Let the Medicare physician payment cuts take effect

by Stella Fitzgibbons, MD, FACP

You know what? I think the AMA should tell Congress to just go ahead and let the Medicare pay cut go into effect.

Doctors will, of course, be squeezed further than we already are, and more outpatient practices will shut down or stop accepting new Medicare patients. More hospitals will close, and ER crowding will get worse — maybe causing some of the primary care docs who close their practices to go to work in ER’s or public clinics, discovering the wonder of getting to go home and turn off the beeper at the end of a shift.

And maybe some people will choose not to apply to med school. This will include those guys — you remember who they were — who viewed a medical degree as a license to print money and drive expensive cars. Their spots can go to people who love the work and want to do some good.

Waiting lists for elective procedures will get longer. People who demand an MRI today for that disc they popped out yesterday, and a neurosurgery appointment tomorrow, will find that they just have to do the physical therapy instead, and the surgeries that don’t happen will mean fewer deaths from unanticipated operative complications.

The American public has spent the last several decades learning that you can get any medical care you want when you want it, paid for by somebody else, if you holler loud enough or pull the right strings. But the first wave of hospital closures has already started, and the AMA’s statistics on retirements and reduced physician hours make it clear that Atlas is ready to start shrugging.

It will be a painful learning experience, but one that Canadians and Europeans have already handled. We will likely lose a few stars on our patient satisfaction ratings.  But continuing as we’ve done for the last thirty years is only going to bankrupt the country.

Go ahead, Congress, do your worst — and watch what doesn’t happen when you do.

Stella Fitzgibbons is an internal medicine physician who blogs at the Placebo Journal Blog.

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  • Vox Rusticus

    This wished-for scenario forgets the role of the public and patients in the present mess. When we have a Congress and a public that both do not wish to confront reality, one to spend without further borrowing and the other to demand what they will not pay for in taxes, conjuring a future with a 21.3 0r 33 % pay reduction and whatever follows pretends that the problem is only that of greedy and over-treating doctors.

    We aren’t a country like Canada or Great Britain or Australia. For good or bad, seniors and others are all too ready to wield their voting power to get their benefits, earned or not, and whether or not it condemns their grandchildren to harsher lives than their own. This is as much a moral problem as it is an economic problem. Pretending that some better if more spartan new world will arrive when all those bad Mercedes-driving doctors are pushed into retirement is just missing the point. The problem isn’t just one of doctor’s fees, it is about how much people want to consume and about letting so many people consume with out showing any concern for the costs.

    Cutting the Medicare payment to doctors is actually not a terrible idea. What must also go along with that is removing the cap on balance billing. If you want patients to acknowledge the cost of high consumption, you must first force them to bear those costs more directly.

    The second thing we ought to do is have a balanced Medicare budget. This should be separate from the remainder of the Federal budget. The fixed percentages of the present FICA and other Medicare taxes will have to be adjustable, so that those who vote the high reimbursements or over-inclusive coverage will see more directly–the next year when they get re-rated and their taxes go up.

    Lastly, on principle, those who die before getting any Medicare or Social Security benefits should have their estates exempt from federal estate taxes. It is enough to pay once; it is wrong to pay twice.

  • ninguem

    “……Cutting the Medicare payment to doctors is actually not a terrible idea. What must also go along with that is removing the cap on balance billing. If you want patients to acknowledge the cost of high consumption, you must first force them to bear those costs more directly……”

    Exactly. Vox Rusticus speaketh the truth.

    • sara

      Oh sure. Then watch as the patients file bankruptcy on their portion of the financial repsonsibility. Wake up ,this is America. Americans only spend their money on cars, restaurants, clothes, elctronics…..

  • http://medicalpastiche.blogspot.com Peter

    Balance billing is a quick and direct method to offset decreased Medicare payments, but Congress would never pass such a measure. They would rather force physicians away from serving Medicare patients than to put the onus on patients to pay for their own medical care.

  • random med student

    “Their spots can go to people who love the work and want to do some good.”

    I’m sorry, but who cares if somebody wants to help others if they are incompetent. A doctor’s motivation shouldn’t be the primary concern; rather, their capacity to be a good physician should be. If they are motivated by money, status, or helping other, to each his own.

  • Dr Lemmon

    I really believe that if physicians thought through problems carefully and avoided unnecessary testing, procedures and medications we could save 15 % to 20 % in health care expenditures, maybe more. I am just guessing though. These cuts would not be needed in that case. Does anyone know the numbers and projected savings for this sort of thing. Unnecessary admissions from the ER could cut a lot as well, but for that some sort of tort reform would be needed.

    Peter is right about the balance billing. A good idea that will never happen.

    • http://www.blog.greatzs.com ZMD

      It’s true that if everybody listened to what doctors really think we could save money in our medical system. But many times we doctors are listening to what the patients, their families, and their trial lawyers think we should do instead, thus the billions wasted on defensive medicine.

  • sara

    Does anybody else wonder why the Senate has the gall to treat doctors so poorly? Don’t any of the senators have parents or grandparents receiving Medicare? This damage to medical practices is a joint effort of BOTH parties -democrats and republicans alike. Let’s remember this at election time. The Tea Party is looking better to me all the time.

  • Nikki

    A major problem with balance-billing: many patients CAN’T pay the balance for care that they need. Driving more people into bankruptcy would accomplish what, exactly?

    I agree that tort reform is necessary, along with emphasis on evidence based medicine. If an older, cheaper drug can be shown to work just as well as a newer, more expensive one, then there’s a saving that doesn’t hurt anybody (except drug companies – sob – they might have to reduce their ad budgets).

    There also needs to be a long, hard look at end-of-life care. I’ve seen that problem first hand. We need to stop wasting money on the dying because they or their families refuse to face the inevitable, and focus our limited funds where they have the potential to have the greatest impact. I am not opposed to palliative care, but I am opposed to expensive surgeries and other treatments that give a patient a few more months at best.

    • Vox Rusticus

      Balance billing offers the opportunity to actually compete on price and quality. No one says what you have to bill on balance; if you want a no-frills service, maybe nothing; if you want lots of personal attention, then you pay the difference, as much or as little as you like. With balance billing that is not limited, patients can actually compare value for price.

      As far as patients being able to pay or not pay, nothing about balance billing prohibits use of secondary insurance, if you want that.

      Price controls do not make services available to people who cannot pay when the price is fixed so low that the cost of services exceeds the payment. All that results from that is market failure, or a quality of service so poor as to be unrecognizable as medical care, which is the same thing.

    • http://medicalpastiche.blogspot.com Peter

      Nikki, someone is paying for the balance-bill for Medicare patients, and those are small-businesses and individuals who have private insurance.

      I think that if a physician’s medical services are valued appropriately by patients, then they would gladly pay the bill. However, decades of third-party-payor systems in this country have alienated patients from the true cost of physician services.

      What do patients truly value? Expensive cellphones, fast cars, vacations, big homes, extravagant parties, et cetera. When have you heard of a patient who would give up those things in favor of medical care? Almost never. Until patients have to make tough decisions like giving up a new car for years-worth of seeing a doctor, balance billing will not work from a patient perspective.

  • Nemo

    Quite frankly, I know dozens of physicians – none, not one, thinks practicing medicine is a license to priint money or drive fancy cars. Dozens I know are still in debt from student loans in their 50′s, with mortgages and medical malpractice on top of that. This is both specialists and primary care docs. It is a MYTH that all specialists make oodles of money, just as it is a MYTH that all primary care docs are like starving artists.

    To think specialists only go into their area for the money shows you believe yourself superior for chosing a different path. to think only primary care doc’s “care” about others – puhleez

  • Resident that might drop out

    Nice response ZMD. Let’s start with tort reform. Let’s stop the entitlements. And why should physicians not be rewarded for excellence? Why should everyone receive the same $ for the same procedure? Dr. Oz should earn more than I do per case… And Sanjay Gupta should earn less per case.

  • gerridoc

    It is a really sad day when Medicare payments for physicians become a focal point for political bickering. I agree with Vox Rusticus that balance billing should be put back on the table. Conspicuous Consumption has trumped all other values in this country.

  • tony

    Individual and most small group practices will be destroyed by the current healthcare reform bill and the medicare cuts.

    While most of europe detest the delivery of its healthcare (i.e. waiting 3 months for a colonoscopy, etc), others in this country want to emulate it.

    The only way to survive is to refuse all insurance. Clinics will take care of the rest.

    The healthcare reform bill was purely a socialist political agenda and a hijacking of state powers to the federal government. Mortality rates in this country will skyrocket and people will begin having seizures in the streets.

    No business can withstand a 21% revenue reduction. So, this effects not only the elderly but most of the disabled.
    This is a moral shame above all.

    acecap consulting

  • Marc Gorayeb, MD

    What primary care practices need is market power in their communities.

    Many physicians (particularly specialists) are already limiting the number of Medicare patients they will place on their schedules, if the slots can be filled by better paying patients/insurers. However, private insurers are now notifying participating providers that their reimbursement rates will be unchanged or even reduced as of next year. Many providers are now owned by larger multi-specialty organizations (e.g. hospitals), that will accept the lower payments, and then turn around and squeeze their employee physicians. The new health reform law contemplates, encourages and even induces consolidation of physician practices to keep them from dropping their participating provider status.

    Achieving market power might require consolidation of primary care practices in a community. Exercising market power works for some hospitals and specialty groups, as well as other professions, and it can work in many primary care practices.

    Professional practice managers and health care attorneys can help the independent practitioners in a community to survive as non-participating providers, either through mergers, partnerships or other forms of business ventures.

  • Paul

    I’m an internist. Say I gross $300,000/year, and my net income is $120,000 after overhead. Say also I have a preponderance of Medicare income, so that Medicare is the source of half my income. If my gross then goes by down 21% of $150,000, it decreases by $31,500. My overhead remains at $180,000, so my net income falls to $88,500, for a decrease of 26.2%. I would have no choice but to quit Medicare the day the cut goes through. And I am not alone.


    The cut will suck.

    Balanced billing is dead. Not part of any plan that would benefit politicians.

    EMTALA will not go away and the forced enslavement of docs will go on as part of the great unfunded mandated continued on the backs of physicians.

    Hospital bylaws will continue the slavery expectation where EMTALA leaves off.

    Corralling docs into hospital ownership will increase.

    Tying medical licensure to participation in the great social experiment will make null and void the “boutique escape” model many primary care docs see as their personal “get out of socialism free card.”

    If I had a dime for every time I read or hear about ACOs and their buzz word QUALITY QUALITY QUALITY QUALITY ad nauseum knowing that what it really means is that we will be demanded to provide more serviced for less reimbursment , I could retire sooner.

    We will never be allowed to enjoy the risks and benefits of a free market simply because the government has the will and the means to tell us what to do and all we can do is walk.

    They do it because they can.

    We trap ourselves with educational debt and a very directed vocation that precludes most of us from competencies in other revenue generation endeavors. It’s a near perfect crime and nothing will change for the better until the vast majority of us say “NO”. When the time comes, frankly I don’t know if I will be brave enough to say “NO”.

  • elayneg

    In what other industry are those who provide a service subject to government intervention. We are already on a nationalized system when it comes to Medicare.
    In what other industry does an outside source have the opportunity to decide you can live with 21% less income and still meet rising overhead. Keep in mind that whatever the government does with Medicare, the private carriers will follow. If the government can pay physicians 21% less why not the private carriers.

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