by Bruce Japsen, Forbes................    51
    ``Henninger: Obamacare's Lost Tribe: Doctors,'' by Daniel 
      Henninger, The Wall Street Journal.........................    55
    ``More Doctors Giving Up Private Practices,'' by Gardiner 
      Harris, The New York Times.................................    58
    ``Is Private ObGyn Practice on its Way Out?'' by Lucia 
      DiVenere with OBG Management Senior Editor Janelle Yates, 
      OBG Management.............................................    64
    ``Demise of the Solo Doctor,'' by Parija Kavilanz, CNN Money.    72
    ``A Small Business Plan All Can Agree On,'' Chairman Sam 
      Graves, POLITICO...........................................    75


 HEALTH CARE REALIGNMENT AND REGULATION: THE DEMISE OF SMALL AND SOLO 
                           MEDICAL PRACTICES?

                              ----------                              


                        THURSDAY, JULY 19, 2012

               House of Representatives    
               Committee on Small Business,
                    Subcommittee on Investigations,
                                  Oversight and Regulations
                                                   Washington, D.C.
    The Subcommittee met, pursuant to call, at 10:00 a.m., in 
Room 2360, Rayburn House Office Building. Hon. Mike Coffman 
(chairman of the subcommittee) presiding.
    Present: Representatives Coffman, Tipton, Schrader, and 
Hahn.
    Chairman Coffman. Good morning. The meeting is called to 
order. I want to thank our witness list for being here today. 
We look forward to your testimony.
    Today, we meet to examine the changing landscape of small 
and sole position practices. For many years, newly-licensed 
physicians typically joined a private practice or open one of 
their own. According to Merritt Hawkins, a national physicians' 
recruiting firm, whose president is testifying today, only 1 
percent of its searches in 2011 were for independent practices, 
the lowest in the firm's 28-year history and down from 22 
percent in 2004. Many people believe that small and solo 
practices in order to survive, they will look very different 
than the medical practices in past years. These shifts appear 
to be rooted in the increasing economic pressures, younger 
physicians, they want freedom from the long hours and 
administrative burdens of owning a private practice and they 
need financial help with student loans, medical liability 
insurance, and health information technology. Established 
physicians have cited declining reimbursements and increasing 
regulations such as the reporting requirements for health 
information technology and the push towards accountable care 
organizations as reasons small and solo practices have become 
economically unsustainable.
    In a recent Wall Street Journal op-ed, Daniel Henninger 
described practicing medicine as a health care law's biggest 
loser. We are interested in learning how all of these factors, 
including the requirement of the health care law which was 
upheld by the United States Supreme Court may affect small 
practices.
    We have an exceptional panel of witnesses to help us 
understand these issues. Welcome, we look forward to your 
testimony.
    Dr. Schrader, do you have any opening----
    Mr. Schrader. I will just submit mine for the record, Mr. 
Chairman. Thank you.
    Chairman Coffman. Thank you.
    The subcommittee members have an opening statement prepared 
and that is within the Senate for the record. I would like to 
take a moment to explain the timing lights to you.
    You will each have five minutes to deliver your testimony. 
The light will start off as green. When you have one minute 
remaining, the light will turn yellow. And, finally, it will 
turn red at the end of your five minutes. I ask that you try to 
adhere to the time limit.
    Our first witness today is Mark Smith, president of Merritt 
Hawkins in Irving, Texas, a leading physicians' recruiting firm 
for small, independent practices, group practices, and 
hospitals. Mr. Smith has over 21 years of experience with 
Merritt Hawkins and is an expert in medical staff planning and 
physician staffing. He is a graduate of Oregon State 
University. Welcome. You have five minutes to present your 
testimony.

STATEMENTS OF MARK SMITH, PRESIDENT, MERRITT HAWKINS; LOUIS F. 
McINTYRE, M.D., WESTCHESTER ORTHOPEDIC ASSOCIATES, WHITE PLAINS 
   HOSPITAL PHYSICIANS; JOSEPH M. YASSO, JR, D.O., HERITAGE 
  PHYSICIANS GROUP; JERRY D. KENNETT, M.D., F.A.C.C., SENIOR 
 PARTNER, MISSOURI CARDIOVASCULAR SPECIALISTS, VICE PRESIDENT 
        AND CHIEF MEDICAL OFFICER, BOONE HOSPITAL CENTER

                    STATEMENT OF MARK SMITH

    Mr. Smith. Thank you. Mr. Chairman and distinguished 
subcommittee members, good morning. My name is Mark Smith and I 
am president of Merritt Hawkins Associates, the largest 
physician search consulting firm in the nation and a member of 
the AMN Health Care.
    In the course of my 22 years at Merritt Hawkins, I 
consulted with thousands of physician practices and my company 
has produced numerous white papers, surveys and books 
concerning physician practice pattern related topics.
    I appreciate the opportunity today to address the 
subcommittee on the decline of solo and small physician 
practices.
    For those who remember the ``Marcus Welby, M.D.'' nightly 
TV show, we still have an image in the mind of a physician as a 
small business owner running their own practice. This classic 
model of an independent physician practice still exists today, 
but is rapidly becoming a relic of a bygone era.
    Today, physicians are more likely to be employees than they 
are to be medical practice owners. This is particularly true of 
medical residents completing their training. In the 2011 survey 
of final-year medical residents by Merritt Hawkins, only 1 
percent chose to be a solo private practice physician. By 
contrast, 60 percent said they would prefer to be either a 
hospital employee or work for another entity. In short, 
virtually no one wants to be a Marcus Welby anymore. This 
represents a fundamental transformation and structure of 
physician practices away from the classic private practice 
model and towards employment and an increasing number of other 
practice options.
    The five primary reasons for this transformation taking 
place: flat or decline in reimbursement, growing regulatory and 
administrative burden, malpractice costs, information 
technology implementation, and the effects of health reform, 
both the legislative and evolutionary.
    First reimbursement. For today's Marcus Welby, both 
Medicare and private insurers typically pay physicians for 
usual and customary charges. Physicians generally were paid for 
services invoiced in an amount above the cost of doing 
business. This system has been repeatedly modified in an effort 
to reduce cost and to manage care. Physician reimbursement in 
some cases has been cut or has not yet faced with inflation.
    As a result today, physicians see little connection between 
their costs and the amount to which they are reimbursed. This 
is a difficult business model to sustain. Some small private 
practices are having trouble keeping their doors open. There 
have even been reports in recent months of a growing number of 
practices going out of business, something I have not seen in 
my 24 years with this organization.
    By contrast, employment provides physicians safe harbor 
from today's challenges and from the uncertainties that lie 
ahead. Regulatory burdens, virtually all businesses are subject 
to regulatory compliance of some kind. Medical practices are no 
different. As a small business owner, physicians must abide by 
Equal Opportunity and worker safety laws, state and local 
ordinances, and many other rules and regulations. Adding a 
layer of complexity, physicians must work in the most highly of 
all regulated professions, having to comply with HIPAA, stark 
laws, Medicare, and many other regulations. It is concerning to 
me that a survey conducted by Merritt Hawkins stated that 
physicians spend 26 percent of their time doing paperwork. Many 
physicians see employment as a way to escape the rising tide of 
risk and regulation and allow them to focus on patient care.
    Malpractice. Among the greatest cost of doing business, 
small business owners must pay for their own malpractice 
insurance, the cost of which could be debilitating.
    For example, the annual premium for malpractice in some 
parts of Florida for an obstetrician can exceed $160,000 a 
year. As malpractice rates remain high, the former becomes an 
attractive option to physicians, as employers typically pay for 
this benefit.
    For a variety of reasons, physicians are obliged to 
incorporate a growing level of information technology into 
their practice, particularly EMR or Electronic Medical Records.
    While the federal government has provided reimbursement 
funds for physicians to implement EMR, many still find it 
difficult due to a lack of time and available expertise. EMR 
implementation is the key example of resources, expertise, and 
time a small medical practice are being taxed in today's 
increasingly complex medical environment. A growing number of 
physicians are embracing employment again as potential refuge 
from these challenging concerns.
    Health reform is a driver of a number of health care 
trends, including the decline of small, private 
practices.Health reform encourages the consolidation of physicians into 
larger entities to be economies of scale.
    In addition, health reform promotes the formation of new 
delivery models such as Accountable Care Organizations or ACOs 
which depend upon hospital and physician alignment in the use 
of advanced information technology. ACOs are also risk-bearing 
entities and as such require a high level of administrative and 
business expertise and it is difficult for a solo and all 
practice physicians to participate in these models, which 
naturally lend themselves hospital employment for physicians.
    Combined, these factors with others have created conditions 
in which small, private practice is increasingly untenable. 
This model is only likely to survive in small, rural areas, 
where there are few physicians and even in these segments, 
physicians will need to affiliate with larger entities. 
Otherwise, physicians are likely to be employed by multi-
physician groups like hospitals and the era of Marcus Welby 
will rapidly disappear into our rearview mirror.
    Thank you for the opportunity to address the subcommittee 
for examining the challenges facing America's solo and small 
practice physician.
    Chairman Coffman. Thank you for your testimony.
    At this time, our next witness is Louis F. McIntyre, a 
medical doctor, a board-certified orthopedic surgeon practicing 
in White Plains, New York. Dr. McIntyre and his partners had 
operated a small practice since 1994, but in the fall of 2011, 
they sold their partnership to a hospital group and joined the 
hospital's employees. He earned his medical degree from the New 
York Medical College at Valhalla. How do you say it?
    Mr. McIntyre. Valhalla.
    Chairman Coffman. Valhalla.
    Mr. McIntyre. Land of the gods.
    Chairman Coffman. Okay. Dr. McIntyre is a member of the 
American Association of Orthopedic Surgeons and is testifying 
today on their behalf.
    Welcome. You have five minutes to present your testimony.

                 STATEMENT OF LOUIS F. McINTYRE

    Mr. McIntyre. Thank you, Mr. Chairman and members of the 
committee to allow me to testify today and tell my little small 
practice story.
    I joined Westchester Orthopedics in 1994. The practice 
resided in a small office and we had a few employees and we 
wanted to grow the practice and improve the quality of care 
that we delivered. So, in 1995, we moved to a much larger 
office space, hired more physicians, free parking. Patients 
love free parking, and added more docs.
    The late 1990s brought two challenging trends: decreasing 
reimbursement and increasing business cost. We needed more 
employees to handle the clerical demands and by managed care 
and yearly malpractice premiums went from $40,000 to $110,000 
per doctor from 1994 to 2011. As a small practice, we were 
unable to negotiate favorable rates because we did not have 
market share. We formed a network of orthopedic surgeons to try 
to change that, but we were unable to affect rates because of 
anti-trust concerns.
    To remain viable, we added more doctors in ancillary 
services and implemented an electronic medical record. Our 
total cost for the EMR implementation was about $500,000, which 
represents about $100,000 per doctor. Initially, we saved some 
money with EMR, but over time, that was negated by the need to 
upgrade the system and hire data entry personnel. We built an 
ambulatory surgery center and acquired additional office space 
to build a physical therapy center to standardize the quality 
of the physical therapy that our patients received.
    When completely configured, we had just under 50 employees. 
All had health insurance, all had a generous profit-sharing 
plan, all had paid vacation and leave and sick leave. Patients 
appreciated the convenience of being able to receive all their 
musculoskeletal care in one coordinated and contiguous setting.
    The negative pressure on reimbursement, however, continued. 
The American Academy of Orthopedic Surgeons estimates that 
orthopedic surgeons with Medicare reimbursement revenue 
decreased 28 percent in the last decade alone. Reimbursement 
from private payers has also fallen and practice costs, 
unfortunately, continue to rise.
    Laws recently passed by Congress have further stressed 
private practice. The American Recovery and Reinvestment Act 
mandated the adoption of EMR for all physicians serving 
Medicare patients. Even though we had previously implemented an 
EMR, the meaningful use criteria accompanying the regulations 
still represented a significant cost burden for us in terms of 
data collection and quality reporting rules.
    The Patient Protection and Affordable Care Act proposes 
new, complex risk-sharing methodologies that many small 
practices, if not most, will not be able to comply with. The 
combination of decreased reimbursement, increased reporting 
requirements, huge outlays for technological improvements, and 
uncertainty about future potential earnings are driving 
physicians to seek employed positions. Doctors know that they 
cannot meet all the demands placed upon them now and see 
patients at the same time. According to the AAOS, the 
employment of orthopedic surgeons by hospitals has increased 
300 percent in the last 5 years.
    Last year, we decided to become hospital employees. This 
year, the other orthopedic group in our town also is going to 
become employees of the same hospital. The multi-specialty 
group next use, WESTMED, has 225 employee positions. Clearly, 
the employee model is winning in Westchester County.
    There are advantages for employee positions. Doctors have 
more financial security with a salary, they do not have to 
worry about losing money taking care of uninsured patients, 
they are free from dealing with some of the troublesome human 
resources and IT issues, but employment, however, significantly 
decreases physicians' autonomy and infecting the care 
environment. Physicians are in a unique position to interact 
with patients on a daily basis and identify deficiencies in 
care. Physicians' ability to advocate for patients is 
diminished by employment because they no longer manage the care 
environment.
    As more physicians seek employee positions, there will be a 
generation of physicians who will never experience private 
practice and the business of taking care of medicine. They will 
be unaware of the costs and management issues of providing 
care.
    There is concern that an employed position will see less of 
a need to join medical specialty societies that have added 
great value to patient care. How these concerns will affect the 
profession is unknown at this time.
    In the future, I fear that physicians may unionize to 
protect their economic interest. I believe this would herald 
the end of medicine as a profession and the start of medicine 
as trade associations.
    It is rarely mentioned, but private practice employs people 
and pays taxes. A recent study conducted by the Medical Society 
for the State of New York showed that the private practice of 
medicine was the fifth largest employer in Westchester County, 
second in business establishments, third in personal income 
taxes paid, and seventh in corporate sales taxes paid.
    As a hospital employee, our practice is now tax-exempt. The 
loss of employment and tax revenue resulting from private 
practice physicians migrating to hospital employment may be 
significant and worthy of further study.
    Finally, there will not be employed positions for all the 
doctors in Westchester County or the United States. There is 
and will continue to be an increased need for physicians, 
especially with the implementation of PPACA in 2014. If private 
practice disappears, patient access to care, local employment, 
and tax revenue will suffer. We need to strengthen private 
practice as well as other models of health care delivery to 
ensure patient access to quality of care. Thank you for the 
opportunity to share these thoughts.
    Chairman Coffman. Thank you, Dr. McIntyre.
    Our next witness is Joseph Yasso, junior doctor of----
    Mr. Yasso. Osteopathic medicine.
    Chairman Coffman. Osteopathic medicine, I am sorry. A 
board-certified family physician, medical physician, and 
medical director of the Heritage Physicians Group in 
Independence, Missouri. He is a member of the American 
Osteopathic Association and is testifying today on their 
behalf.
    Welcome. You have five minutes to present your testimony.

                   STATEMENT OF JOSEPH YASSO

    Mr. Yasso. Thank you. Chairman Coffman, Ranking Member 
Schrader, and members of the subcommittee, on behalf of the 
American Osteopathic Association, thank you for the opportunity 
to testify today.
    As a board-certified osteopathic family physician, I 
proudly treated patients for over 30 years. My current practice 
is comprised of three physicians, including myself and a family 
nurse practitioner. We are owned by the Hospital Corporation of 
America.
    Today, I am pleased to share with you my personal 
experience of how impactful health care realignment and 
regulations are upon decisions made by new and established 
physicians alike.
    After leaving the Army in 1980, I entered a small practice 
with two other physicians that we ultimately chose to sell in 
1992, due to multiple financial and regulatory concerns similar 
to those my colleagues in practice are facing today. Today, 
physician practices face new demands as required by statute and 
regulation. These include the adoption of electronic health 
records and electronic prescribing systems, preparation for 
coding under ICD-10, implementation of quality measures, and 
adjusting to other changes in the health care delivery system. 
These additional policies and procedures are important and are 
primarily beneficial to efficiency as well as to providing 
improved patient care. However, each new requirement can be 
quite costly to the physician practice operating as a small 
business.
    The burden on small practices is particularly 
disproportionate, detracting from the time available for 
patient care. In addition, the looming physician payment cuts 
under the SGR for small practices with limited revenues and 
narrow margins to make difficult decisions about whether to lay 
off staff, reduce the Medicare patient population, defer 
investments, opt for early retirement, or sell their practice. 
My first small practice of three buckled to these concerns and 
we opted to sell.
    Today's medical school graduates are faced with difficult 
decisions after completing their education and training. The 
average osteopathic medical school graduate has a debt nearing 
$200,000. As you can imagine, this makes the prospect of 
opening a small practice extremely daunting.
    This spring, the American College of Osteopathic Family 
Physicians conducted a survey of its membership, including 
questions related to practice types and settings. The survey 
found that 60 percent of family physicians are employees with 
no ownership stake in the practice. Often, the overwhelming 
collective burdens I mentioned today are cost prohibitive and 
outweigh a physician's desire to enter or remain in a small or 
solo practice. There are also physicians who wholeheartedly 
embrace the choice of becoming an employee physician. 
Physicians should not be forced to enter an employed situation 
out of pure necessity. They should retain their option to 
choose their ideal practice type absent undue financial 
considerations and regulatory burdens.
    Medical homes and ACOs provide opportunities for physicians 
to continue managing patient care while still being able to 
operate as a small or solo practitioner. Either model requires 
a physician to be employed by a hospital or large health system 
in order to be successful. Appropriately aligned, incentives 
can serve to foster success regardless of practice type. 
Regulators should be cautious in creating additional financial 
burdens on physicians that would inhibit their ability to 
choose a practice setting that is most appropriate.
    In closing, the transformation of the practice of medicine 
has undoubtedly impacted the ability of physicians to thrive in 
a small practice or as solo practitioners. However, physicians 
are adapting to the changing practice of medicine by becoming 
patient-centered medical homes and participating in shared 
savings programs. As we work to improve the health care 
delivery system for patients, physicians must be provided 
appropriate payment and incentive to practice effectively in 
the setting of their choice. Patients deserve this level of 
access.
    I would again like to thank you and the members of the 
committee for affording me the opportunity to share my 
experiences and the AOA's perspective regarding this important 
topic affecting osteopathic physicians and our patients. We 
appreciate the work that you do to promote policies that enable 
physicians to successfully operate as small business absent 
undue regulatory and financial burdens. We look forward to 
working with you in the weeks and months ahead to ensure that 
congressional action fosters rather than impedes the physician-
patient relationship.
    Chairman Coffman. The Chair now yields to Dr. Schrader for 
the introduction of our next guest.
    Mr. Schrader. Thank you, Mr. Chairman. It is my pleasure to 
introduce Dr. Jerry Kennett. Dr. Kennett has practiced 
interventional cardiology in Missouri for the last 30 years as 
a senior partner of Missouri Cardiovascular Specialists and 
vice president and chief medical officer of the Boone Hospital 
Center. He has maintained a busy clinical schedule while also 
participating in a lot of clinical research in education. He is 
testifying today on behalf of American Academy of Cardiology. 
The college has 40,000 members and he has dedicated to 
enhancing people's lives through cardiovascular treatment 
intervention. We welcome Dr. Kennett.

                   STATEMENT OF JERRY KENNETT

    Mr. Kennett. Good morning. Thank you, Member Schrader and 
Chairman Coffman and members of the subcommittee. We appreciate 
your inviting us to testify here today.
    I am Jerry Kennett, chairman of the American College of 
Cardiology Advocacy Steering Committee. The ACC, as said, is a 
40,000-member medical society serving the needs of both 
providers and patients.
    I am a cardiologist with Missouri Cardiovascular 
Specialists, a 17-person cardiology and cardiovascular surgery 
practice in Columbia, Missouri.
    My group was one of those typical office-based practices 
with over 100 employees. Our practice included a cardiac 
diagnostic center, where patients had easy access to 
echocardiograms, stress tests, and even an outpatient cardiac 
categorization laboratory.
    A little more than a year ago, our group was an independent 
practice, but now we are integrated with Boone Hospital Center 
in what is termed a professional service agreement. According 
to the 2011 Lewin Group report on the economic impact of 
office-based physician practices, these small businesses, such 
as ours, account for 4 million jobs across the United States 
with $833 billion in wages and benefits. These small businesses 
generate $63 billion in state and local tax revenue.
    Physician practices are different from almost any other 
small businesses. The payment for services performed is not 
controlled by free market dynamics, but instead payment is 
tightly regulated by Medicare and Medicaid and private payers 
who essentially follow the lead of the government with the 
recipient of the services or patient often paying only a 
fraction of the cost.
    Recent events have had a dramatic effect on private 
practice cardiology. The ACC estimates that 60 to 70 percent of 
our current physician members have now integrated with 
hospitals.
    Why has this happened? There are a variety of factors that 
have contributed to this evolution. The prominent reasons 
relate to Medicare physician payment not keeping up with actual 
practice costs, direct cuts in Medicare physician 
reimbursement, and increased administrative and regulatory 
burdens. All these add up to tremendous uncertainty among 
physicians as to what the future holds and so many physician 
practices such as mine see hospital integration as their only 
choice.
    Every year since 2002, physician practices have been 
threatened with significant cuts in Medicare reimbursement, the 
so-called SGR. This uncertainty stifles physicianpractices from 
making real investments in improving coordination, reducing the current 
fragmentation of care, and reducing waste.
    Another major turning point for cardiology occurred in 2010 
with the Medicare Physician Fee Schedule, which reduced 
payments to cardiology practices or some in-office procedures 
as much as 35 percent. How many small businesses could survive 
a 35 percent cut in payment for the exact same service? Our 
practice, like many others, could not.
    There are also a significant number of regulatory and 
administrative burdens that contribute to the uncertainty for 
physician practices and hinder their ability to grow. A few 
examples are audits. While physician claims for services are 
generally subject to contractor medical review, greater 
scrutiny in recent years has increased costs and uncertainty. 
Physician claims must comply with multiple edits, as well as 
recovery audit contractors.
    ICD-10. The Center for Medicare and Medicaid Services will 
soon implement ICD-10, a diagnostic coding system that will 
increase the number of diagnosis a physician has to choose from 
15,000 to over 87,000.
    Multiple Medicare penalties. Starting in 2011, Medicare 
began to penalize physicians for not meeting the requirements 
of certain incentive programs. In the coming years, physicians 
will be penalized for not prescribing electronically, not 
participating in meaningful use of an electronic medical 
record, and not submitting quality data through the Physician 
Quality Reporting System, as well as a yet-identified value-
based modifier.
    Finally, physicians have significant anxiety regarding the 
future of Medicare payment reform, as you have heard. The new 
payment methodologies, such as ACOs, bundled payments at 
medical homes will require additional staffing with no 
assurance they will produce any shared savings. Physicians are 
afraid of being left out.
    In conclusion, the financial pressures associated with 
declining reimbursements and rising operational costs on 
private cardiology practices have resulted in the rapid 
migration of practices to hospital affiliation. Continued cuts 
in Medicare reimbursement combined with increasing overhead 
costs, increased regulation, unfunded mandates, a micromanaged 
payment system, and an uncertain future are making it difficult 
for practices to remain viable. We believe that a well-
functioning Medicare payment system could provide opportunities 
for physicians to practice both independently or as employees 
of a hospital. Increased payments should come from increased 
quality and demonstrate appropriate utilization and physicians 
should be appropriately paid for the increasing expectations 
associated with the practice of medicine.
    Thank you for the opportunity to share my views and look 
forward to any questions.
    Chairman Coffman. Thank you so much for your testimony. I 
really appreciate all of you taking the time to be here. Let me 
just open it up with a few questions and then I will defer to 
my colleagues on the subcommittee.
    All of you had mentioned rising administrative costs as a 
factor in hurting solo and small practices. Back home in my 
district, I was just talking to a woman who is starting a new 
concept to help child care providers by simply doing their 
administrative work to back office work to allow them to focus 
on child care and her entity then focused on the administrative 
compliance.
    Is there any movement to assist small practices with these 
third party organizations? I know they have existed in say 
Medicaid, Medicare, but just in overall administrative work and 
all the compliance things that you have to do to--are there 
such entities emerging to relieve some of the cost pressures on 
small and solo practices?
    Mr. Smith. There are businesses that have evolved to fill 
that need that exists with physicians, I mean, more of these 
administrative burdens placed on their shoulders and some can 
work quite well. In the new legislation, that intensifies 
greatly the changes, as mentioned, are very significant, but 
even if you are able to outsource that, it comes at a cost and 
it comes at a cost when you are looking at your revenues either 
being flat invests or declining. So, again, it opens up that 
option to make employment seem much more attractive as to 
transferring that burden to someone else.
    We mentioned in the survey that Merritt Hawkins had that 26 
percent of a physician's time was in paperwork. And, so, in 
essence, you have a hidden army of about 200,000 physicians out 
there that are doing something other than they were trained. 
So, anything that we can do to relieve that burden outside of 
just the pure employment option that will allow them to focus 
on patients which I am sure that folks sitting at the table 
would much prefer to do than to do paperwork would be of great 
assistance.
    Chairman Coffman. Dr. McIntyre.
    Mr. McIntyre. My experience in our practice was that there 
were many entities that could help us with individual things. 
Billing. We outsourced billing. IT. We could outsource a lot of 
stuff to IT, but there was not any umbrella organization that 
would come in and say we will do it all for you. It sounds like 
a great business, actually.
    So, the hospital assumes all those tasks for you. I think 
that is what makes it attractive to many physicians who are 
just looking for a way out so that they can concentrate on 
patient care instead of regulatory burdens.
    Mr. Yasso. When we sold our practice in 1992, of course, we 
did not have the IT piece to worry about back I those days, but 
we were doing our own billing and managing the practice 
ourselves and doing quite well.
    When we sold to TriSource, they right away started charging 
us a $7,000 a month management fee and a $7,000 a month billing 
fee. That was $14,000 a month of overhead that we did not have 
before. So, all of a sudden, the practice that was in the black 
was now in the red because we had such a tight margin. And, so, 
if you do those kinds of things, that is the cost that you have 
to bear to get those things done.
    Mr. Kennett. In private practice, there are always 
consultants and companies that want to come in and do things 
for you. They say they can do it more efficient and better and 
usually that does not have to be the case, that usually the 
costs are as great as before.
    As you might imagine in these small businesses, the 
physician practices, they are so regulated and so many things 
we have to deal with that your overhead sometimes in small 
practices can be as much as 80 percent. So, it becomes 
overwhelming and that is one of the reasons that as mentioned 
they tend toward employment.
    Chairman Coffman. Most of you mentioned medical malpractice 
as an issue and the small or solo practice dissolving and 
moving into as employees or into a larger physicians' group or 
employees of a hospital. But thosecosts do not change. Is it 
that just as a function of cash flow, as you got a small practice and 
there is a bump in cash flow and you have got this big overhead issue 
like paying your premiums on a medical malpractice policy, is that 
essentially the problem because I do not see where the costs are 
changing. They are very high, obviously, higher than they ought to be, 
but I do not see them materially changing from the individual from the 
small practice to a larger practice or as to employees of a hospital.
    Mr. McIntyre. Well, personally, my malpractice went from 
$40,000 a year in 1994 to $110,000 in 2010. We paid that and at 
one time, we had 7 orthopedic surgeons, almost a million 
dollars in malpractice premiums per year. That was a big 
number.
    Human resources, obviously, was the single most expensive 
item in our budget, but right below that was malpractice and it 
really became a burden to pay the malpractice, so much so that 
we shifted from doing it in quarterly payments to shifting to 
monthly payments. It was really a cash flow burden for us.
    Going to the hospital, the hospital assumes that cost. We 
do not see that cost at all and many of the hospitals are self-
insured in regards to malpractice.
    Chairman Coffman. Okay.
    Mr. McIntyre. So, that may affect the rates, but my 
personal experience, my hospital now is paying my malpractice 
premium for the policy that I have. Now, I would imagine at 
some point in time, that is going to be subsumed by their own 
malpractice policy.
    Chairman Coffman. Okay. Does anybody else have any----
    Mr. Smith. Well, just keep in mind that with these 
physicians, since Dr. McIntyre joined the hospital-based 
practice, the hospital loses money. There is not a true savings 
that occurs from him coming over. They typically lose money on 
these practices, but the hospital has to have physicians in the 
community. They really have no choice but to bear that 
potential loss.
    Chairman Coffman. But is it cheaper if a larger entity can 
be self-insured and manage its own liability or do these 
hospitals still carry third party insurance?
    Mr. Yasso. Well, Hospital Corporation of America in the 
metropolitan area of Kansas City employs over 250 physicians. I 
would think they get a bit of the economy of scale----
    Chairman Coffman. Okay.
    Mr. Yasso [continuing]. To some degree if they stick with 
one insurer and probably get a rate break to some degree.
    Chairman Coffman. In looking at the new health care law, 
the Affordable Care Act, there is a movement I think borne of 
that to accountable care organizations. So, there has been a 
trend prior certainly to the Health Care Act, a movement away 
as you all have tried from the solo practice, the small 
physicians' group to larger practices and to employees at 
hospitals. How has the current health care law or has it 
accelerated by that process?
    Mr. Smith. There is no question it has accelerated that 
process. It had the fear of the unknown and I think a lot of 
wait and see, see what would happen from the Supreme Court's 
decision. It has picked up the pace quite a bit. I would say as 
ACOs come closer, hospitals realize there is bundle payments 
looking for partners. At the same time, you see insurance 
companies not wanting to be left out as you have seen with 
Highmark in Pennsylvania buying hospital systems. So, there is 
a bit of a race for that finish line and physicians might 
experience running for cover because of the intensity of the 
penalties within the system.
    Some information we could provide is there is so much more 
regulation and the penalties are so great, I find physicians 
very fearful that they will make an honest mistake and being 
held accountable financially.
    Mr. Kennett. Speaking from my administrative side, I would 
say that probably the health care law has accelerated more on 
the part of the hospitals probably more so than physicians 
because of the fact of the Accountable Care Organizations, the 
bundle payments, and measures in there that the hospitals want 
to be sure they have enough primary care physicians 
particularly as well as specialists that they can have in their 
Accountable Care Organizations to beingable to participate. I 
think it has brought about some acceleration on the part of physicians 
just because of uncertainty, but as you mentioned, so many of these 
thing we talked about actually predated the Affordable Care Act.
    Chairman Coffman. Sure. I am going to ask one more question 
and then defer to Dr. Schrader and but then I will come back 
probably and we will go back and forth. Oh, and I am sorry, Ms. 
Hahn, as well, from California. And that is that you talked 
about the patient-doctor relationship being compromised, if you 
will, through the movement of the solo or small group practice 
to the larger group practice or to employees of a hospital. I 
wonder if you could all elaborate on that and please be 
specific in terms of examples of how you think that changes the 
patient-doctor relationship, this movement.
    Mr. Yasso. I think that one of the ways it change that, 
when you become an employed physician for particularly those 
physicians that come directly out of residency and become 
employed physicians and have never practiced in solo practice 
or owned their own business, it is more of a business now and 
it is I work for X number of dollars and I work X number of 
hours a week and that is all I do. I may not stay a little 
longer to say Ms. Jones, let us work her in or see that extra 
patient because they want to be seen, they need to be seen that 
day and do that. And you hear stories about that all the time 
about how physicians tend to cut it off and say well, I used to 
see 30 a day. Well, now I see 26 a day or I see 22 a day and 
those types of things and it is a problem, I think.
    Mr. McIntyre. My practice is two miles from my house, and, 
so, I take care of the people that live in my community. My 
reputation is predicated upon how I do that. So, not only was I 
very concerned about being a good physician, but running a good 
small business in my community. And what I said before in the 
testimony was that I had great ability to affect the atmosphere 
and the business that was there because I ran it. So, if things 
were brought to my attention by patients or staff or whatever, 
that we were deficient in that area, well, you can be sure that 
we changed that. Now, I am really not responsible for the 
policies of the practice; the hospital is. So, I am a little 
bit hamstrung in my ability to affect those policies.
    Yesterday, a patient came in. Supposedly, one of our 
doctors was not on the insurance panel because the hospital had 
not gotten us all on the various insurance plans yet and the 
patient was told well, you cannot see the doctor that you have 
seen for 10 years. If I were running the practice we would just 
have seen the patient and dealt with the insurance issues 
later. So, I think that when you are vested in your practice as 
a physician and also as a business man or woman, that lends a 
whole different color to the way you approach it.
    Mr. Kennett. I might differ slightly because of the fact 
that I do not think being employed has changed my physician-
patient relationship. I think I feel the same about my patients 
as I always have in the past 30 years. There is a lot of 
regulatory and reimbursement issues that have affected 
relationships because we cannot provide the services we used to 
provide. That is a real concern. And, quite honestly, there is 
an evolution in medicine that is going to change physician-
patient relationships in the fact that we now have 
intensivists, we have hospitalists, we have an nocturnist, we 
have shift medicine, and that is what the younger physicians 
like in many instances. And, so, that is changing the 
physician-patient relationship.
    Mr. Smith. I would add quickly the difference to me, the 
patient is access. Today, we have a shortage of physicians in 
many parts of the country and surveys I have read had shown 
that employed physicians, the risk off the table, they are no 
longer business owners, see about 7 percent fewer patients and 
this is at a time we already have a shortage and we are looking 
to add 30 million people for this process. To me, that is a 
great concern.
    Chairman Coffman. Dr. Schrader.
    Mr. Schrader. Thank you, Mr. Chairman. Well, thank the 
panel as I guess retired, small business. Been a practitioner 
for 35 years, started my own business from scratch when you 
could do that sort of thing. My humble opinion, much as had 
been stated here, I mean, that is almost impossible to do. I do 
not care what sort of medical practice you are into. I mean, 
the tax law has gotten byzantine. I actually did my own tax 
returns when I started my practice. It was actually doable and 
I felt like I was not committing--and the regulatory burden, 
and certainly those in the medical profession, with all the 
different regulatory frameworks come out, the SGR has been a 
sword of Damocles hanging over every physician's head, I do not 
care who you are, for many years. Sometimes we treat it almost 
cavalierly here in D.C. because we ``never let it happen,'' but 
it is still there and it is still disrespectful, I think, of 
the hard work that folks put in. It makes it pretty tough. It 
makes it pretty tough.
    The debt burden now that youngsters came out with, I mean, 
gosh, my tuition, I am embarrassed to say, graduated college a 
few years ago, like $700. Students would kill themselves to do 
that now. I am a dinosaur, but not that much of a dinosaur.
    But the other thing I think the panel has alluded to a 
little bit that did not get brought out is there is a change in 
attitude among the young people. I do not care, and this is not 
just the medical profession, I see this in a lot of my other 
business friends and associates where the idea of starting a 
risk-based enterprise, well, there are lots of great 
entrepreneurs in our great country, thank goodness, and that is 
what is going to make and continue to make our country great. 
In some professions, they are a little less more risk diverse 
for a lot of the reasons you all have just enunciated here. It 
seems almost daunting for these people with the debt they come 
out with, the regulatory burden that is out there, the 
uncertainty, and I will grant that the ACA does create some 
uncertainty out there. It is one of many issues I think face 
our medical community.
    I would like to get some thoughts about potential solutions 
going forward here. So, I guess one main question I would ask 
the panel here is of the many things you have talked about 
today from taxes to debt, SGR to other regulatory burdens, ICD-
10 codes, some of the aspects of the ACA, what is the single 
most or one or top two burdens that we should talk about trying 
to eliminate or change and make less burdensome for you guys to 
get it back to the practice of medicine that we all do so well?
    Mr. Kennett. So, Congressman, I think that, to me, without 
a doubt, the biggest thing you can do is to eliminate the SGR 
and have a stable platform for physician payment that is fair 
for the appropriate service that they are providing going 
forward so that the physician is on a yearly, monthly sometimes 
basis, do not know what the payment is going to be next year 
and do not know if their claims are going to be held and they 
have to go borrow money to make payroll. So, taking care of the 
Medicare physician payment platform going forward would be a 
huge step forward.
    Debt, I think, is a very big issue for these kids coming 
out of school today or residency. If we could find a way to 
either help them defer their debt for a while so they have the 
opportunity to go into private practice or if we could find a 
way, particularly if they go into underserved areas and take 
care of people that truly need help, to eliminate their debt so 
that they can stay in practice and stay in areas where people 
truly need their service.
    Mr. Schrader. Very good. Thank you.
    Dr. McIntyre.
    Mr. McIntyre. I think as a philosophy, we might want to 
inject some market principles into the physician-patient 
relationship and have providers compete not only on quality 
issues, but also on price issues, which we have not done in 
decades. I think that might go a long way to decreasing costs 
and increasing quality. If we decide we do not want to do that, 
then I think to strengthen private practice, we needto allow 
private practitioners to band together to negotiate rates without 
owners' overhead structures so that they can compete with what is 
becoming monopsony. We have the big medicine, big insurance, and the 
government, and with consolidation, I do not think we are going to get 
the cost containment we need. I think we need more players in the 
market to do that and facilitating private practice's ability to 
negotiate, I think might go a long way to contain cost and increase 
quality.
    Secondly, I think malpractice tort reform will go a long 
way to decreasing the costs not only of private practice, but 
of medicine in general.
    And, lastly, especially with the SGR being such a problem 
and being so expensive and the problems in trying to eliminate 
it as well as deal with Medicare reimbursement cuts that are 
supposed to go through the ACA, perhaps, we might want to think 
about bringing back balanced billing to the Medicare equation 
that was part of the program for the first 20 years of its 
existence. And I think it could be done in a way that would not 
hurt seniors, but would allow private practice to continue to 
serve Medicare patients.
    Mr. Schrader. Mr. Smith.
    Mr. Smith. Oh, I agree with all three topics mentioned: 
SGR, medical debt, something we hear on a daily basis from the 
folks that we are talking to, and tort reform. I would add to 
tort reform that the impact goes beyond the malpractice. The 
cost of defensive medicine is something that has been 
calculated in incredible numbers, where physicians are forced, 
they feel, to protect themselves by doing additional tests 
under normal circumstances they might not do. So, that cost is 
significant.
    The other thing I would mention is to relax some of the 
regulations that are in Stark II as it implies to recruiting 
physicians in the community. Being a solo practitioner is near 
impossible. If you can get a partner or two partners, you have 
a chance. Unfortunately, stipulations in Stark II make it 
difficult because you cannot share any of your costs. You have 
to bear that burden of the cost that exists to bring a new 
associate in and most physicians cannot go through that year 
process to wait for that new person to contribute to their 
overhead to be able to afford to bring them in. So, that would 
be a real benefit.
    Mr. Schrader. Very good. Very good.
    Dr. Yasso, you talked about medical home, and I thought 
about this myself, as maybe being a way to get back to where 
the physician is ultimately in control, one of the things that 
is in the ACA that maybe needs to be fleshed out more. There 
was some loan forgiveness over a period of time for new 
students and that we tried to give a little better deal for 
primary care docs that actually opted to go into some sort of--
in particular will do that, but primary care.
    But I thought that maybe the medical home, and everyone has 
alluded to this. I mean, the doctors have to be in charge of 
decision-making, not the hospital, not the insurance company, 
not the outfit you would hire to run all your books and stuff 
and can you elaborate a little bit about what would you be 
looking for, how would you be talking to CMS about how to 
organize this so the docs are in control?
    Mr. Yasso. Well, I think the PCMH is set up in such a 
fashion that it is under the control of the physician. It is a 
collaborative approach to medicine and a team approach where 
everybody is involved in the care of the patient. That includes 
the medical assistants in your office, your nursing staff, even 
the front office staff for that matter. Everybody is involved 
in the care of that patient rather than--an even footing to a 
degree and things are done for the patient by everyone, not 
just the physician, not just the nurse, but everybody gets 
involved in the care. That is the whole idea behind the 
patient-centered medical home. And then you develop 
relationships as a primary care physician, you develop 
relationships with specialists that you know are going to 
provide quality care for your patients and you deal with those 
people and you discuss the care so that you knowwhat kind of 
care that individual is receiving that is the best possible care that 
they can get.
    If you take that a step further and you look at the 
Accountable Care Organizations, I was talking to a physician 
yesterday who practices in the Phoenix area and they have been 
very successful in setting up an ACO down there that is driven 
by primary care. It is not driven by the hospital, it is not 
driven by the specialist, it is driven by primary care, which 
seems to be very cost effective and providing good, quality 
care.
    So, I think two things. We need to keep in mind when we 
talk about ACOs in particular is they need to be driven by 
physicians, not the hospital. My concern when I first started 
hearing about ACOs was that they were something akin to the old 
PHOs, Physician Hospital Organizations, which for all intents 
and purposes was driven by the hospitals and that is what we 
really need to avoid because the care, the rubber that meets 
the road is where the patient sees the doctor and that is where 
the care is delivered. It is not by the hospital per se on a 
daily basis. So, the physicians really need to be in control of 
that.
    Mr. Schrader. Dr. Kennett.
    Mr. Kennett. Just would like to make just two additional 
comments about medical homes. The first is medical homes, as 
Dr. Yasso said, requires some additional resources within your 
office. People teaching dieticians. So, we have to be sure that 
they are reimbursed adequately that they are going to be able 
to provide those additional resources.
    And the second is that the medical home needs to be 
assigned to whoever actually should be in control of that 
patient's care on a regular basis. If that is a patient that is 
on dialysis, then really the nephrologist probably ought to be 
their medical home, it is the patient that has got chronic 
congestive heart failure, then probably a cardiologist. There 
is a huge majority that should be in the hands of the primary 
care physicians, but it needs to encompass all these other 
specialties, as well.
    Mr. Schrader. Just a final comment then, Mr. Chairman. I 
really appreciate this panel and the topic we are discussing. 
It is near and dear to my heart and very concerned about the 
future of medicine from all walks of life.
    As a little, old, country veterinarian, I enjoy the 
opportunity to get to know my patients, see them from birth to 
their passing. It is a beautiful thing. But I rely on the 
specialists. I think we have got a great relationship in the 
veterinary world where we are not afraid to send it out. In the 
old days, it used to be keep everything pretty close and the 
medicine has changed. Hopefully, physicians, veterinarians, and 
other practitioners of all sorts have come to that realization 
and we will work through that.
    I guess my last point would be that I hope each and every 
one of you are active in making sure that whatever comes out of 
health care evolution, whether it is related to ACA or anything 
else, that some of us are pushing to reform the SGR, this bill 
out there I am cosponsoring with Allyson Schwartz and others to 
get rid of the SGR and get to a smarter level playing field. 
She is actually like a part of the solution and not just a part 
of the whipping child that is out there at the end of the day. 
But, hopefully, it will be a good process, a better process at 
least going forward and I appreciate the Chair bringing this 
issue to Small Business' attention. Thank you, sir.
    Chairman Coffman. Thank you, Dr. Schrader.
    Ms. Hahn from California, and I will relax the five-minute 
rule.
    Ms. Hahn. Thank you, Chairman Coffman, Ranking Member, Dr. 
Schrader.
    I want to thank the Chairman for holding this hearing. 
Really appreciate the witnesses that are here today, all of you 
who are involved in some aspect of health care and getting 
folks healthy. We really do appreciate what you are doing.
    It is interesting because, I mean, I know the more 
Affordable Care Act is implemented and this lifestyle, I think 
a lot of the issues as I understand that you brought up today 
are actually addressed in this new law.
    Loan repayments. There is a lot about helping students 
repay their loans or forgive their loans, particularly if they 
serve in areas that have seen a shortage, talked about, Mr. 
Smith, the shortage of physicians. There is actually a lot in 
the health care act about providing incentives and scholarships 
to encourage more doctors, physician assistants, folks to go 
into this field.
    I agree with Dr. Schrader, there are many of us who want to 
have a permanent doc fix and I hope we do that in Congress with 
the SGR.
    This is a small business committee, so, it is really 
interesting to hear your views as it relates to being a small 
business person. I am wondering how much training did you get, 
how much are students in medical school actually getting 
business training, would be partnering with business schools 
and medical schools. And, again, I am always trying to figure 
out what our Small Business Administration is doing to help 
small businesses. Is there a better role? Is there any role? 
What is Small Business Administration doing as it particularly 
relates to physicians who are attempting to run a small 
business and what can we do better to help that aspect so 
that--it sounds like we would like to ultimately see more 
doctors continue to be in the role of being a small business 
owner.
    Mr. McIntyre. Training would be zero. On-the-job training 
would be zero. We learned it on the fly. And many of my 
colleagues who I interact with in the regulatory arena have 
gone on to get MBAs. I know a boatload of orthopedic surgeons, 
MBAs. So, there are a number of people who are doing that. But 
in terms of the Joe lunch bucket doctor, I think that the 
training is pretty much zero.
    Ms. Hahn. So, in medical school, there is no sense that it 
could be an important part of your success as a doctor who 
wants to be also a small business man?
    Mr. Yasso. Some of the schools, my alma mater being one, 
offers an MBA degree, but not to everybody. They keep it to a 
very small number of students that can get involved in that. 
So, there is some, but as far as any kind of formal training 
for everybody else or even just basic business courses, no. 
There really is not.
    As far as what can you all do, promote some of the things 
we talked about, I guess, and some of the things that you 
mentioned that are in the Affordable Care Act that might be 
helpful to make sure that those things come to fruition. If 
they are unfunded mandates, they do not do us any good. So, 
that is really the key to see that some of those things come 
out and really give us what we need to promote people to at 
least consider going into solo practice or small practices.
    Mr. Kennett. Congresswoman, I would say that certainty 
going forward is what these small businesses need and that 
relates to what we said. Reimbursement, knowing what you are 
going to get paid down the road, and reducing the regulatory 
burden, which is huge. If you could help those two, they would 
have a lot more businesses staying in practice.
    Ms. Hahn. I am going to follow-up because the Affordable 
Care law also aims to reduce paperwork and administrative costs 
by standardizing billing, and between 2013 and 2016, the rules 
will be implemented to standardize health insurance processing 
requirements.
    Mr. Smith, you worked on this Merritt Hawkins whitepaper 
where ``Physician practices should benefit from improved 
revenue cycles and save time and money tracking claims.'' So, I 
am thinking since these rules are not finalized yet, maybe this 
is an opportunity. Your whitepaper suggests that this is a 
potential cost savings. So, while we are considering these 
rules, what should we be keeping in mind to maximize these 
potential cost savings within this particular realm?
    Mr. Smith. Well, anything we can do to keep it as simple as 
possible would be a plus, which obviously we solve the depth 
and the weight of Affordable Care Act to just pay for a loan 
and people are just really digesting all the areas and 
attempting to refine some of those areas. And to lessen the 
penalties in certain areas where things are unknown. There is 
an example of which if there is a whistleblower situation, the 
Medicare can suspend payment to the physician for that 
whistleblower act if verified. So, in essence, you could have a 
disgruntled employee who makes a claim, Medicare suspends 
payment to the physician, and it's over. And I would bet that 
three physicians on this panel, if you had zero Medicare 
revenue from guilty to proven innocent could crush any of their 
practices and several examples like that, again, unintended 
consequences.
    Ms. Hahn. Thank you very much.
    Mr. McIntyre. I think that to standardize the billing 
process as you alluded to in the ACA would go a long way. For 
example, Medicare is about 23 percent of our business, but was 
our most prompt payer. We could anticipate Medicare 
reimbursement within 18 days of the bill being sent out as long 
as it was a clean claim.
    Managed care companies on the other hand, had an average AR 
timeframe of 45 days. And we got much more runaround and hassle 
from the managed care companies in regards to them saying a 
claim was not clean, them wanting more information.
    So, a standardization of that process, I think, would go a 
long way to help the private practice.
    Mr. Kennett. Congresswoman, I can give you one quick 
example of one of the regulatory things that happened to 
physicians that make no sense. So, the rack auditors, which I 
am sure you are probably familiar with that can go in and take 
money back from hospitals for whether the patient inpatient or 
outpatient. So, now, a patient can be in the hospital and just 
because there are some regulations of you tell them that they 
are inpatient or you call it inpatient or outpatient, same 
exact service is provided in the hospital, but then the rack 
auditor comes in and says no, they should have been called 
outpatient. They can take back the physician's reimbursement 
any services that are provided during that hospitalization. It 
really makes no sense.
    Ms. Hahn. Thank you.
    Mr. McIntyre. So, there is one additional program, too, the 
Medicare Administrative Contractors, which is also 
retroactively denying services for lack of paperwork. For 
example, in orthopedics, the MAC are denying payment for total 
joint replacements unless there is documentation of 
unsuccessful treatment with physical therapy for three months 
prior to the procedure. Not only is this very costly but there 
is nothing in the literature that supports that such treatment 
is efficacious. In addition, the rules of these programs are 
unknown and they are enacted retroactively, making them 
impossible to comply with. This really will affect patient care 
negatively.
    Chairman Coffman. Thank you, Ms. Hahn.
    The Chair recognizes Mr. Tipton of Colorado.
    Mr. Tipton. Thank you, Mr. Chairman, and I apologize for 
being late. We had a natural resources meeting, as well. So, I 
sent your regards to that meeting. I know you could not be 
there because of here.
    I would like to thank our panel for being here. Incredibly 
important issue, particularly for districts like mine, rural 
Colorado, 54,000 square miles, and as I have traveled through 
those 54,000 square miles, just held a town hall meeting with 
senior citizens in Pueblo, Colorado, last week, they are 
worried about the president's health care mandate and how it is 
going to impact them. I have got senior citizens in Del Norte, 
Mono Vista, Alamosa, Cortez, Crawford, Hodgkiss, Edgar, some 
towns a lot of people have not even heard of, they cannot find 
a doctor that is willing to take Medicare.
    So, I guess, Mr. Smith, I would like to be able to start 
with you. With a number of small business and a lot of our 
doctors are small business people, solo practices, what effects 
will the president's health care mandate have on rural 
Americans, rural citizens' access to health care in your 
perception?
    Mr. Smith. My perception, the impact I look at first is of 
the patient. As you mentioned, very difficult as a patient. A 
new patient, physician practice, could be seen if you have 
Medicare, especially if you have Medicare without any kind of 
gap insurance. A physician has to limit the amount of Medicare 
that they see in their practice to be financially viable. If 
you have pure financial to procure practice, it is not viable. 
The reimbursements are too low to be able to do that.
    Most physicians that I work with, we conduct about 3,000 
searches a year around the country so we have an excellent of 
information will tell me that Medicare rates, they generally 
break even as a cost of doing business. So, you have to keep 
that to one-third of your practice.
    Some specialists, such as internal medicine, you might get 
it to half, but you cannot have that happen. You see physicians 
as they get older, their patients get older, and more and more 
Medicare and you can look at their financials and they slowly 
dwindle until such a day that the decision is I am working for 
free, I have to get out of practice.
    So, now, as we look at this, we have patients that could 
come onto the system, was going to pay Medicaid rates and we 
are elevating them to Medicare, thinking that is going to be a 
driver for physicians to see them. One, that is a temporary 
rate. Two, it is not a factor and those patients, 30 million 
people we are adding to the system, will have a card that gives 
them insurance or a version thereof. What they will not have is 
access.
    The second expense, the legislation does address some areas 
of need, attracting people to the system. The shifting of 
unfilled primary care spots, that really is resulting in a few 
hundred positions, but the issue is we can add as many people 
as we want to the medical schools, but we have not added a 
single dollar as it comes to residency. And, so, all you will 
be doing is shifting foreign positions out of the system and 
replacing them with American-trained physicians, but at the end 
of the day, there is the same number of physicians coming out 
of the machine and in places like Russia and Trinidad and 
Serbia will still not be able to find a doctor because there 
will be more attractive options in large states.
    Mr. Tipton. If we could, Mr. Smith, I would like to explore 
that a little bit because you were focusing a little bit on the 
economic----
    Mr. Smith. Okay.
    Mr. Tipton. From the doctor's perspective--the majority of 
doctors I know actually went into health care because they 
truly care about people. They are going to limit the number of 
patients that they can see simply because they want to be able 
to provide quality health care. If you are trying to run them 
through like an assembly line, is that going to reduce the 
quality of health care?
    Mr. Smith. Well, there is no doubt. I mean, the physician-
patient relationship is the most critical thing we can talk 
about and the colleagues here, I am sure, would completely 
agree with that. But the only choice is to do more and I would 
bet that each of these physicians here see a few more patients 
each year to be able to make their practice viable. Not so much 
as just financial reward, but just to make it a viable business 
that employees will be able to count on and you want income, 
but the patient will be left on the sideline.
    Mr. Tipton. You just mentioned doctor-patient relationship. 
We should not be getting between that, but if there is going to 
be a medical decision that is to be made, let us have the 
family patient doctor do that in the doctor's office. Do you 
have some concern about the IPAB Board?
    Mr. Smith. Well, yes, to answer your question. We have seen 
this in other countries. We have seen some of the impact it has 
had. I saw recently in Europe where epidural injections were 
taken off the list of care to be provided, other decisions that 
are being made, but in each of these decisions that you see 
along the way, the majority of these decisions are made without 
physicians involved. We speak to thousands of physicians on a 
monthly basis, and I have yet to find any of the ones that had 
the lab coat that were on the front line during these 
conversations. But anything we can do, it has to come down to 
the physician-patient relationship.
    Mr. Tipton. Dr. Yasso, I saw your head nodding. Would you 
like to make a comment on that?
    Mr. Yasso. I would agree and the American Osteopathic 
Association adamantly opposes the IPAB. We think that is just 
wrong-headed for no other way to say it.
    The other thing that is concerning to me in regards to 
Medicare, as Mr. Smith said, you are almost getting to a point 
where you are just barely breaking even as far as reimbursement 
is concerned. What happens in the next 10 years when they cut 
$500 billion out of Medicare because of ACA? Does anybody know? 
I mean, obviously, reimbursement is going to take a hit. It has 
to take a hit. I do not see how else you are going to reach 
that number.
    Mr. Tipton. Excellent point, and Dr. McIntyre, maybe you 
would like to jump in a little bit on this because I think Mr. 
Smith said it very well. We can insure everyone in the country, 
but there is a quantitative difference between insure and 
health care. Two completely different things. And if we are 
wanting to be able to get at health care, are you seeing a real 
problem with the president's health care mandate when it gets 
down to actual delivery of health care?
    And I am speaking primarily for rural America, rural 
Colorado. I know some of our metropolitan areas have 
anabundance of doctors and specialties, but let us talk about rural 
America.
    Mr. McIntyre. I do not know that a mandate in itself 
creates an access issue. I think the access issue is really 
driven more by reimbursement level. So, if your reimbursement 
level falls below the level of your ability to deliver the 
care----
    Mr. Tipton. But the reimbursement level is actually via the 
mandate. That is part of the program.
    Mr. McIntyre. Well, my understanding of the ACA is that it 
does cut $500 billion out of Medicare----
    Mr. Tipton. Five hundred seventy-five billion.
    Mr. McIntyre. Over 10 years and does fail to correct the 
SGR, which is another $300 billion. So, I think that is the 
access issue. I think I certainly have a philosophical and 
constitutional issue with the mandate myself personally, but, 
perhaps, I am not sophisticated enough to realize how it will 
impact access other than the issues we spoke of. It is possible 
to provide someone with insurance, but if that insurance does 
not pay costs, then you are basically uninsured.
    For example, if you put people on Medicaid, I think it is 
something like 40 percent of all physicians will not accept the 
Medicaid patient because the reimbursement is so low and I 
believe my understanding of the ACA is that by 2019, Medicare 
rates will be around what Medicaid reimbursements are now. So, 
I think that is a huge issue and a potentially devastating one 
for access to care for Medicare patients going forward.
    Mr. Tipton. So, effectively, our senior citizens, people 
who have run the race are walking in the door with their 
Medicaid card, putting it on the table, it is insurance and 
they are not able to get a doctor.
    Mr. McIntyre. I think you could definitely see that 
problem.
    Mr. Tipton. That is a real challenge.
    Mr. Smith.
    Mr. Smith. To add to it, one of the things that my firm 
does, we do studies on wait times. How long does it take to get 
to see a physician? An unintended outcome that we discovered 
was the greatest increase in wait times of any metropolitan 
market was Boston and the difference between what occurred 
between our first wait time survey and our second was the 
implementation of universal health care.
    So, a place that I think any of our colleagues would 
probably have the most physicians, the most training programs, 
the environment you would not expect to have that issue are 
having that issue. So, if that is happening in Boston, what is 
going to happen? I do not think that is a difficult question to 
ask.
    Mr. Tipton. Right.
    Dr. McIntyre, maybe if you would like to, we have got to be 
able to address some of the accessibility. Every American, I 
think that we can all agree, we want affordability, 
accessibility. The president's health care mandate fails on 
both accounts.
    What can we do? What should be done to be able to increase 
the number of physicians that are going to be able to get into 
some of these rural areas to be able to provide that access to 
health care?
    Mr. McIntyre. In answering a similar question, I thought 
perhaps injecting a market-based solution to this problem would 
go a long way to improving quality, decreasing costs, and 
improving access. I think if the patients have some skin in the 
game, then they are more likely to seek health care that is of 
quality to them. If somebody is paying for their health care, 
especially if it is first dollar coverage, they are less likely 
to become shoppers, they are less likely to search for quality. 
They are much more likely to search for volume.
    So, I think in the current situation, we have a volume-
driven process that is going to be exacerbated by the health 
care law instead of one where we will be looking for quality.
    The health care law does attempt to impose quality on the 
system through comparative effectiveness research and on other 
things, but that is sort of a top-down approach.
    Mr. Tipton. Ultimately, and I would just kind of like to 
get your thoughts on this, original CBO estimates on the 
president's health care mandate stated it was going to cost 
$900 billion. In the White House, there was dancing in the 
hallways over that number. I am a small business guy and I know 
$1 billion is a lot of money. CBO just rescored this. It is 
going to be $1 trillion and $787 billion. With administrative 
costs, we are going over $2 trillion.
    Is there a better way to be able to spend $2 trillion?
    Mr. Kennett. Congressman, if I could, I would like to just 
comment a little bit on before and then this question, as well, 
and that is that if we are going to increase access, we have to 
be able to pay for it. And, so, that is a concern. We have to 
appropriately pay physicians for the services they perform. So, 
if we are going to reduce costs within the system, I think if 
you get any larger number of physicians in a room and talk 
about how we are going to reduce costs, that you will come to 
the issue of utilization.
    And, so, the American College of Cardiology for years has 
been working on the perfect use criteria and our registries and 
I think that we as a profession are going to have to look at 
the appropriate utilization and cut out the utilization that is 
inappropriate and that could save possibly as much as one-third 
of what we are spending right now on health care.
    Mr. Tipton. Would tort reform be a good idea?
    Mr. Yasso. Absolutely, and I was going to just mention 
that. The patient comes in with back pain, let us say, and you 
may send them for X-rays of their back, let us say low back 
pain. They come back and they say well, doc, you gave me some 
medicine, it really did not help, I still have the back pain. 
And the next thing you know, you are ordering an MRI. Why do 
you do that? Is it because it is really a necessary test or is 
it because you are worried about the liability of the 
situation? Am I missing something? Is there something else 
going on here that I will pick up with the MRI? And you are 
thinking about the legality of the situation more than you 
are--is this really appropriate care for the patient? And 
medical liability is what is perceived a lot of times and I 
think that is really true in the ER setting. You wonder how 
much money is spent needlessly in the emergency room on CTs of 
the head, stress tests for chest pain, all those kinds of 
things where they may not necessarily be needed.
    Mr. Tipton. I mean, I thought it was curious that the 
administration and the 111th Congress, we are in the 112th, 
would not even consider tort reform because I have actually 
held meetings with physicians. I just met with about 24 
physicians over in Brentwood, Colorado. Tort reform came up as 
one of the number one cost drivers and it is fear factor that 
if the patient is not totally forthcoming and you did not catch 
it, you can be sued. We have got to be able to bring some 
common sense into that portion of the equation, as well. So, 
certainly thank our panel for taking the time to be able to be 
here. We would love to be able to hear more from you. This is 
about affordability, it is about accessibility, and as I travel 
through rural Colorado in my district, I am talking senior 
citizens right now who are frightened about what the 
consequences are going to be to their health care going forward 
as we continue to see the president's health care mandate put 
into place and I think maybe we should have started with you at 
the very beginning, talk to the physicians before they started 
writing a 2,000-plus-page bill that many of them did not read, 
yet passed, and Minority Leader Pelosi was correct. She said we 
will find out what is in it once it has passed, and, 
unfortunately, that discovery is still continuing. We are 
seeing increased costs, increased control, and reduced access 
to health care in this country. Thank you for coming in today.
    I yield back, Mr. Chairman.
    Chairman Coffman. Thank you, Mr. Tipton. I have got a few 
other questions. I want to make sure that we have everything 
done on record.
    Dr. Yasso and Dr. Kennett, in your written testimony, you 
both mentioned a burden of complying with statutory and 
regulatory requirements, particularly electronic health 
records, electronic prescribing, and physician quality of 
reporting, which will carry significant penalties for non-
compliance in future years.
    Would you elaborate on how these burdens disproportionately 
impact a small or solo practice physician's time and revenue?
    Mr. Yasso. I have a friend that practices in Kansas City 
and has a predominately Medicaid practice. She has chosen to 
date not to implement the electronic health record because of 
the expense. I mean, she is barely breaking even paying her 
help, taking a salary, and those types of things and she is a 
very altruistic person and she wants to take care of her 
patient population, but she cannot afford--and even though the 
government says well, we will reimburse you if you put in a 
system that is compatible or I forget what the terminology is 
for that, but, anyway, she has made the decision that in 2014, 
she is going to retire. And the community is going to lose one 
darn good doctor because of that. And it is those types of 
things. It is just a heavy burden in situations like that and 
it takes good people out of the practice of medicine.
    Mr. Kennett. With our group of physicians, there were only 
11 at the time, we spent about $700,000 on electronic health 
record and you do not recoup very much. On an ongoing basis, 
you had that expense of maintaining it on a regular basis and 
the other bad part of that, when you first institute an 
electronic health record, actually it reduces your productivity 
pretty dramatically for the first six months or so and then you 
come back, but you are never going to get back to where you 
were before.
    So, you are going to have to have electronic health record 
to demonstrate meaningful use, and if you do not, you get 
penalized for all your Medicare, funds will be cut--you are not 
participating in meaningful use and you are not e-prescribing, 
and it goes on and on. So, that is one of the drivers to 
hospitals is because the hospital can better afford--they still 
had to lower costs involved, yet they can better afford to 
absorb those costs in the small physician practices.
    Chairman Coffman. Mr. Smith, your testimony mentioned the 
high cost of malpractice insurance. Do you think malpractice 
reform will help a small practice physician to shoulder the 
burden and how so?
    Mr. Smith. Well, I think if tort reform would be part of 
the legislation, you would have seen a much greater acceptance 
of the physicians of this legislation, of the changes that were 
coming, but we have seen in states that apply tort reform, that 
it is a significant cost savings to the physicians and, of 
course, what I mentioned before, the cost of defensive 
medicine, which is an intangible cost that is significant, 
would be impacted, as well.
    Chairman Coffman. Dr. McIntyre, some health care mandates, 
such as the reporting requirements for health information 
technology and establishing Accountable Care Organizations are 
first instituting with ``incentive payments,'' but involved 
penalties later.
    Do you think that the inability to comply with mandates may 
be contributing to the disappearance of small medical practice?
    Mr. McIntyre. The short answer is yes. We implemented an 
electronic medical record in 2002. So, we were early adopters. 
Totally, we spent $500,000, which was about $100,000 per 
doctor. We initially saw some savings because we were able to 
get rid of file clerks and paper costs and transcription costs, 
but going forward with upgrades and having to hire new staff to 
enter data, those cost savings went away. So, basically, it's a 
huge cost for a small business. The HITECH Act leaves 
physicians $44,000 over 5 years to implement a record as long 
as they comply with meaningful use. So, that would not even 
cover half of our investment per doctor.
    In addition, the quality reporting in much of the act is 
very difficult to comply with because the quality reporting 
criteria have been developed by National Quality Forum and 
places like that of the I think it is 44 quality measures, only 
3 of them apply to orthopedics at all. So, we were trying to 
fish around for what we are going to start reporting on to 
comply with the mandate. Asking people about looking at things 
sometimes had nothing to do with what they were seeing us for. 
We have to report those things, even though they are not in the 
scope of our practice, just because of the reporting 
regulations.
    Chairman Coffman. Dr. Kennett.
    Mr. Kennett. Chairman Coffman, I will just give you a quick 
personal anecdote about tort reforms. Missouri has a tort 
reform law with a cap on non-income damages of $350,000. So, my 
insurance says an interventional cardiologist dropped from 
$35,000 to $14,000.
    Chairman Coffman. Right, okay.
    Mr. Tipton.
    Mr. Tipton. Thank you, Mr. Chairman. I just did have one 
follow-up question.
    Dr. McIntyre, you had brought it to mind and it is not in 
regards to the electronic medical records, but going back to 
Medicare, being able to fill out compliance forms to be able to 
get paid.
    Has it been your experience many in all of your 
professions--I talked to a good family practice doc in my 
hometown, finally just pretty much quit simply out of 
frustration from the standpoint that they had moving bars when 
it came to being able to fill out the forms, make sure they 
filled in the right dots, and it was constantly changing.
    Have you written any analysis in terms of the costs, how 
much you were spending rather than spending time with patients, 
you are paying people to be filling out more records when it 
comes to Medicare?
    Mr. McIntyre. Well, certainly, our costs in general 
increased significantly to the point where they were about 80 
percent of revenue for our clinical practice. We had other 
portions of the practice that had a lower overhead figure but 
even with those figured in, our total overhead cost was about 
63 percent, but that had increased hugely since the earlier 
part of the 1990s. We never culled out Medicare specifically to 
analyze the cost just for Medicare patients, but overall, it 
increased tremendously. When I started, we had one billing 
person. When I left, we had six. When I started, we had one 
person to do pre-certifications and things like that. When we 
sold the practice, we had one person per physician. So, all 
these things added up over time.
    Mr. Tipton. I am sorry, I apologize for interrupting, but 
just so that I am clear on that, you did not mean you were 
seeing more patients, that you were putting out more bills, it 
was just compliance?
    Mr. McIntyre. Right, just compliance, correct.
    Mr. Tipton. Just strictly compliance.
    Mr. McIntyre. We did have to ramp up volume, too, because 
we could not----
    Mr. Tipton. Pay for it.
    Mr. McIntyre. Since we were getting a set fee, the only way 
for--there are two ways for a private practice to increase 
income in a set-fee market and that is to see more volume or to 
add ancillary services. You can decrease costs, but the quality 
of your service suffers to the point where you are not worth 
going to see.
    Chairman Coffman. Dr. Kennett.
    Mr. Kennett. Congressman, I would just say that I hope CMS 
is not listening or the Department of Justice, but if on a 
regular basis a physician actually read all the documents which 
you are supposed to sign every day, it would add hours to your 
day. There is no way. You have reams of documents that you go 
through every day you sign your signature on, whether it is 
home health or hospice or Medicare documentation, it is huge; 
there is just no way you can actually read it all.
    Mr. Yasso. When I first started in private practice in 
1980, there were three of us, three physicians, and we had four 
people working for us, two in the front office, two in the 
back, and that was it and we did just fine. Today, with four 
providers, three physicians, one nurse practitioner, we have an 
office manager, four people working in the front office, and 
four people working in the back office. So, I mean, realizing 
we have got one more provider than we did 30 years ago, but, 
still, all this regulation and all the things that we need to 
do, the precertification of everything, you just have to have 
more bodies. You cannot get by without them.
    Mr. Tipton. It is no consolation, but in this country, 
businesses are paying $1 trillion 750 billion per year on just 
regulatory compliance. Small businesses are paying $10,685 per 
employee in regulatory compliance. We all know there needs to 
be some regulations, but I think we have certainly seen an 
overreach in the complexity that is inhibiting the very 
important work that I know you physicians in particular want to 
do, and that is to be able to provide quality health care at an 
affordable price. So, thank you.
    Thank you, Mr. Chairman. I yield back.
    Chairman Coffman. Thank you.
    Dr. Yasso, I have got a question. Do you think small or 
solo practices may survive, but only if they fill a particular 
niche such as concierge care?
    Mr. Yasso. I think that could be the way that this goes. I 
have a friend of mine that has started a concierge practice, at 
least part of what he does. He does not do 100 percent of that 
yet, although, he may very well move into that direction at 
some point in time.
    It is my understanding that you see a lot of that and Mr. 
Smith could speak to that, I am sure, on the east and the west 
coast and I am sure that eventually, that is going to move 
towards us. It only makes sense from the private practitioner 
if he wants to stay private that he does something like that 
because now he controls his income. It is not controlled by the 
government, it is not controlled by any regulator, he controls 
his income and that makes sense.
    Mr. Smith. I would like to just simply with that, because 
concierge medicine, people think of it as the billionaire's 
medicine, the doctor follows them around, and that does exist, 
but if you were a primary care provider in solo practice, you 
are going to have three to four employees, you are going to 
have 50 to 70 percent overhead costs, and you are questioning 
what do you do? Do I join a hospital? If you can today become a 
concierge physician, you can take that panel, which could be as 
low as 2,500, 4,000 patients and if you had 500 of them agree 
to pay you $50 a month and you would see them just in their 
office and take care of all their needs, you would make about 
20 percent more money than you made the other way. So, you can 
survive, but from a small business perspective, you would trim 
your staff one or two people. So, very lean and those are good-
paying jobs, jobs that we hear talk about our health insurance, 
a big part of the opportunity, but these are smart individuals, 
they will find a way to adapt and coming off the grid and doing 
that is one way.
    And the second thing I would keep in mind is what if you 
are not one of the 2,500 that can afford the $50 a month? So, 
we have taken that FTE from a full position down to about 15 to 
20 percent of an FTE and in environment we already have a 
supply challenge.
    Chairman Coffman. My final question involves seniors, 
seniors on Medicare, seniors in my district and across the 
country. And seniors on basic Medicare had a very challenging 
time, an increasingly difficult time finding physicians that 
will see them and with the Independent Payment Advisory Board 
that will be fully online I think in 2015 according to the 
Affordable Care Act, is that not going to make this situation 
all that much worse when the new way of controlling spending is 
to have this 15-member board control spending through 
restricting reimbursement levels. It seems essential, that is 
how we are controlling spending in the Medicare system. And, 
so, I wondered if any of you have any comments on where you see 
senior care going under Medicare.
    Mr. McIntyre. In addition, I believe that the IPAB not only 
is tasked with cutting costs significantly, but also with 
maintaining access at the same time. So, I do not know how they 
can do that. And I do not know how central planning is going to 
be able to affect a fair reduction or program, especially 
without any input from anyone. I believe there is no input from 
physicians, there is no input from the Congress, they basically 
just give Congress a report and Congress can accept it or not. 
Currently, at least now, we have some input to our 
reimbursement via some certain committees of the AMA. That will 
go away with the IPAB.
    Mr. Kennett. Certainly, the environment we are in where 
there is uncertainty on Medicare reimbursement, seniors are 
going to have increasing difficulty getting access, you are 
exactly right. I think we all here could agree that the IPAB is 
not a good thing and it is really not a good thing and that the 
only people that they are going to cut between now and 2019 are 
providers.
    And, so, the good news is I think that the current 
congressional environment, it seems very unlikely you are going 
to get 15 people to approve by the Senate to be on the board, 
so, it is not going to be implemented.
    Mr. Smith. And I would argue that they are regulating and 
controlling prices for services in large--because they cannot 
get access.
    Chairman Coffman. Did anyone have any further comments?
    Well, thank you, all, for participating today. I ask 
unanimous consent that the following articles be admitted to 
the hearing record. A New York Times article dated March 25, 
2012, entitled ``More Doctors Giving Up Private Practices,'' a 
CNNMoney article dated July 11, 2012, entitled ``The Mind of a 
Solo Doctor,'' a Wall Street op-ed dated July 5, 2012, entitled 
``Obama Care's Lost Tribe: Doctors,'' a Forbes article dated 
July 2, 2012, entitled ``So Long Marcus Welby: Obama Care, 
Market Kill the Solo Private Practice.''
    Without objection, so ordered. I ask unanimous consent that 
members submit statements and supporting materials for the 
record. Without objection, so ordered.
    This hearing is now adjourned. Thank you very much for your 
testimony.
    [Whereupon, at 11:33 a.m., the Subcommittee was adjourned.]

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