Medicare slashes pay to doctors, and what that really means

What we’re learning from the 21% Medicare pay cut to physicians that occurred today:

* There really must be a cost-control crisis with Medicare and the only politically-acceptable way to implement those cost controls are by cutting working physicians’ payments.

* There’s was widespread political support for blocking the scheduled pay cuts to doctors, but central government control moves very slowly. That’s because doing so is expensive. For now, doctors have been asked to hold on to our billings for about 10 days so they can put through another temporary patch that will further delay the cuts until October 1 (pg 107) as part of a jobs bill, paid for by stimulus funds.

* If they are serious about not cutting physicians’ payments, Congress must get rid of the sustainable growth rate formula that keeps calling for the cuts and acknowledge that the country is going to be on the hook for billions of dollars in additional Medicare costs. Right now, that’s not sounding too popular. Better to stand by your plan and not mention these additional costs to the nation.

* We also see that Congress will not commit to fiscal conservancy when it is politically ill-advised to do so. Recall that the Sustainable Growth Rate (SGR) formula, part of the Balanced Budget Act of 1997 was enacted on August 5, 1997 to replace the Medicare Volume Performance Standard (MVPS). Section 1848(f)(2) of the Act specified the formula for establishing yearly SGR targets for physicians’ services under Medicare and was intended to control the growth in aggregate Medicare expenditures for physicians’ services. Since this formula to control Medicare costs is very likely to now be overturned, what does this say about other well-intentioned but politically unpopular policy initiatives planned to save costs in years ahead?

* Policy decisions run by a single central body affect the entire United States and not just a portion of it. Sweeping legislation that affects the entire United States carries high risks to the nation as a whole if initial planning assumptions are incorrect.

* As mentioned by others today, new primary care doctors are avoiding government healthcare because it cannot cover their costs. Even large institutions like Mayo clinic have done the math and aren’t taking Medicare patients at some of their primary care sites. As others follow suit, this will put further strain on primary care physician availability.

Of course, now that the physician cost cuts are underway, maybe we should just stay the course and see what happens.

As crazy as that might sound, I bet it would ultimately give us some real change we could believe in.

Wes Fisher is a cardiologist who blogs at Dr. Wes.

Submit a guest post and be heard.

View 23 Comments >