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Citing pandemic economics, Beth Israel group practice to halt retirement contributions to more than 1,200 doctors
By adamg on Thu, 03/26/2020 - 6:02pm
A large group practice at Beth Israel Deaconess Medical Center informed its physicians today that it's ending its contribution to their retirement fund, which had been equivalent to roughly 10% of their salaries, on April 1.
In a letter to the doctors, Dr. Alexa Kimball, president and CEO of Harvard Medical Faculty Physicians at BIDMC, said that dire predictions for the economic future convinced the board it needed to act now in advance of what could come.
Like many other health care and physician organizations, the economics of the care we provide has changed quickly and dramatically. We have undertaken a review of our financial situation to understand the impact of the pandemic on our organizations. ...
I wish I had better news to convey as I know all of you are making sacrifices every day in all sorts of ways. Please be assured that we are relentlessly pursuing every avenue we can find to support you and our patients, as well as keeping our organization healthy for the figure. Sometimes that means making hard decisions, but we are in this together - both in this moment and on the other side of this. We will be assessing this situation and hope to be able to adjust it as conditions improve.
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Comments
I would be curious what
I would be curious what exactly are the specifics of their economics that made this needed? Are they not getting money from the insurance companies for care? Also was it so dire to do it RIGHT NOT and not wait a few weeks?
How many of the people coming
How many of the people coming in have no insurance at all?
Or come without any paperwork?
Then there's the issue that they canceled all their scheduled surgery for the next few months. That's where the money comes from.
Electives help pay the bills
There are loads of elective surgeries that have been cancelled -- and that's a huge loss of revenue. The doctor is still getting paid, the equipment still needs to be paid for, but nobody's paying for the surgery those things are ready to do and aren't doing.
Regular Appointments Not happening
Not agreeing with the halt to payments to the retirement fund at all. Have seen it too many times and it never comes back. However, large hospitals are taking a hit by cancelling or postponing regular appointments. Annual checkups for example:eye exams, dermatology, women's health have been postponed for months. Two of my March appointments have been moved to September. Friend had her PT put on hold indefinetly.
Virtually all "elective"
Virtually all "elective" appointments have been postponed. Any that are being seen are commonly being seen by telephone (pennies on the dollar). There are a few that are being seen by video/audio visits which pay the same as an in-person visit but those are far and few between. As such revenues are massively down and if your practice was already having a delicate balancing act between revenues and expenses, well expenses haven't gone down and revenues are down substantially..
"We are all in this together"
has always been corporate speak for "we, the executives, are keeping our bonuses."
The cuts will continue until morale improves?
These guys better have a much better explanation other than "hey you need to take one for the team" when they are dealing with plenty of @#$% already.
Sorry, try again
Harvard Medical Faculty Physicians at Beth Israel Deaconess Medical Center, Inc is a nonprofit corporation. They do not have a profit motive for this. They are not protecting their bonuses or stock options. They are trying to stay in business.
If you had a clue you would understand that it is private insurance that keeps hospitals and physician groups in business. Medicaid pays WAAAAY lower than the cost of care (about 60% of cost of care in MA) and medicare pays a little more (80% or so). When they are hit with a large influx of medicare and medicaid patients they quickly get into financial trouble. That is happening now.
One of the reasons New York City has too few hospital beds to deal with the pandemic is exactly this problem. More than 20 hospitals in NY have closed since 2000 and medicaid in NY pays on average 56% of what medicare pays (which is already below cost). There are 13% fewer beds than in 2010.
Next time leave your knee jerk reaction aside and do a little homework before you speak out of your ass.
Non-profit isn't necessarily a meaningful distinction
While they do not have shareholders to answer to, they are nevertheless a big business, with about half a billion dollars in revenue, and a couple of execs compensated in the million dollar per year range (which is admittedly small potatoes compared to pharma or health insurance or hospital administration). They have a number of choices to make and a number of places where costs could be cut. Employee retirement plan contribution is one. There are others. Priorities were examined, and decisions were made. Maybe they were in fact the right decisions. I'm certainly not in a position to judge.
Aside: nonprofit doesn't imply "charity"; it's just the way the company happens to be organized, e.g., without shareholders. The New York Stock Exchange was a nonprofit corporation between 1971 and 2005.
The Physicians Association is not the Hospital
The organization is a group of physicians and their administrators, not the general hospital staff. I did not state nor imply they are a charity. Their form 990 is publicly available so you can look up their earnings from the group if you like. Being a nonprofit means they cannot hold any equity positions and they are regulated by the Attorney General's office.
Their choices are their own, but one can only assume they chose the best first option to cut a major expense--the contribution to the retirement fund. At 10% of salary that is a pretty big expense for such a high earning bunch. It would be a pretty easy thing to sacrifice for a period of time during a financial shock such as they are likely experiencing for the reasons stated above. They cannot give up working just because their average reimbursement is now below cost, so cut the retirement contribution until things settle down. Makes sense to me.
The main point is this is not some corporation that is cutting workers retirement to keep their earnings or stock price high. They have no stock. And they are cutting their own retirement contribution, not some evil CEO out of central casting.
I'm aware of all that
Yes, that's why I said half a billion in revenue rather than 3.3 billion in revenue (BIDMC)
that's where I got my numbers.
How are the docs paid? Are they paid straight salary or are they paid based on the procedures that they bill? If it's the latter, then it doesn't really make sense to talk about reimbursements being "below cost" in the way it would make sense to talk about that with a hospital that has buildings, equipment, non-MD salaries, overhead, etc.
Non profit?
Non Profits operate like managed care and big salaries are not something Management skimps on. Even DPH chases money, the whole system is corrupt. These ho ssd's pitals generate billions and run in the black. It is a tax scam.
Not surprised
Ever since the merger with Lahey, BI has cut back on bonuses, decreased pay significantly for physicians in certain departments and other pretty crappy, corporate things. They were just waiting for the right time to institute this sort of thing. Now they have an excuse... other than corporate greed.
I hope the physicians know how much the public appreciates what they are doing- with all the other healthcare workers, admin support and hospital employees.
At some point, I hope we look back and reflect on how we treat one another because this is just not acceptable.
Simple question
How much of a pay cut is Dr. Kimball taking?