Blogs
“Doc Fix” Back in the News—Why Again? (1 comment)
Posted: Wednesday, March 10th, 2010By Dennis Smith
The air waves have been abuzz again with stories that doctors will drop out of Medicare because they face a 21 percent reduction in their fees. Congress again is on the brink of whether it would prevent the decrease from going into effect. Congressional leadership has repackaged the “doc fix” as it is known in the Nation’s Capital with “must pass” legislation to extend unemployment benefits. Tremendous political pressure was brought to bear on individual Senators to accede to an unanimous consent request to allow the legislation to be voted on. Washington depends upon, and even manufactures, a crisis to break political logjams.
But like Bill Murray in “Ground Hog Day,” Congress will re-live the same chain of events all over again. At a cost of $1 billion to delay the reduction in payment that is otherwise due under current law, the “fix” is good for only a month.
Why are doctors once again in this situation? Was Congress unaware that Medicare doctors and their patients were at risk of the reduction? Hardly. A year ago, the Congressional Budget Office (CBO) warned the House Budget Committee not only would the 21 percent reduction occur in 2010, by 2014, the reduction would reach 40 percent. CBO predicts that under these large reductions, physicians will likely withdraw from Medicare and beneficiaries will lose access to care. CBO also points out that as physician access is reduced, access to other medical services will also decline. Use of prescription drugs, therapies, tests, etc. relies on a physician’s orders. CBO warns quality of care will be compromised, the health of seniors will deteriorate, and, ironically, costs elsewhere in the health care system will increase as seniors will be forced to seek care in hospital emergency rooms.
These programmed reductions are the result of a formula called the Sustainable Growth Rate (SGR) written into law under the Balanced Budget Act of 1997. The formula is designed to lower payments when physician costs exceed growth in the rest of the economy. It should be noted that reimbursement is based on practice costs, not performance. Poor care at the physician level increases total health care costs.
For years, Congress has routinely delayed the reductions from going into effect. It has not fixed the problem, only delayed the impact and in the process, racked up huge cumulative costs. Under the President’s latest budget, the Office of Management and Budget (OMB) estimates it will cost $371 billion over ten years to “fix” the Medicare payment structure for physicians and other health care providers. Paying for the full 10 year cost to the federal government has been a deterrent to Congress. Moreover, Medicare beneficiaries bear 25 percent of Part B benefits. Members of Congress are acutely aware that millions of seniors would see their monthly Social Security benefit eaten up by the “fix” under the framework of current law.
Congress must responsibly confront the reality that a 10 year “fix” is more expensive in each passing year. Our nation’s doctors rightfully complain they are political hostages to the federal government and no other health care providers are forced into this annual game of chicken. Hospitals are not treated in this manner.
No one has really explained why total health care costs should continue to increase at twice the rate as the rest of the economy. Physicians must take their rightful place in coordinating care and reducing excess cost by reducing over-utilization and under-utilization. The sooner the federal government, states, and the private sector truly reforms their payment systems which should be based on competition, outcomes, quality, and value, the better for all.
Eventually, Bill Murray learned from his mistakes and broke the Ground Hog Day spell. It is time for us to do the same.
One Response to ““Doc Fix” Back in the News—Why Again?”
Leave a Reply
- ▼July (10)
- The Changing Landscape of Food Safety
- Listeria - FDA Driving More Testing, More Recalls, and A Wake Up Call To The Food Industry
- Managing Director Dr. David Acheson responds to advocates who say drinking raw milk is worth the risk on NPR
- The Carrot and the Stick of EMR Adoption
- James C. Capretta
- Daniel J. Schuyler
- Cheryl S. Smith
- Those Hazy, Crazy, But Not so Lazy Days of Summer
- Video: Comparative Effectiveness Research
- Medicaid Places Pressure upon States
- June (10)
- May (12)
- April (6)
- March (14)
- February (12)
- January (8)
[...] Managing Director of Medicare Practice, shares his latest perspective in his most recent blog entry here News “Doc Fix” Back in the News—Why Again? Doctors around the nation sit and await [...]