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 …
I wouldn’t necessarily say those of us commenting are taking the high road. If the post was about a 2% tax on lawyers to ensure legal representation for those in dire circumstances, I would be making the exact same arguments. Likewise, many of the factoids that chick pea cites with respect to doctors are the same for lawyers. If you are working for a corporate big money law firm, yes you are rolling in dough. Those of us that chose not to go down that route still have trouble meeting paying back school loans, just like medical residents. As with doctors, I don’t know of any lawyers that are in the poor house. Those who are living on $35k a year have chosen that lifestyle, just as those doctors who go into primary care.
Those who are living on $35k a year have chosen that lifestyle, just as those doctors who go into primary care.
Lets cut the bull shit on primary care providers. Even the lamest primary care provider nets more around 80-90k in profits. Of course the primary care provider is not making as much as the surgeon etc. but they still make way way more than a lawyer who works for legal aid ($32 to $42 depending upon the geographical location) or a civil rights organization.
Why should they be?? As for legal aid, we have a patchwork approach in this country…public interest firms, big money firms doing pro-bono work, and taxes pay the salaries of public defenders. Individual attorneys don’t fund legal aid.
And?? How much should they be making after 7-10 years of training. Three of my best friends never finished college but are making six figues in software development and other IT fields. We should all be paying for universal healthcare proportionate to our income..that’s the best way to soak rich doctors.
agree wholeheartedly.
More paying patients means more money for doctors and hospitals, right? We’re reducing the costs to hospitals of having uninsured patients, therefore their revenue should increase. If that’s so, what’s wrong with levying a fee on them in return?
The governors office actually claims that these measures are revenue neutral for doctors and hospitals. I don’t believe that, but I think they will have less of an impact than the medical establishment currently claims.
are pharmaceutical companies included in this taxation scheme? and won’t doctors/hospitals just increase their fees to cover the tax, thus passing the burden onto their patients?
Ms. Garbanzo bean, I’m with you on this one all the way.
Seems like the same arguments get re-hased time to time, but ‘universal healthcare’ for a diverse and large nation like the United States isn’t all that feasible.
The idea that US taxpayers will be subsidizing illegal aliens isn’t all that appealing to me. All immigrants to this country need to be brought into the economic loop, above the table, so responsibility is shared appropriately.
California has financial issues as it is. Universal healthcare won’t be coming around here anytime soon. Gotta find the money to pay for it first, especially with the State’s other million competing needs. If anything, a system in Cali will probably be half ass, underfunded (like other things) – a total shit sandwich.
A better start for Universal healthcare would be something on a far smaller scale (City, village, township) level, where property tax (or some minor resident tax) helps cover preventative and primary care needs for a smaller group of people. Better funding for a school’s nurses office, maybe a physican can come in time to time for shorter hours for said kids. Something along those lines. North Dakota or a similar state with a small and homogenous population would be a better candidate than California. Frankly, California is the worst candidate to implement at universal health care system.
So why are states with strong Republican pro-business governors proposing this?
Great discussion. Chick Pea, I am with you. Let me try to give a broader overview as to why this 2% tax is idiotic:
Let’s say an oncologist’s gross revenues for the year are $1,000,000. Two percent of that is $20,000. From the million, deduct overhead costs (running an office, malpractice insurance, employing staff, etc.). Also, keep in mind that DOCTORS OFTEN PAY FOR THEIR OWN MEDICINES UPFRONT. So now you may be down to $200-300K. The two percent tax would take $20,000 off of that. If you were making $300K before, you are now making $280K. (And this is a pretty picture, assuming that everything has been collected.)
Fine. That is still a lot of money. But, like others have stated, you’re diminishing incentives for doctors to stay in California:
*Doctors are already harangued with an incessant amount of bureaucratic busywork, such as dealing with HMOs simply trying to get paid for their work. This takes time away from dealing with patients, frustrates doctors and often forces them to lose focus.
*On top of this, malpractice insurance is extremely expensive, and it’s no joke that you’re dealing with a very litigation-happy populace (read Atul Gawande’s book for more).
*On top of all this, you want to deduct thousands of dollars from a doctor’s paycheck?
I AGREE, doctors usually make a lot of money. But when you take all of the above into account, the true fact is that being a doctor nowadays can be VERY DEMORALIZING. People have this image in their head that doctors just go to work, treat people, and get paid shitloads of money. No – there is so much paperwork, busywork, arguing with the insurance companies, dealing with testy patients, dealing with malpractice carriers, and now a significant tax?
The point is this: why would anyone want to become a doctor when you can go into another field (such as law, banking, etc.) which doesn’t have the same sorts of hassles?
It’s really easy and simplistic to just throw up your hands and say, “Well, who cares, they already make a lot of money.” I know this sounds obnoxious if you are a starving writer or artist type, but come on, you knew what you were getting into when you got into it. We all make choices which affect our income, and public policy shouldn’t be driven by our bitterness.
Especially considering that law and banking pay just as well as some medical specialities, it’s a slap in the face to doctors.
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Who said just because they were Republican means they had the right idea? The answer to me is politics. Take something the Democrats campaign on, make a good effort, it will fall through at some point, and they fought the good fight.
Call me a cynic, but I don’t think these efforts are genuine. The capital (money, time, and talent) needed to pull something like this off well is tremendous. Like I said, for an experiment, its better to start off on a far far smaller scale.
miss shalini and mister guju dude: thank you.
Individual attorneys don’t fund legal aid.
You are wrong. They do fund legal aid though they are not the sole funders.
It’s Nixon in China, it’s more credible coming from a Republican since it’s not part of their ideological disposition and he runs a chance of alienating traditional supporters. My understanding is that there is a fair amount of business support for this, or at least enough to give him (and have given Romney) cover.
As far as illegal aliens using universal healthcare, upon their arrival at a hospital or clinic the authorities should be alerted and they should be deported to their point of origin. After they are cleared of any condition that immediately threatens their lives of course. And the bill should go to their government.
Gazsi
I’m not saying there isn’t support for such an idea. But something as big as Universal healthcare needs critical mass. I don’t see it yet. Now, I’m some genius comes up with a system where you can cut the cake and eat it to, I’m all for it. I’m just saying that in an attempt to cover everybody, quality does take a hit.
And coming from someone who does QA work, quality over quantity argument rages every where in every field. That’s why, in order to preserve quality, one needs to scale back the grand plan and start from the ground up. Not top down.
Instead of dicking around with capital intesive plans like these, maybe Cali can throw more money where it’s needed. In education and making sure school children get the right nutrition. We already have a ‘universal’ education program, and it is failing miserably.
Now, IF some genius comes…
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blockquote>People have this image in their head that doctors just go to work, treat people, and get paid shitloads of money. No – there is so much paperwork, busywork, arguing with the insurance companies, dealing with testy patients, dealing with malpractice carriers
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I don’t necessarily disagree with your argument save this one point. Pretty much every profession contains hassles that are analagous to those you listed.
How would you identify illegal aliens? Anybody who isn’t carrying their passport at the time? Hey Dad, carry a passport with you when you go out for a walk, just in case you get hit by a car, I don’t want you to get “deported” to India.
Heard the following argument on NPR this morning – reason for high medical cost in the US 1) Cost of living is high in the US, hence higher costs 2) Compared to other fields/industries where prices are determined by the supply/demand curve, in the medical industry the supply side of equation drives the prices. Physicians and hospitals determine what tests, procedures & prices. The patient i.e the demand side of the equation has no say in this.
all professions have headaches and unnecessary bullshit that blinds them from the real end goal…
gaszi
um yeah. sure. hospitals can never turn people away. sometimes i want to deport legal residents. where would we send them?
Another opinion (they’re like assholes, everyone has one)
It is perceived that doctors earn disproportionately more than the work they’re asked to do. For the reasons chick pea and shalini have stated, a relative of mine decided to work for Kaiser Permanente for significantly less money than he would in a private practice (Nephrologist) because under Kaiser’s umbrella, the overhead/stress is less.
kaiser is the anti-christ to doctors in california. agreed: less headache, i was considering a job there.. but would not out of principle.
Well, I am willing to pay 2% extra tax, if they make a regulation to keep all non-engg/non-IS/non-compsci grads from becoming programmers. All these ‘its so easy’ guys are eating my paycheck.
Oh, did you know the immigrants pay some kind of immigration fees, that is suppposedly collected to ‘train Americans workforce, to upgrade their skills?’ That runs in billions per year.
I guess all of us are getting shafted one way or other, arent we?
I haven’t detected any “anger” on this thread towards doctors, whether it’s Ms. Pea or any other M.D. (though, anyone who got angry at our garbanzo should have his/her head examined). I’m just trying to understand why a group of professionals, whose average income is 90K a year, which is well above the national average, is in such an uproar when it comes to a program that many of them endorse.
Only on SepiaMutiny could a debate about the persecution of doctors and their tax bill become so heated.
A tax on doctors for univeral health insurance, WHAT? Why not allow the market to establish a more affordable access to healthcare? This is something I have heard hubster discuss at length: The American Medical Association approves medical schools. The American Medical Association places very strict requirements on medical schools and limits the number of new medical schools that can be opened. This limits the number of doctors in the medical profession, increasing the price of doctors. It also decreases the amount of medical services provided to society. Although these doctors as a group may be “better qualified” than the prospective doctors who are not admitted to medical school, such restrictions (which have not been proven to be related to the quality of doctors) preclude the existence of low-cost doctors for routine medical services or for people who cannot afford expensive doctors. If more medical schools are allowed to open, the same medical licensing standards (i.e, Step 1 and Step 2 tests) can exist but there will be more doctors and a lower price for medical services but there will be more doctors and a lower price for medical services. Good doctors will still get paid a lot of money, but “mediocre” doctors will be available to provide low-cost care.
It’ll be like the legal services market.
very kind sriram..
because we were not aware of the 2% tax during our endorsement..this was ‘sprung upon us’ when arnie unveiled his ‘great master plan’ to the public… i’m not sure we would’ve endorsed it if we had known this fact beforehand…
sure consent us on things, and show us the ENTIRE plan.. don’t go onto removing the right arm when we went in thinking you were removing our right knee.
thank you.
What makes me crack up is that this very dry post about health policy has three times as many comments as my other post this morning about S-E-X.
Y’all need to have your priorities re-examined 😛
Are you refering to bar dues? Pro-bono work requirements in some states? I should have been more precise…Individual lawyers arent required to contribute a percent of their gross income to fund universal legal aid.
Bust out classic rock post and you will see some real action 🙂
The only thing I am scared of, If all ‘real’ doctors leave Cali, then probably I will have to go a plastic surgeon for Primary care 🙁
Well , the waiting room will be more fun at least 😀
actually i’m proud that people are taking interest/sharing insight/opinions on this subject… (god, i’m sounding like an auntie)
plastic surgeons will be the first to runaway..
National average may be 90K. But how far does that money take you in say, the San Fran Bay area vs. Sacramento? Or New York city vs Rochester or Buffalo? Throw in college loans amounting to a small house payment (Med school and undergrad), the picture turns a little less rosey. Plus it is about the motivation. You grind through years of schooling, only to hear society tell you that your profession is priviledged and you don’t deserve the cash you make.
Chick Pea – I’ve heard the arguments about Kaiser, frankly, I don’t know much to say either way. That was the justification my relative used to go to Kaiser in Sacramento (the area being less expensive than San Fran bay area, too). Personally, I’ve had Kaiser for 3 years in S.Cal and I don’t have any complaints. Doctors, nurses, and any extra check ups I’ve needed were immediately addressed. But like I said, I don’t know much more that the superficial stuff.
Anyone who thinks doctor make too much, take a look at the fing I bankers. Doctors in our soceity go to hell and back to get an education, and they are still one of the few professions where you need to have solid values day in and day out to do the job. Its a pure fiction that they live pie in the sky. Doctors are almost always middle class kids who work their ass off. And now, in order to fix what society should be doing together, once again, shunt it off to a specific segment of society
I-bankers work their tails off!
Take a deep breath, folks. This discussion is not about what profession is easier/harder, what profession requires more schooling, or whether doctors have it good or bad. This discussion is about the proposal for universal health care in Cali and the CMA’s reaction to it.
I am not a doctor and I am against this 2% exclusive tax on doctors. Universal health care needs Universal funds. Howzz that for a slogan.
I’m from Massachusetts where the local government has approved a universal health care type approach toward healthcare in this state. Here, the state will charge a $295 per head fee to employers that will not provide health insurance to their employees. I’m sure you can imagine how crazy the Business Associations went here, saying it was not their responsibility. It still passed, because premiums have become ridiculous. The point is, the cost is going to have to shift somewhere. Generally, we the taxpayers bear the onus of the cost when emergency care moves from the docs office to the emergency room.
I agree that medicine is probably not as lucrative as it was before, but still there is a certain job security in it that is undeniable. The viewpoints here are especially interesting since we all, at some point in our youth, were probably encouraged to be doctors. Perhaps the expectations are different for folks getting into colleges these days (with more options and a greater understanding of what it means to be a doctor)?
To Sriram’s point about doctor’s not hurting for money…this is true, but the burden should be shared among all overpaid capitalist pigs (sarcasm intended) and not just doctors.
On the other hand, it’s not clear how much doctors will benefit from universal health coverage. Clearly, this will increase the demand for their services and given the rather fixed supply of doctors, their compensation is likely to rise. If that’s the case, this tax is no different than raising property taxes near homes where you’re going to build a subway stop to pay for the stop (the homeowners still come out ahead because the subway stop raises their property values by far more than the tax).
That said, I do think doctors inflate their compensation through monopolistic practices. They severely limit the number of new doctors each year, creating supply/demand imbalances which raise their pay. There are literally thousands of people rejected from med school each year who are 99% as qualified as people who were accepted.
The kooky med school/residency system makes professions like dermatology one of the highest paid. Not for a good reason, like it’s brain surgery and requires a genius, but because of a huge, artificially created supply/demand imbalance.
Doctors spend half their life (college, residency) making next to nothing. Do you even know what the cost of going to medical school is? Why should they give up 2% of their salary to fund some pompous ass’ grandiose ambitions?
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.
Nobody addressed this point (I think), so I thought I would. A fee is a tax if it is generally applied to everyone, and if there appears to be no nexus between the reason for collecting the “fee”, and the benefits incurred from collecting it. In that sense, the 2% levy on physicians would appear to be more of a fee than a tax.
Of course, this is mostly semantics. The legislature will treat the fee like a tax, while labeling it a fee. And the physicians will pay the fee like a tax, while complaining that it’s a tax, not a fee.
I think the CMA has a legitimate complaint…not so much because I think it will affect the quality of certain types of care (which has, IMO, become a rather convenient strawman for the medical industry), but because other professionals are not required to subsidize services to indigents in the same manner.
Personally, I think the ideal solution would be to levy the fee/tax on the malpractice insurance providers. That way, everyone is happy…the doctors, the lawyers and the legislature. The insurance industry won’t be happy, but they can just suck it up!
It’s not just doctors in California that are going to be taking a hit, from the Cato@Liberty:
So, don’t worry–it won’t be just the doctors that will be making less money. If you live in the U.S. you’ll be footing the health-care bill for the illegal immigrants in California. Maybe they’ll send a thank you note?
Viva las immigrantes
First of all, they don’t spend 1/2 their lives making next to nothing. They don’t even spend close to 1/2 their professional lives making next to nothing. I will not count college because most white collar jobs require a college degree. I will count med school but only to the extent that it requires a year or two more than other professional degrees. I’ll give you the point that you are making less than market value when it comes to residency, but not next to nothing seeing as how you are still making at least as much as the average school teacher, an equally important societal asset. You can, without too much difficulty, convince me that the 2% tax is unfair. You will never convince me that I should somehow feel sorry for you because of the sacrifice you CHOSE to make to become a highly trained professional with significant earning potential.
No one is asking anyone to feel sorry for anyone, but the scapegoat here becomes the doctors, for a system that they have as little control as anyone else
To clarify my school teacher comparison, I mean that they too are underpaid professionals, but don’t have the benefit of doubling or even tripling their income after the completing an initial training phase.
you are right, the excel monkeys do work their tail off.
It’s not clear that doctors will be making less money with universal healthcare and a 2% tax. The universal healthcare will create significantly more demand for their services, either allowing them to see more patients (by using spare capacity) or increasing their fees.
Doctors have lots of control over the medical system. In fact, way too much control because they use their clout to limit the number of doctors, driving up compensation. Ever wonder why doctors in the US make so much more money than their counterparts in the UK or Canada but nearly everyone else in the healthcare system makes about the same money in all three places? It’s because doctors use monopolistic practices to drive up their wages!
Hahahaaa. Sure. bwahahahaaaaaaa. yes. right. bhwawahahahaaaaaaa
i am not asking someone to feel sorry for me. i’m damn proud of what i do, that i can help others out when i can…but i don’t like the rug being pulled under me and being blindsided.. lay what you have on the table.. without shady dealings..esp when you ask for the support of the CMA.. arnie, go back to hollywood, don’t you have anything better to do?
and as for residency pay, it sucks ass..i once calculated our pay and hours put in… i would be making more, with less headache at mickey d’s..
there is no free lunch for anyone these days.. this will i’m sure trickle down to everyone’s pocket..
it is a monopoly as is every other profession.. yes, specialties put caps on their numbers and such.. but like economics, you need to be able to have jobs for those who graduate and attract others into the field/s…
i don’t agree with 99% as qualified… a little over exaggerated to say the least..i was on the admission committee at my med school, and shuffled through some of the applications which were apalling, whether it be academic or otherwise.. and of course there were some folks who were nobel laureates.. but that is the case with every field..
and do what others do if you get rejected, go to the carribean, or back to the motherland and get into medical school there..several friends and family members have taken that route if they can’t get in.. nothing wrong with that, if you’re that keen on becoming a doctor..