Monday, July 02, 2007

More Physician Medicare Cuts Appear Inevitable

Remarkably, CMS wants to cut physician's reimbursements by as much as 10% in 2008.
According to the Congressional Budget Office, without congressional action Medicare physician payment rates will be reduced 10 percent in 2008. The 2007 Medicare Trustees report predicts total cuts of about 40 percent by 2016.
I continue to be amazed that most professions in America can usually expect at least a cost-of-living increase in salary to adjust for inflation, but physicians can virtually guarentee continued annual cuts in their salaries. Am I missing something? Consider these pearls about corporate CEO's:
It’s hard not to be cynical when the CEOs of America’s biggest companies received a collective 38 percent pay raise last year, boosting their salaries to $7.5 billion, according to a May issue of Forbes. That’s an average salary of $15.2 million apiece. Could any CEO be worth that much?

Certainly not, says Bill George, the former CEO of Medtronic for 10 years and a professor of management at Harvard Business School.
Cynicism rules indeed...

-Wes

Updated to reflect corporate salary increases.

3 comments:

Anonymous said...

"an average salary of $15.2 million apiece."

Mr. Alexis Terrell is mistaken. I guess deliberately so, rather than accidentally so. I doubt he can name any CEO whose salary reported by Forbes is anywhere close to $15 million.

Terrell is counting the value of exercised stock options as "salary". Stock options are certainly "compensation" but are not, in any sense, "salary". Stock options cost the corporation almost nothing. Investors in the market pony up that money when options are exercised - not the company.

Also, there is a federal law which greatly restricts any corporation's tax deduction for salaries paid in excess of $1 million. For this reason most companies with high-cost executives have reduced their salaries and made up the difference with stock grants and options. The question remains, is any executive worth their total compensation? But a surprisingly small share of that compensation is "salary".

Is this an important distinction? Maybe. Depends on whether you want to understand the truth, I guess. Mark Twain once pointed out that small words can make a big difference - for example, the difference between lightning and a lightning bug.

Have a great 4th

John Fembup

John Lennon said...

To JF:
"Compensation by any other name still smells as sweet".

"You say you want a revolution..."

Anonymous said...

Maybe you should look at adding additional profitable revenue sources to your practice. I would suggest you reconsider MTWA. This time though, check with your reimbursement dept. and make sure they bill the correct code. it's the on with the "only reimbursable when the spectral analytic method is used".