Politics & Policy

GOP Congress Should Embrace the Putting Patients First Tax Act

(Photo: Mark Adams/Dreamstime)
Offering doctors a tax incentive to treat poor and indigent patients at little or no cost is the right thing to do.

Can a tax-cut bill help cure America’s health-care woes? The answer is Yes, as confirmed by the Senate’s effort to make Obamacare voluntary via repeal of the individual-coverage mandate. Similarly, the GOP Congress’s tax-reform bill should include what I call the Putting Patients First Tax Act. This would provide powerful, voluntary tax incentives for physicians to treat poor and uninsured patients. In short, making the financial value of charity care tax-deductible will create more of it — perhaps much more.

Imagine that every Friday from 9:00 a.m. to noon, an internist named Dr. April Washington, M.D. offers free treatment to patients with low incomes and/or no medical coverage. Dr. Washington earns $208,000 annually, or an average of $100 per hour, assuming a 40-hour work week. So, she writes off each Friday’s $300 as, essentially, a charitable deduction. If she does this for 50 weeks per year, she will deduct $15,000 from her taxable income.

The U.S. Tax Code allows every American to make charitable contributions up to 50 percent of his Adjusted Gross Income. Thus, this country would be far better off if Dr. Washington, in essence, “worked off” half of her tax bill in the form of medical attention to the indigent and uninsured, rather than send cash to the U.S. Treasury for prompt incineration, along with everyone else’s taxes.

This plan obviously would reduce tax revenues that doctors otherwise would inject into the Beltway. But it almost certainly would also reduce demand for Medicaid outlays. If uninsured patients consult doctors like April Washington, rather than use hospital emergency rooms for primary care, this approach could pay for itself or, in a side effect worthy of the Laffer Curve, it could save taxpayers more money than it costs. The American Academy of Family Physicians reported last May that “the median charge for outpatient conditions in the emergency room is $1,233.” So, if Dr. Washington’s charity care keeps just 13 patients out of the ER — patients whose costs taxpayers otherwise ultimately would finance — the $16,029 savings would cover more than the $15,000 cost of her charitable-care tax deduction.

Politically, this idea might have the immediate benefit of obviating Senator Susan Collins’s (R., Maine) misgivings about making Obamacare voluntary. Collins might be persuaded that any potential ill effects from making Obamacare a choice by scrapping the individual mandate would be alleviated through free medicine provided by doctors who voluntarily offer it.

Doctors applaud this idea.

• “Physicians have a long tradition (back to the time of Hippocrates) of reducing or even eliminating their fees based on individual patients’ circumstances,” says Beth Haynes, M.D., a retired emergency-room physician who now is Medical Director of the Benjamin Rush Institute. (BRI, of which I am a co-founder, works to shield the doctor–patient relationship from Obamacare and other big-government programs.) “Given the shrinking payments from third parties, accompanied by increasing overhead due to government regulations, this practice has become less financially feasible,” Haynes adds. “If physicians could claim a tax deduction for charitable reductions in their fees, I believe we would see much more charity care. This seems like a win-win for patients and doctors.”

• “I am a fan,” says Manhattan gynecologist David A. Friedman, M.D. “Verification would have to be built in to avoid abuse. A Medicaid patient, for example, could visit a doctor and swipe a card to document her appointment. Since most doctors avoid Medicaid, due to low reimbursements and dense regulations, she still could see the physician, who could deduct the financial value of the treatment that she provides that patient for free. This would vastly expand the number of doctors who care for the poor and uninsured.”

• “I have always said that if doctors could deduct their care for uninsured patients (not those on Medicaid or Medicare), there would be no uninsured-patient crisis,” says one former big-city trauma-care physician who now invests in health-care companies. “There also could be creative ways the government could reimburse part of this care to offset expenses such as malpractice insurance. Instead, doctors, especially those doing emergency care, are forced to take on liability without any chance of compensation or overhead management.”

Debate on the Senate’s tax-cut legislation is underway. The Putting Patients First Tax Act deserves a sponsor to shepherd it into the bill as a friendly amendment. In just a page or two, this measure could accomplish what Obamacare failed miserably to achieve, despite its mind-crushing 2,801 pages: A higher number of doctors willing to treat Americans who lack health coverage.


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— Deroy Murdock is a Manhattan-based Fox News contributor, a contributing editor of National Review Online.

Deroy Murdock is a Manhattan-based Fox News contributor and a contributing editor of National Review Online, and a senior fellow with the London Center for Policy Research.