Congress “Solves” Medicare Cost Problem by Not Paying for Doctors

Congress “Solves” Medicare Cost Problem by Not Paying for Doctors

Poster’s Note: Below is an excellent article by Dr. Orient. As I have always said, when party A is the seeker, and party B is the provider, and party C sets the reimbursement rate, and “pays” the bills, you will have runaway inflation. Think of what happens to the cost of repairs at the body shop when you say: “I HAVE INSURANCE”.

The simple solution is to let doctors set their own rate, and let patients decide on where to go for care.

By Jane M. Orient, M.D.

Nine times in the past eight years, Congress has, at the last second, delayed the automatic cuts in doctors’ Medicare fees that it decreed some 13 years ago to prevent Medicare spending from outpacing other consumer expenditures.

The AMA threatens that doctors, especially primary care doctors, will stop accepting Medicare patients if the cuts go through. Congress cites the impending bankruptcy of the program.

Every time cuts are postponed, the next scheduled cut gets deeper. It’s like a balloon mortgage payment in reverse.

And the controversy gives columnists another occasion to rail against those greedy overpaid doctors, unwilling to assume a bit of shared sacrifice despite the economic downturn.

As Steven Pearlstein writes in The Washington Post, Congress and the President should not accede to these “un-Hippocratic ransoms.” So what if Medicare physician fees haven’t quite kept up with the costs of running the office? What he calls a “modest gap” has been “more than offset” by physicians’ working harder.

What’s a little 21 percent pay cut to someone who already makes much more than the average patient does? Of course, Mr. Pearlstein doesn’t seem to recognize that when overhead is 50 percent or more, a 21 percent cut in revenue means a cut of 42 percent or more in the physician’s actual pay. And if one is losing $23 per patient visit, it is impossible to “make it up on volume.”

Unlike the AMA, the Association of American Physicians and Surgeons (AAPS) has repeatedly said: Let the cuts go through. But don’t cut off benefits to seniors who see the doctors of their choice.

Both Congress and the AMA appear to be in deep denial about several basic facts:

First, Medicare is insolvent. Expenditures will be cut because the government doesn’t have any money.

Second, the access problem is not caused by the “sustained growth rate” (SGR) formula, but by price controls. If doctors can’t collect enough to keep their doors open, they close, like any other business.

Third, physicians could make more money while charging less, if it were not for the costs of filing claims and complying with Medicare rules.

Fourth, more doctors would do primary care if they could charge a fair price—that the patient was willing to pay—and organize their work in the most efficient way. If they could charge $100 for one long enough visit, instead of churning five patients through frantic $20 visits to bring in $100 without being accused of “upcoding,” doctors would find primary care much more attractive.

We are warned that more doctors will “opt out” if the cuts go through, as up to 200 Texas doctors are already doing each year. Exactly. We need more opted-out physicians to take care of seniors who can’t find a physician willing to work under Medicare’s constraints and threats—or who want a non-government physician.

Congress, however, punishes seniors who choose such a doctor by denying them any reimbursement at all for services they receive from opted-out doctors— or that are ordered by such doctors, even if performed by Medicare providers.

While Pearlstein might be shocked to hear it, doctors opt out of Medicare not because they want more money—many stay in just because they fear a serious drop in income—but because they want to be able to do their job. They want to be able to order what a patient needs, not what a Medicare bureaucrat decides he may have.

Congress apparently intends to cut costs by simply not paying them. Then, if doctors see fewer patients, there are fewer bills for tests or procedures. The government not only saves the $15 it might have paid the doctor, but hundreds or thousands of dollars on tests or drugs.

Fixing the SGR may top the AMA’s agenda. But for seniors, the problem is draconian cuts in care. These can be averted only by restoring patients’ freedom to choose an independent doctor, not by a slight easing of their captive doctor’s shackles.


Jane M. Orient, M.D., Executive Director of Association of American Physicians and Surgeons, has been in solo practice of general internal medicine since 1981 and is a clinical lecturer in medicine at the University of Arizona College of Medicine. She received her undergraduate degrees in chemistry and mathematics from the University of Arizona, and her M.D. from Columbia University College of Physicians and Surgeons. She is the author of Sapira’s Art and Science of Bedside Diagnosis; the fourth edition has just been published by Lippincott, Williams & Wilkins. She also authored YOUR Doctor Is Not In: Healthy Skepticism about National Health Care, published by Crown. She is the executive director of the Association of American Physicians and Surgeons, a voice for patients’ and physicians’ independence since 1943. Complete curriculum vitae posted at www.drjaneorient.com.

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