According to a recent study published in the Journal of the Association of American Medical Colleges, a primary care physician who graduates with education debt of $160,000 should be able to raise a family, live in an expensive urban area, and repay their debt in 10 years without incurring additional debt, as long as their household income and spending are consistent with median statistics. However, the ability to meet education debt repayment obligations as a primary care physician becomes significantly more difficult when the education debt is $200,000 or more. According to the study, of 2011 medical school graduates, 59% had education debt of $150,000 or more at graduation, 33% had more than $200,000, 15% had more than $250,000, and 5% had more than $300,000.

By national standards, physicians – even primary care physicians — have a pretty good earning capability. However, the financial, emotional and physician investment required to earn a medical degree and complete training is daunting – particularly when coupled with the fact that most physicians cannot begin saving for retirement in a meaningful way until their early to mid-thirties. With the emphasis placed on primary care under the federal Affordable Care Act, what will the federal government need to do to entice the best and the brightest to go into primary care? 

Among its many provisions, the newly signed Patient Protection and Affordable Care Act has imposed a new requirement on physicians who rely on the Stark "In-Office Ancillary Services" exception.  Physicians who refer patients for CT, MRI or PET (or other Stark services as designated by the Secretary of HHS) that will be provided by the referring physician’s practice under the Stark In-Office Ancillary Services exception must now inform the patient in writing at the time of the referral that the individual may obtain the services for which the individual is being referred from a person other than the referring physician’s practice, and provide the patient with a written list of suppliers (who furnish such services in the area in which such individual resides.

The provision in the new law has an effective date of January 1, 2010, so absent clarification from Congress or HHS, the above requirement is effective immediately. 



On November 24, 2009, the U.S. House of Representatives passed the Medicare Physician Payment Reform Act" (H.R. 3961) which would repeal the scheduled 21% fee reduction scheduled for January 2010.  The legislation would also permanently replace the existing Sustainable Growth Rate (SGR) formula with a new formula that, according to the House summary:

  • Removes items such as drugs and laboratory services not paid directly to practitioners from spending targets;
  • Allows spending on most services to grow at the rate of GDP plus 1 percentage point per year (compared to GDP without any adjustment today);
  • Allows spending on primary and preventive care services to grow at GDP plus 2 percent per year; and
  • Encourages coordinated, innovative care by allowing Accountable Care Organizations to be responsible for their own growth paths, irrespective of reductions or increases that apply elsewhere in the system.

The bill is now on the Senate calendar for consideration.

The original Stark II regulations included an 18 month moratorium on an exception to Stark that would have permitted physician to invest in specialty hospitals. Since expiration of that moratorium some physicians seeking more control over their practice environments have embarked on a mission to develop specialty hospitals as an alternative to the traditional acute care hospital setting.  However, hospital groups and certain legislators have also (unsuccessfully so far) attempted to ban physician ownership in these hospitals permanently. 

Efforts to ban physician ownership in these hospitals continue and in fact, if passed, the health care reform bill proposed by the Senate Finance Chairman, Max Baucus, would effectively prohibit physician ownership of specialty hospitals unless those hospitals had a Medicare Provider Agreement in place on November 1, 2009. This means that physicians who have invested money in hospitals that are under development could expect to lose their entire investment.

Support for Mr. Baucus’s ban on physician ownership in hospitals would appear, however, to not be unanimous in the Senate, according to a September 15, 2009 letter from Senator Diane Feinstein to Mr. Baucus.  In that letter, Ms. Feinstein states that “as the federal government continues to spend hundred of billions of dollars in federal funds to create jobs and stimulate the economy, it is nonsensical to approve legislation that will force ongoing construction on desperately needed projects to come to a halt.” Ms. Feinstein concludes her letter by requesting that Mr. Baucus consider changes to his proposed legislation that will allow facilities currently under construction to be brought to completion.

Physicians concerned about these developments should contact their representatives and professional societies.