Physician Tax Hurts Health Care

Editor’s Note: The Michigan Legislature is considering levying a 3-percent tax on doctors to help fund the state’s Medicaid system and shore up the state budget. The measure passed the House on October 6.

by Richard E. Smith, MD
October 16, 2009

Adding yet another tax on the health care industry, at a time when health care professionals already are struggling to maintain quality of care during difficult economic times and uncertain federal reform, puts every Michigan patient at serious risk.

For 30 years, physicians have subsidized the Medicaid program, despite chronic underfunding and declining reimbursement. At the same time, physicians have fought tooth and nail to protect Medicare funding in every aspect, regardless of reimbursement issues.

Despite all of the political rhetoric, the argument that physicians will actually benefit from being taxed in three different ways (income tax, Michigan Business Tax, and now a physician tax) simply does not hold water. Adding another burden to the health care industry will ultimately hurt every Michigan citizen, not just those who are on Medicaid.

Over the past two weeks, I have been flooded with phone calls and emails from current and future physicians who have said that they will either retire early or practice in more physician-friendly states. And when Michigan is already facing a physician shortage of 4,000-6,000 doctors, forcing more doctors out of the state with a physician tax would be devastating to patient access to health care.

These physicians have crunched the numbers. They don’t add up.

Michigan’s patients deserve a real, equitable, long-term solution to Medicaid funding, not a quick-fix Band-Aid that only displaces the problem from one group to another.

Medicaid is a societal issue and should be funded appropriately by our elected leaders, not through expedient, shortsighted quick fixes that will undermine Michigan’s health care system for decades to come.

A physician tax has been tried in other states and, after failing miserably, the tax was repealed. Another state is being sued because the tax is arguably illegal. Can we not learn from the mistakes of others? Must we impose this kind of disaster on ourselves to get the point?

Richard E. Smith, MD, is a Detroit obstetrician/gynecologist and president of the15,000-member Michigan State Medical Society.