A 2.3 percent physician tax would be good for patients and good for business, said Dean Robert Frank at his fourth open forum yesterday. Along with Stephen DeSilva, M.D., president of the WSU Physician Group, Dean Frank made his case in support of a statewide assessment on physician revenues that would be used to bolster the floundering Medicaid system.

"It's good policy," Dr. DeSilva said. "It's good for physician providers and it's good for patients."

A 2.3 percent tax on the state's $9.4 billion in physician practice collections -- not individual physicians' income -- would generate $220 million. About $40 million of this amount would be used to restore a recent 4 percent cut in the Medicaid budget, leaving $180 million eligible for a federal match that would generate an additional $253 million.

Altogether, the tax would make $433 million available for Medicaid. According to Gov. Jennifer Granholm's office, the additional funds would allow Medicaid fee schedules to be increased to match those of Medicare. Access would be considerably increased under this plan, Dean Frank said.

"For us, Medicaid cuts are a challenge," Dean Frank said. "For the Medicaid patient, it's crisis. If you go to a specialist and there aren't enough slots and you have a disease or illness, it's a crisis. Your health status slowly, but truly, erodes."

As of May 1, the state of Michigan enacted a 4 percent cut in Medicaid fee schedules and restricted patients from obtaining retroactive eligibility for benefits. The cut is expected to cost the WSU Physician Group $3.4 million during the next year, Dr. DeSilva said.

A physician tax initially would cost the WSU Physician Group a similar amount, at $3.4 million. However, with the increased fee schedule, Dr. DeSilva said, the group stood to gain as much as $28 million in the first year.

In addition, Dr. DeSilva said, no physician practice in the state would be negatively impacted unless their Medicaid patient load was less than 3.5 percent.

For more on the tax, please view the following links:

• Video and/or audio from yesterday's forum;
• FAQs about the Physician-Provider Tax; and
• Dr. Stephen DeSilva's letter to the editor of the Detroit Free Press.

Please watch for more developments about this important effort to be posted on the WSU School of Medicine website.