Exclusion from the Federal Health Care Programs; Is It an Economic Death Sentence?

By: Stephen Siegel

Physicians and other healthcare providers must contend with a number of what economists call “barriers to entry,” that must be overcome before they can successfully provide healthcare items and services to the public. Some of these barriers, such as appropriate education and licensure, are absolute; if an individual or business does not satisfy the barrier, he/she/it cannot provide services. Other barriers are practical; without overcoming that barrier the likelihood of success is remote. For example, a physician who is not board certified in a given specialty is going to have a very difficult time practicing that specialty.

Other barriers to entry, while not absolute or practical bars, are implicit barriers to success. For physicians these may include, but are not necessarily limited to: the hospitals where a physician has staff privileges, his/her office location, and the reputations of other physicians with home he/she is affiliated. In addition, the identities of the third party payers that contract with the physician can be a critical indicator of that practice’s economic future.

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