Medicare doesn’t get it
“Spending grew as doctors saw patients more frequently, did more tests and provided more in-office drugs than expected.
In addition to increasing premiums, the higher-than-expected spending on doctor services last year might hamper physician efforts to win a pay increase instead of a cut from Medicare next year.”
This is a no-win situation for everyone involved. The government is blaming the physicians for the growing cost and expense of emerging technology by cutting physician reimbursements – doctors lose. Cut reimbursements, and physicians are likely to respond by dropping Medicare entirely – patients lose.
Any wonder why medical students are shunning primary care? Why go into a profession where you have to work in an environment that plans “physician pay cuts they say would average 26% from January 2006 to 2011.”
Related posts:
- Dropping Medicare patients
- Medicare and cutting health care costs
- Op-ed: Doctors’ pay cuts save little in health costs
- Once you hit Medicare age, good luck finding a primary care doctor
- The patient dropping lottery
- Finding a doctor who accepts Medicare
- Delayed government reimbursements
{ 7 comments }
This is the dynamic of the sweatshop. Cut per-encounter reimbursement (or do nothing in the face of rising production costs, same result) and encounters increas in volume to recover lost revenue, until practical limits are reached. Then it just becomes unfeasable to see patients under the existing scale and the supply of services disappears. No market. All of this is forseeable, and it is foolish to think that because Medicare hasn’t yet priced itself out of a market that it couldn’t possibly do so in the future.
Imagine a market where you pay the full bill in cash at the time of the visit. Forget your insurance card? No problem, you won’t be needing it. Forget your money, you won’t be seen.
That is the way things used to be. Maybe they will be that way again.
CHenry
And as if that isn’t bad enough, Medicare audits could get a lot tougher too:
http://www.ama-assn.org/amednews/2005/04/04/gvl10404.htm
While the President got you all riled up in the name of slower INCREASES for med mal, he gutted you on your reimbursements. You’re going to get squeezed even tighter as the states look for ways to cut costs when the new federal cutbacks come in.
Will you be marching on any capitols on this issue? Is anyone going to be putting pamphlets in their offices about the evils of medicare administrators and the politicians who appoint them? Are you going to refuse to treat their wives and children?
It’s going to be hard to get the general public too riled up on this issue when you already convinced them the evil lawyers were making you go broke. You probably blew your legislative wad, so to speak. Too bad you fired at the wrong target.
Please Curious JD, enough of the false choices, as if for U.S. medicine there is only one problem, and somehow the unbridled tort bar couldn’t possibly be one. This is not an either/or situation but a both-and situation, and you know it. So give the sophistry a rest.
No one with any sense thinks that medmal is the only problem threatening American medicine, or that somehow with better controls on the unlimited incentive of unlimited awards presently afforded malpractice lawyers that all the problems in medicine are going to go away. But medmal really is a problem, and the malpractice bar is a very big part of that problem, and it does very much need fixing, and removing some of the lawyers’ incentive to sue has and likely will continue to contribute to fixing that problem.
As for Medicare, they have their interests, and those do not necessarily have anything to do with the better interests of patient access, or fair payment or anything else. If they could shove mandates down the throats of doctors and hospitals, they would, and in some ways, they already have. What they have not done–at least not yet–is so reduced the
reimbursement, or so burdened the claims process that it becomes outright unacceptable for hospitals and practices to do business with them on any terms. But markets are what they are, and just because the market has not yet failed doesn’t mean that it won’t or can’t.
I fear that day, but I can imagine it all the same. What will an America be like whose government has at once taxed the entire living lifetime wages of its working citizens on the promise that the same kind of care it gives to today’s Medicare beneficiaries will be available to those now paying when they are old and no longer working and then reneges on that promise? Do you think they will feel cheated if that promise is not kept? Do you think that is a formula for social disruption and disorder? I do.
I don’t blame Medicare for doing what it can to thwart waste, fraud and abuse. That is their responsibility in public stewardship. But relentless reduction in payment cannot continue when the government at the same time fixes total charges that can be levied for services regardless of the costs to deliver those services, including the costs of the labor and enterprise of physicians.
CHenry
Mr Henry,
It’s not a false choice. Anyone who watches the legislative process knows that a group typically only gets one big ticket item now and then. You go to the people with too many crises that have to be fixed and eventually they get jaded and lose interest. Or worse yet, tell you to quit your whining, you already make 7 times the average salary of the American worker.
And the fact is, you had your issue in tort reform. And all it got you was the hope that the increase in premiums will slow. No guarantees, nothing. Just hope. You’re really not even hurting lawyers that much, if at all.
You’re right about Medicare. That’s the kind of thing your efforts should have been focused on reforming though. But the nature of the legislative process just put that on the back burner. Bush isn’t going to go to bat to put more Medicare funds back in the budget.
Curious
I doubt that any practice costs will decrease in the forseeable future. EMRs at best will slow some increases in labor and materials costs on the outpatient office level at the expense of increasing the costs of office IT, certainly during the initial adaptation and also long-term, with downstream service and upgrade costs. In my field, I have seen no reliable reports that EMR systems have saved any money at all. The most significant component in most outpatient practices is staff labor, and those hourly costs will increase for sure. A plan that decreases Medicare reimbursements by any amount, never mind by 11-26%, will make Medicare, with its huge compliance, audit, and practice manpower requirements an unacceptable form of insurance, and many practices will simply cease to accept Medicare in any capacity. At present, even if a practice does not accept Medicare assignment, it is still bound by Medicare laws that establish upper limits to the charges the practice can levy for its services, even though the practice never receives any payment from Medicare. The only other status a practice can presently elect is to opt out of Medicare altogether, for which Medicare then imposes a two-year lock-out on the practice. A practice is not allowed to offer some services at the Medicare schedule and not others for which it detrmines that the Medicare rate is too low.
It is a bad situation. An 11% reimbursement cut goes straight to the funds remaining after all the staff, rent and other operating costs of the practice are paid. In some locations with high overhead, that wipes out the doctor’s pay for the service. At 26%, that not only costs the doctor his pay, but outright loses money; it costs the practice to see the patient. That clearly is a non-starter.
Squealing that doctors make “seven times” some statistical Labor Department income figure–which is doubtful–is meaningless. Imposing money-losing burdens on medical practices, or demanding work that when paid leaves nothing for the doctor is unacceptable on its face. On those terms, Medicare will and should be turned away.
We need serious changes to forestall a future where people with inadequate insurance will be told to pay up on the spot or do without. Bounty-hunter audits are an incredibly bad idea (there are already qui tam laws in place anyway). There is waste that could be trimmed. Most states could start by scruitinizing their workmen’s compensation programs, which in my experience are rife with fraud and abuse, particularly by patients. In my own experience, I would say 85% of those presenting to my practice with “work-related” injuries are fraudulent, knowingly claiming medical problems from something at work that obviously are not work-related. Considering how poorly these claims are paid anyway, it is no surprise that many doctors refuse to see any workmen’s comp cases.
you are right!
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