Turban vs. Terminator

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Arnold Schwartzenegger has a new opponent, and this time he’s battling a desi [Thanks Chick Pea!]. The governator’s latest adversary is the head of the the California Medical Association, Dr. Anmol Mahal.

The Fremont, Calif., gastroenterologist admired Schwarzenegger’s goals–coverage for all of the state’s 36 million residents and improving health care for kids. “It’s in some ways very visionary,” Mahal said later. But Mahal’s admiration soured when Schwarzenegger revealed that his plan would force doctors to give up 2 percent of their gross incomes to help fund coverage. “We are very discouraged and disappointed,” Mahal complained. “We had no warning.” [Link]

It is strange enough for me to see two of the highest profile Republican governors in the country pick up Hillary Clinton’s banner of universal healthcare, but stranger still for me to see a turbanned face (wearing a turban almost the same shade of blue that Manmohan Singh wears) staring back at me from the pages of the MSNBC article on the subject.

The racial aspect of this is striking because this is a plan designed, in part, to cover the health expenses of illegal aliens. This is a complete about face from former Republican Governor Pete Wilson’s strategy of demonizing illegal aliens. Having a desi doctor as the face of the opposition adds another twist, framing this as a debate between wealthy legal immigrants and poor illegal ones. That makes the politics more interesting, but also more complex.

The crux of the doctors’ disagreement with the plan is the way in which it will be funded:

… nearly 30 percent of the plan’s costs [will be covered] by levying a $3.5 billion “coverage dividend” on doctors’ (and hospitals’) gross revenues. “Why not tax teachers to provide money for better schools?” complains Dr. Samuel Fink, a Los Angeles internist. [Link]

Some medical practices would suffer more than others, doctors complain. Assessed on gross revenues rather than net income, the 2 percent fee hits doctors with high overheads harder, including oncologists, pediatricians and general practitioners–whose overhead costs may amount to 50 to 60 percent of their revenues. [Link]

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p>Here is how the costs break down across various economics groups:

… companies with 10 or more employees who do not provide health coverage be required to pay an “in-lieu fee” of 4 percent of their payroll. Hospitals would contribute a “coverage dividend” of 4 percent of gross revenues, while doctors would pay 2 percent of gross revenues. [Link]

The language of fees is important for two reasons. Firstly, the Governor doesn’t want to be seen as raising taxes:

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Schwarzenegger has steadfastly refused to call them taxes, but some of his own allies in the business and fiscal conservative communities say that’s exactly what they are…. some accuse the governor of being hypocritical, noting that Schwarzenegger criticized his Democratic opponent during the 2006 campaign for supporting a plan that would put billions of dollars in new costs on businesses to pay for health care [Link]

Secondly, there is a constitutional issue involved here:

The tax-vs.-fee debate is more than a question of semantics: It could decide the fate of the proposal. Tax increases require a two-thirds vote in the Legislature, while fees need only a majority. The larger threshold would give Republicans virtual veto power over critical pieces of the governor’s health plan. [Link]

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p>The CMA is girding their loins for a hard fight on these issues, hopeful that the administration will yield ground:

Negotiations have only just started. Dr. Mahal promises that the CMA will lobby hard to cut the provision that docs help pay for the plan. Schwarzenegger has signaled that almost everything is open for discussion–“I look forward to everyone having those debates,” he said on the day he unveiled his plan. [Link]

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One thing I’m sure of – Sacramento lobbyists will be as happy as pigs in $h1t for a while …

222 thoughts on “Turban vs. Terminator”

  1. as i stated on my blog: arnold is a complete and utter tool..

    so start charging lawyers so we can provide free counsel to folks who need it.. Samuel Fink is not far off… tax teachers for schools, tax policeman for protection… this is the tip of the iceberg..

    as i said… let’s tax HOLLYWOOD…come on arnold… you’ll be back, right? i swear my state has gone to hell in the 5 years i’ve been gone.

    when i get back, trust me, i’ll be fighting like mad..with the CMA and the indian medical association which is up in arms about it, as they should be..

  3. With respect to the tax v. fees debate, I recall in law school a U.S. Supreme Court case that held unless the levy is generally applicable, it’s a fee and not a tax. I don’t have the time to research it now, but do any other lawyer types remember this case?

    Second, while the bottom line in doctor’s incomes have taken a significant hit in the past 10-15 years, I still don’t know any doctors in the U.S., outside of residents or fellows, who are hurting for money. This is a progressive tax that I don’t necessarily have a problem with. The problem I have is that you are replacing one hedgemonic bureaucracy, the insurance industry, for another, the California government. On the one hand, I don’t trust the insurance industry. On the other hand, I don’t trust the government to implement a universal health care system efficiently and fairly. If there was going to be a major policy shift in the health care industry, I would be more interested in seeing more progessive regulation of the privately run industry.

  4. This may be an extremely naive question, but why is it that in the past few years I have heard about so many doctors complaining about high insurance costs and how expensive it has become to run a practice – yet every doctor I know in the Bay Area is living in a huge house with a fancy car? I’m trying to understand the point these doctors are making, but at the same time, how am I supposed to feel pity for them when all their kids are in private schools and they’re obviously pretty well off.

  6. this proposed event will drive doctors out of california, and will also affect medical students on what field they choose (most will stay out of primary care, since those are the lower end of the pay spectrum)

    and as for fancy cars and rich doctors sonia–that is a minority… trust me.. and i’m sure you’re talking about doctors who are brown (our society albeit loves to keep up with the jones, no matter if you are doctor or not)..

    it’s not pity it’s principle..

    how would you like to be taxed for your website to provide free weddings for everyone? (stupid comparison, but you get the gist)…

    and yes, the overhead and insurance is sky high, esp for obstetricians and neurosurgeons… the average malpractice insurance for these specialties run into the hundrends of thousands of dollars per year…that is why a few years ago, a lot of ob/gyn and other sub specialties, closed their doors.. i think it hit pennsylvania the hardest..

    this interview with sanjay gupta:

    Let’s take a look at some of the neurosurgery malpractice premiums around the country, $267,000 a year to be able to practice neurosurgery in Pennsylvania. That’s for malpractice alone. That’s how much it costs. Michigan, where I was practicing before, $120,000, and Georgia, about 70,000. So definitely, a significant problem around the country.
  7. how would you like to be taxed for your website to provide free weddings for everyone?

    I thought the doctors were in favor of universal health care, they just didn’t want to be paying taxes narrowly on themselves to pay for it.

    As for malpractice, there is some evidence that if medical associations were better at policing doctors who were involved in malpractice, rates would go down.

  8. universal health care has it’s own issues… but we were for it until arnold sprung up this tax for us to help pay for it.. that caught the docs who were supporting the bill off guard..

    malpractice rates vary from state to state…

  9. I agree with Sriram that most physicians aren’t “hurting” for cash. Though I admit I should probably research this more before posting, I’m not a huge fan of a “gross income” tax . Off the top of my head, I think it would disproportionately hurt certain specialists like OBGYNs, who pay exhorbitant med-mal rates. I also find it interesting that he would choose to hit essentially small business owners, rather than tax corporations (especially the Healthcare industry) during a time of high growth. Finally, if Medicare/Medicaid is examplary of how this new universal healthcare system will be set up, lets just say that we will be debating the administrative pitfalls of this programs for years to come.

  10. I guess I’m not really looking at this situation from just this ‘tax on doctors’ perspective. I just looked at tax stuff last night and it just pisses me off the way it all works. 15% tax if you make $8,000 a year and 35% if you make a million? I think I’m just annoyed.

  11. Ms. Pea, unfortunately I have to disagree with your opposition to the plan. Feasibility and viability are key to legislative change and this is a political sea-change- a Republican bringing something to the table other than empty hands. It’s time to grab it and plan for later amendments (once passed) to the imperfect, yet politically necessary, legislation. Of course, I’m informing myself from the process of politics and I gather you are speaking from a different set of interests.

    In fact, quite prominent progressives and social democrats are more or less in favor- Brad Delong, Paul Krugman, Ezra Klein– that I’ve read so far. Nary a mention to the 2% skimming off doctors, let alone opposition.

  12. this proposed event will drive doctors out of california, and will also affect medical students on what field they choose (most will stay out of primary care, since those are the lower end of the pay spectrum)

    This seems like a worst-case scenario to me. While general income level might decrease, there are still good reasons to become a doctor. Personal satisfaction, relative job-stability (correct me if I’m wrong, but I would think the unemployment rate of M.D.’s is far lower than the general unemployment rate), and the status of doctors in general society. I agree that the principles of the tax might be a bit specious. Even if the tax, and the universal plan for that matter, get implemented, I just don’t see it leading to a collapse in California’s medical system.

    How do countries like Canada pay for universal health care? Is it part of the general tax?

  13. i’m not a big proponent for universal health care.. take a look at canada and the uk, the quality of care, and the length of time you must wait to get anything done is preposterous…and these are first hand experiences with family members..i’ve worked at county hospital in this country, and everyone does get healthcare when they show up… (you know, these hospital are some of the best, rather than the beverly hills based cedars sinai, which i would never be treated at)..

    this also chaps my hide: The plan, which would cover illegal aliens, would also increase spending on preventive medicine and require insurers to offer coverage to everyone and to pump at least 85 percent of premiums into patient care…

    i can bet a few beans that the number of ilegal aliens would increase as well for the state.. awesome. simply brilliant.

  14. Sriram,

    Employer-based health care, which Germany and Japan’s universal systems rely on, is a poor choice. There’s no compelling fiscal or policy reason to use it, and employer’s, frankly, should not be in charge of their worker’s health care. It’s just a silly way of organizing it. Canada’s system is too biased against the private sector; some degree of private, supplementary insurance should be allowed. We do not live in an equal society and we’ve never had a problem with allowing the richest to benefit from their funds. But if Canada’s problem is that they have a ceiling, our problem is that we don’t have a floor. Liberals shouldn’t construct a system that stops Americans from getting ever-better health care, but we need one that guarantees a certain level of care. In essence, we want a floor without a ceiling. France and Britain are more interesting, Britain for their enormous cost control and France for the fact that their health care is really very good. But Britain’s frugalness has a price — care simply isn’t as good, surgeries are underused, medicines under-prescribed, and so forth. While they still have better outcomes than we do, it’s only because so many of our citizens are totally without access to health care. If you had to decide where to be treated, you definitely want it to be here. France is more my speed. Government provided, ceiling without floor, etc. The lack of a gatekeeper leads to overuse (i.e, the French go to the doctor’s too often), but that’s changing their, and it could easily be side-stepped here. What a shame, then, that France is so off-limits in political dialogue. But whether or not we can invoke the French, they’re the closest thing to a model structure out there, and we should study them for ideas. [link]
  16. are still good reasons to become a doctor. Personal satisfaction, relative job-stability

    obviously there are amazing reasons to become a doctor…but in reality, most people will shy away from primary care.. it’s just makes more sense.. a lot of folks have hundreds of thousands of dollars in college/med school loans that they must pay off… and a primary care docs salary won’t cut it, esp after taxation…

    i just had lunch with a friend who is finishing up her training in cali, and is considering moving out if this bill passes.. she is dead serious.. and i can understand where she is coming from..

    as for canada and how they pay for it? here is a great article from wiki

    Currently in Ontario, people who earn salaries above CN$20,000 must pay an annual health care premium ranging from $300-$900. Funding for medicare in Ontario also comes in part from a dedicated Employer Health Tax (EHT) that ranges from 0.98%-1.95% of employer payroll. Eligible employers are exempted from EHT on the first $400,000 of payroll. British Columbia, Quebec, and Alberta charge similar premiums. Alberta charges $44 a month or $88 per family, though as Alberta approaches debt-free status, there has been talk of removing them.
    Each province in Canada manages its own healthcare system. For example, each province issues its own healthcare identification cards and negotiates with the federal government for money to cover healthcare costs. Each province also provides its own prescription drug benefit plan, available to every Canadian regardless of income level. The prescription drug benefit is, however, adjusted for income, with a higher co-payment required for those with higher personal incomes. The prescription drug benefit is very comprehensive and rarely excludes a medication. Where a medication is excluded that is needed by a patient, the patient applies for coverage under the plan for that drug using a Section 8 form. Dental care is not covered by any government insurance plans. Canadians rely on their employers, individual private insurance, or simply pay cash themselves for dental treatments.
  17. I guess I’m not really looking at this situation from just this ‘tax on doctors’ perspective. I just looked at tax stuff last night and it just pisses me off the way it all works. 15% tax if you make $8,000 a year and 35% if you make a million? I think I’m just annoyed.

    then dear, you’ll be really pissed to learn that those who make the million charge off their mobility costs, partial residential costs, communication costs, charity as pre-tax expenses.

    jobs are for tools. kick the man.

  19. Chick Pea: Would you rather the illegal aliens suffer without medical care so that doctors can be richer by 2% of their income?

    of course. i want my bentley. doesn’t every doctor? (and if you don’t think that is an ultra facetious remark, then you truly don’t get me) i say, we should all pay for it, not just the doctors. why are we the only profession taxed?

  20. i say, we should all pay for it, not just the doctors. why are we the only profession taxed?

    I dont think they tax doctors to fund legal aid (which btw are funded by the lawyers in private practice as all the interest accrued on client accounts goes to finance legal aid)

  21. I dont think they tax doctors to fund legal aid (which btw are funded by the lawyers in private practice as all the interest accrued on client accounts goes to finance legal aid)

    i didn’t know that, thanks for the insight.

  25. I dont think they tax doctors to fund legal aid (which btw are funded by the lawyers in private practice as all the interest accrued on client accounts goes to finance legal aid)

    This goes directly to my first comment (#3). Yes, lawyers fund legal aid, but you can hardly say that low income individuals are afforded adequate access to the courts via programs such as legal aid. Likewise, whether or not a tax is levied on doctors or everyone as a whole to fund universal health care, I don’t think it will be properly implemented to give access to those who are denied adequate access under the current system.

  28. this bill will personally affect me. it will affect a lot of friends that i know through school. would i have accepted it without the 2%? likely yes, but i still don’t know if it is the answer to everything. there are a lot of unknowns. healthcare in california is really pretty crappy right now… even on the job hunt trail this year, tons of people tried to dissuade me from going back… even my own folks..

  29. “Why not tax teachers to provide money for better schools?” complains Dr. Samuel Fink, a Los Angeles internist.

    Umm, because, teachers make $30K a year while doctors make $300K.

    of course. i want my bentley. doesn’t every doctor?

    If a 2% salary cut will kill your bentley plans, then you probably shouldnt be buying one anyway.

  31. how would you like to be taxed for your website to provide free weddings for everyone?

    hell, if I could make enough money on just running the site, I’d pay my 2%. It would be better than working 10+ hours at a “day” job and then working on the site at night =)

  33. Arnold S. is an advocate? lol. One thing you can be sure of. It would be the $25,000-100,000 p.a.middle classes who would pay the most dearly for everybody, and it is possible that doctors are now edging down toward the “middle” area, what with all those malpractice suits. My friend already pays a quarter of annual salary to insurance, and she only makes 35,000. The rich don’t even need insurance, and Congresspeople get theirs paid for as part of whatever it is they do.

  34. Doctors in the US make way too much money in the US anyways. Health, like police and fire services, should be a government service. Taxing away their excess profits like this is a roundabout way of achieving this.

  35. (wearing a turban almost the same shade of blue that Manmohan Singh wears)

    I like black and white best personally. Although I have seen leopard-skin print turbans on Southall Broadway once or twice.

  36. would i have accepted it without the 2%? likely yes,

    The CMA should be lobbying state Democrats then. I wonder where the siphon is pointed to next if the CMA can scrap the 2% in negotiation with Arnie?

  38. Under Mr. Schwarzenegger’s proposal, Medi-Cal would be extended to adults who earn as much as 100 percent above the federal poverty line and to children, regardless of their immigration status, living in homes where the family income is as much as 300 percent above that line, about $60,000 a year for a family of four. Medi-Cal is currently limited to adults with children, and children with documented residency are covered if their family’s income is up to 250 percent above of the poverty line. [link]

    I just did some crude maths and 2% of, say, a take-home revenue of $90,000 is $1,800. Doctor’s be damned! Pass this SOB! Besides, if Dem’s don’t get on board, the GOP will have an enviable talking point that they proposed a half decent bill and the Dems stonewalled it. And that’s just bad politics heading into ’08. Especially as health care climbs up the important issue ladder. Ms. Pea, I’ll personally give you $1,800 if it means your support and you working the phones to get your CA doctor friends on board =)

  39. Chick Pea, I never wanted to reveal my career on this site (now you’ll all wonder how I get time to comment here so much)…but this stupid 2% idea is horrible. I agree with your comments 100%. Thanks for representing.

  40. There are far too many problems with Governor Schwartzenegger’s plan. As I think about it, this will only exacerbate the problems for those that he is allegedly trying to support.

    If he does levy a tax on gross receipts on doctors and hospitals, that will serve as a serious disincentive for doctors and hospitals to operate in California. The result will be that they will move their operations to other states.

    At the same time, the availability of free health-care for illegal immigrants will create an incentive for greater immigration to California from both Mexico and other states.

    The result will be a decrease in the supply of quality health-care and an increase in the demand for health-care. Who will be hardest hit by such a scenario? Of course, those who are unable to take the time or expense to cross state borders for affordable health-care–the poor.

  41. I just did some crude maths and 2% of, say, a take-home revenue of $90,000 is $1,800.

    -chuckle- the proposition is 2% of gross income yaar. the take home pay will be affeted by less than $1,800.

    the doctors may have their kachchas in knots because 2% of 500,000 from a clinic is $10K gone to taxes… $10K that could have gone towards a new vehicle, new computers, new equipment, the sexy receptionist etc. besides, to fight against taxes is a fundamental right 🙂

  42. Doctors in the US make way too much money in the US anyways. Health, like police and fire services, should be a government service.

    Hmm, unfortunately, med school is a bit more time and money consuming than police and fire school =)

  43. Doctors in the US make way too much money in the US anyways. Health, like police and fire services, should be a government service.

    i think his comment implied that it should be available to all – and not really a matter of who bids highest or expects most for your services – which is ultimately what drives costs up in the US (a mix of deep pockets, expectations for head transplants and killer litigation).

    for my next project i will solve global hunger by lunchtime.

  44. At the same time, the availability of free health-care for illegal immigrants will create an incentive for greater immigration to California from both Mexico and other states.

    i stated this problem before. people will flock from other states, whether it be texas, or florida.. free healthcare will be the new incentive..

  45. -chuckle- the proposition is 2% of gross income yaar. the take home pay will be affeted by less than $1,800.

    Yah, I just noticed that. My maths have always been falthoo. Nonetheless, gross-this, net-that, two-percent, poo-percent, it’s not enough to sink the whole ship. Republican interests have stonewalled this debate for so long and Democrat interests have been so divergent in what they want, that it’s worth it. Some Dems want the whole enchilada a la France, some want the chimichanga like England and some want the taco auf Germany. Bas! The political climate is ripe. This is chimi and changa. Let’s grub and grab it.

  46. Chick Pea, I never wanted to reveal my career on this site (now you’ll all wonder how I get time to comment here so much)…but this stupid 2% idea is horrible. I agree with your comments 100%. Thanks for representing.

    thanks for coming ‘out’.. i’ll likely become mashed into hummus before this is all over.

  47. Hmm, unfortunately, med school is a bit more time and money consuming than police and fire school =)

    amen to that.. some cardiothoracic surgeons train 12-13 yrs AFTER medical school. and being someone’s b*tch for that long is taxing. and no, it’s not like grey’s (blech) anatomy…

  48. thanks for coming ‘out’.. i’ll likely become mashed into hummus before this is all over.

    This is what makes it difficult to talk about these issues on a forum like this…the physician’s POV will always be attacked as greedy and heartless. But if subsidising healthcare is a goal, then it’s SOCIETY’S responsibility, not in any way disproportionately physicians’ responsibility.

  49. Yes… it’s pretty rich to hear lawyers taking the high road…

    Basically fees are just taxes that muncipal and state governments can more easily pass. Does this bill make any attempts at parity taking into account a physician’s speciality/malpractice premiums/service to underserved areas?

  50. But if subsidising healthcare is a goal, then it’s SOCIETY’S responsibility,

    indeed. which is why you all should be cycling to work and eating green leafy vegetables and a teaspoon of flax seed oil for regularity and stop trying to live forever.

    cardiothoracic surgeons will suck blood out of your veins if they can and they do. dont let them. only you can stop this madness now. call now. if you dont do it, who will. – pan to image of sad looking curly sue sucking thumb and holding hand of pregnant woman in flower print dress – aawww. kill. kill.