No Good Rx

Picture this scenario. A critical industry, with high barriers to entry, under extreme pricing pressure, decides to stop accepting certain low-margin customers.

Must be electronics assembly, right? Think again.

The medical profession is encountering many of the same problems as we in electronics experience everyday. As noted in The Huntsville (Ala.) Times, doctors are refusing to see new Medicare patients because, the story says, “[doctors] are fed up with the program’s payment formula. According to the report, the government-funded Medicare program is scheduled to cut physician payments by 9.9% in 2008.

It goes on to quote the local medical society president, who asks, “Why would you accept a payment plan that every year threatens to cut you three to 10%? … We want to take care of our patients, but we’re also running small businesses and have to be able to pay our employees.”

Sound familiar?

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About Mike

Mike Buetow is president of the Printed Circuit Engineering Association ( He previously was editor-in-chief of Circuits Assembly magazine, the leading publication for electronics manufacturing, and PCD&F, the leading publication for printed circuit design and fabrication. He spent 21 years as vice president and editorial director of UP Media Group, for which he oversaw all editorial and production aspects. He has more than 30 years' experience in the electronics industry, including six years at IPC, an electronics trade association, at which he was a technical projects manager and communications director. He has also held editorial positions at SMT Magazine, community newspapers and in book publishing. He is a graduate of the University of Illinois. Follow Mike on Twitter: @mikebuetow

2 thoughts on “No Good Rx

  1. This certainly is big news. The cut may actually occur this October instead of next year. This is an even bigger deal because many insurance companies set their reimbursement rates on Medicare’s. The result will be an across-the-board decrease in medical compensation. The politicians may be thinking that, if health care is so expensive, they can fix the problem by forcing the medical system to work on less money.

    But physicians are already closing offices and leaving the profession due to low pay. Yes, it may be hard for the average guy to believe, but many doctors are underpaid. Even the poorest doctors have a decent lifestyle after taxes and malpractice insurance premiums are paid, but the profits are, for many, not worth the decades of training and 100-hour-plus work weeks. Few doctors can afford to retire early.

    But overall, I welcome this cut. The less government subsidizing that goes on, the more true economics can kick in and capitalistic forces can straighten things out. Health care needs to be seen as more of a personal responsibility that a “right” that the government is obliged to provide us. I find it odd that many people don’t hesitate to pay large clumps of money when taking the car to the garage or a pet to the vet. They may not like it, but see it as part of the expense of owning the car or pet. But when they go in for an annual exam, they throw a fit at the $200 bill (assuming no insurance coverage). Quite odd, I think.

  2. Mike,

    The medical profession has been the target for fee cutting for a number of years. This is not the first time physicians have needed to make choices in patient care based on compensation. HMO’s and traditional insurance providers regularly decide the monetary compensation for care, regardless of the physicians decision of the best treatment plan.

    Many physicians limit their insurance acceptance to those carriers that provide suitable independence in treatment options or are at least willing to negotiate care (and compensation) based on individual needs.

    Here in New Jersey, legislators are finding ways to increase the state revenue by tacking on more and more fees to physicians to fill the state coffers.

    Rising costs and the pressure from our customers and prospects to keep their costs down are forcing many small business owners to rethink the way they package services and products. The return on our time investment in the sales cycle to acquire a new customer, and at times the cost of retaining existing customers, can make or break a business relationship . . . and a small business.

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