The patient reality of a Medicare payment cut

Dear United States House of Representatives and Senate:

I really hope that you enjoy your Christmas break going back home to your families. While you’re home, I really hope that you will hear from those constituents who will be affected by the 27.4 percent Medicare physician pay reduction that is schedule to take effect January 1st. I really hope that the American Academy of Family Physicians, the American Medical Association, the mainstream media, social media, and other outlets start to cover stories of patients who will lose access to their physicians because of those physicians who will choose to no longer accept Medicare as health insurance.

Did you know that one in four patients seen by Family Physicians are on Medicare? Did you know that for some Family Physicians, Medicare comprises as much as 8 in 10 of their patients? What would happen if your pay was cut by nearly 30%? Oh yeah, I forgot. Government never gets a cut. The Federal Government continues to grow.

I know that you have been doing your political calculations about who will get the blame for the lack of passing a definitive solution. Let me help you out. All of you will take the blame including the House, the Senate, and the President — including the Republicans and the Democrats.

I have talked some of my colleagues and some of my patients, and all of us are very upset about this. Some of my physician friends are really thinking this time about completing the necessary paperwork to stop accepting Medicare patients. How can any business (except government) run with such uncertainty as not finding a permanent fix to the broken current Medicare system. Patients will be unable to see their physicians, resulting in delayed care, increased hospitalization, and illness.

Will I stop taking Medicare patients as of January 1st? I have 10 days to decide. Of course, it would be a bold political statement. But, alas, I’m not a politician. I’m a physician and a healer. I still hopeful, even though it is a diminishing hope, that my prediction will stll come true, and the Congressional Conference committee will come together to hammer out a deal before the end of the year.

In the meantime, I will be educating my patients on this (as of now) political reality of a Medicare payment cut. I encourage my physician colleagues to utilize social media outlets to express our outrage that America’s patients and physicians have become political pawns to try to score political points with the public.

Happy Holidays to the members of Congress and the President. I know that Santa will give you everything that your deserve this holiday season.


Congress has delayed the Medicare pay cut for 2 months. Then, the cycle begins anew.

Mike Sevilla is a family physician who blogs at Family Medicine Rocks

Submit a guest post and be heard on social media’s leading physician voice.

Comments are moderated before they are published. Please read the comment policy.

  • PamC

    I cannot “LIKE” this article enough!!!!!!! I’ve already had to start the process of finding some family member who can help me pay for me to get into a pain clinic because no one takes Medicare. My pain is crippling. If I could fix that, I could go back to work and not *need* Medicare. But here I’m stuck.

    One thing that REALLY pisses me off is that I *paid* for my medicare benefits in my FICA taxes taken out of my paycheck when I worked. And they’re cutting benefits? Wasn’t that my money in the first place???

    • Jeremiah Glosenger

      You did pay into the system with your payroll taxes, but that is still not enough money to pay for all the benefits people expect today.  The system was designed with the expectation that we would have a population growth pyramid to sustain it indefinitely.  In essence, the very first medicare/ social security generation reaped benefits that they never paid for by having the young workers pay for it through FICA.  Every subsequent generation has been paying for the one before.  Your money went to pay for someone else while you were working; now your benefits are determined by those who are paying into the system today.  When there are more receiving benefits and less paying in…we get the very predictable problem we have today.  If only the original generation had set this up more like savings accounts rather than a Ponzi-like scheme, people could at least feel better knowing that they were getting all their own money back that they put in instead of being ripped off by a former generation who received benefits without actually paying into the system.

      • John Henry

        “population growth pyramid to sustain it. .  .” = Ponzi scheme.

    • ninguem

      “…….One thing that REALLY pisses me off is that I *paid* for my medicare
      benefits in my FICA taxes taken out of my paycheck when I worked. And
      they’re cutting benefits? Wasn’t that my money in the first place???……”

      Listen very carefully.

      No.  You.  Didn’t.

      You did NOT “pay for your medicare benefits”. You paid for the previous generation’s Medicare benefits. It’s been litigated, long ago. It’s quite clear, you did not pay into some account with your name on it, as though it were an annuity or an IRA. When you paid FICA, the money went to then-current recipients….not to you. All that are left are IOU’s, which the government is unable and unwilling to honor.

      No, Medicare and Social Security will not go bankrupt. What they will do is lower benefits. It appears you’ve already noticed that.

      Yes it WAS your money. It was taken away from you for a Ponzi scheme. I don’t care what Rachel Maddow and the usual clowns have to say, it was a Ponzi scheme.The usual talking heads like to quibble that it’s not a Ponzi scheme because it wasn’t anyone’s intention to rip off anyone.

      Heck, Ponzi himself believed in what he was doing, too.

      This could be fixed with private accounts, which is more like what the rest of the world does. When proposed, it gets attacked as an evil Republican scheme.

      • Margalit Gur-Arie

        Medicare is not an investment instrument, therefore it cannot be a Ponzi scheme. It is insurance and as such there is no meaning to “some account with your name on it”, just like there is no such thing in private insurance. It’s all about the pool and the risk. Some folks will get more than they “put in” and others will get less, depending on their medical needs. I would guess that every person in their right mind would hope to need as little as possible.
        The reason Medicare is supposedly running out money, or ability to pay all benefits, is that unlike private insurance which raises premiums at the drop of a hat, Medicare has not kept up with raising taxes to account for the increased risk.

        If Medicare was universal, not just for seniors, the entire thing would make perfect sense, and it would also be significantly cheaper, because the pool would become bigger and healthier, not to mention the disappearance of most “administrative” expenses.

  • Anonymous

    The problem is that the dead of night passage of ObamaCare mandated $600 billion in Medicare cuts.  The democrats are working 24/7 to blame it on the Republicans, who voted 100% against these cuts.

    I hope this deadline is not part of their strategy.

    • Stephen Rockower

      ACLUmember:  wrong wrong and wrong.  The SGR system was put in place by the Republicants in the 1990′s.  Yes, signed by Clinton, but he was veering right during the time Newt was impeaching him for adultery (Hah, that’s a laugh).  The present crisis is 12 years in the making, since Congress has put off fixing it each and every year.

      • Anonymous

        In the recently released Annual Report of the Medicare Board of Trustees, Richard Foster, Medicare’s chief actuary, noted that Medicare payment rates for doctors and hospitals serving seniors will be cut by 30% over the next three years. Under the policies of the Patient Protection and Affordable Care Act, by 2019 Medicare payment rates will be lower than under Medicaid. Mr. Foster notes that by the end of the 75-year projection period in the Annual Medicare Trustees Report, Medicare payment rates will be one-third of what will be paid by private insurance, and only half of what is paid by Medicaid. Altogether, ObamaCare cuts $818 billion from Medicare Part A (hospital insurance) from 2014-2023, the first 10 years of its full implementation, and $3.2 trillion over the first 20 years, 2014-2033. Adding in ObamaCare cuts for Medicare Part B (physicians fees and other services) brings the total cut to $1.05 trillion over the first 10 years and $4.95 trillion over the first 20 years.

    • Anonymous

      Turns out the Affordable Care Act is so affordable that doctors can’t afford to care for the patients.

      • Anonymous

        Wrong! Doctors will be able to easily afford to care for patients under the Affordable Care Act. They just need to understand that the entire delivery model is gradually changing. Instead of having a thousand one-doc or two-doc private practices scattered all over a specific geographical area, the future model will have a few large hospital based ACO models. These large ACOs will be much more efficient and more cost effective when it’s all under one roof. So, if these small practices are smart and embrace the change, they will migrate with other health care professionals as employees to the new model. They will become salaried. They will have regular hours. They will see their malpractice premiums disappear as the ACO buys group insurance. They will be happier and work with a host of other varied professionals to promote wellness and good outcomes. Best of all, fee-for-service will go away and be replaced by rewards for wellness and good outcomes. These ACOs will be patient rated and receive regular reports for their performance. Sick care will no longer be the incentive. The ACO will profit from wellness. Those that do not promote wellness will not see patients. Those patients will go to a better performing ACO. Especially Medicare patients. Medicare will pay for wellness and good outcomes in the future. Today, Medicare pays for volume. That will stop! I suggest that you look into joining an ACO like my doctors is doing. 

        • Anonymous

          …”Best of all, fee-for-service will go away and be replaced by rewards for wellness and good outcomes. These ACOs will be patient rated and receive regular reports for their performance. The ACO will profit from wellness”
          But wouldn’t a doctor now avoid accepting those very sick patients with low chances of recovery if they feel they will be penalized for poor outcomes?  Who would want to risk their jobs and reputations by taking on an advanced cancer patient that might die under their care.

          • Anonymous

            As is with most negative critics of the Affordable Care Act (ACA), you obviously have not read the rules that govern the new ACO model. Most critics of the ACA have no idea what’s in the new law. Why? Because they are too busy worrying about partisan politics and about winning elections and about repealing it rather than making our health care system better for consumers. Long story short, in order to participate in the ACO model and be sanctioned as a certified ACO, all patients must be accepted regardless of health. The ACO receives a set dollar amount for each patient assigned to them regardless of their health. Then, the job of the salaried professionals in the ACO is to work together as a team to find new and innovative ways to maintain wellness and to promote good outcomes. Wellness means less patient visits. Less patient visits means less overall spending per patient. Less overall spending per patient means more money saved. More money saved means profits to be shared among salaried professionals and ACO stakeholders. If the critics of the ACA were as intent to allow the ACA to succeed as they are to see it fail, maybe we could begin to see some cost savings much sooner. The key difference is ending the failed fee-for-service model and promoting a health care delivery concept that incentivizes wellness and good outcomes. ACOs do exactly that and they do it fairly. Today, FFS docs can fired their patients if they become too costly. ACOs end that corrupt practice. If docs don’t want to migrate to the ACO model, fine. My guess, the market will get swallowed up by ACOs anyway and we will begin to see more and more small one-doc practices going out of business.

          •!/CloseCall_MD Close Call

            Okay, so all private practice docs join together under an ACO.  And what happens when you get the 1 or 2 ACOs in a certain geographical area start negotiating the heck out of reimbursement rates from the private insurers (say up to 200% of medicare rates) since they’re the only game in town?  The unintended consequence of pushing for market consolidation is that the hospitals and doctors (now combined), can exert their clout over the private insurers.  I don’t see how the Affordable Care Act addresses this very real problem. 

          • Anonymous

            That’s why there’s a need for a referee to keep score. You see, free markets are a great idea under ideal conditions and when honor and integrity are in place. Unfortunately, greed always seems to take over when there’s little or no oversight. We saw that with Wall Street. We see it today in health care. The corruption in the drug industry is a perfect example. In the future, the only way to regulate the greed you seem to suggest is with strict federal and state regulators. Health care today is no different that Wall Street. We needed a Dodd/Frank for Wall Street. The Affordable Care Act is the Dodd/Frank for a corrupt health care industry. Again, you obviously have not read the new law. How can anyone expect you to understand the role of HHS.

          • Anonymous

            Actually, where Congress missed the boat was by not, at the very least, putting a robust public option into the state exchanges. Maybe a plan where those under 65 could opt to buy into Medicare. Most smart people know that the real answer is single payer. Like Vermont is in the process of doing. The sooner we eliminate the private insurance companies the sooner we begin to lower costs. Nobody has yet to explain to my what value an insurance broker brings to health care. These brokers say they are there to guide us through the very difficult process of selecting the proper plan to fit our needs. That’s a bunch of tripe! Once we have the exchanges up and running and the process of selecting a plan is idiot proof, these brokers had better find work. Maybe in used car sales.

          • Robert Bowman

            First, to be innovative you have to have workforce in primary care and you have to support that workforce. The design does not do that now, the new design is about shared savings which is cost cutting, the old and new designs fail for 200 million Americans in 30,000 zip codes already low or lowest in workforce.

            Accountable Care is another change as in the past 30 years of cost cutting designs that will allow the biggest to get bigger and will result in those focused on delivering basic services even further left behind, along with most Americans.

            You cannot squeeze more health spending out of lowest paid primary care and least spending per capita populations.

            Worst of all, the oldest Americans are the worst possible investment for better health as a people or a nation. Only investments in the youngest in the first months and years of life have any real return on investment

            If you really want to save money, the route is bottom up, as in Southcentral Foundation where grassroots efforts to support patients have naturally resulted in 50% or greater savings on the most expensive care – but this is a Road Never Travelled for the biggest and baddest.

        • Anonymous

          The solo doc will never go away because that is what people want and that is what many, many doctors want. I lead town hall meetings nationally and this is a theme I consistently hear. Just because experts, consultants, and policy wonks want ACOs and have the bigger-is-better philosophy doesn’t mean big-bix clinics clinics with teams is the only way to practice medicine.

          And frankly, I did not become a doctor to be the manager of a team.  I’d rather quit medicine and go back to waitressing (which is what I did in 2004 before I put my community in charge of designing their own clinic):

          There is enough room for a variety of models. I do not happen to agree that a large hospital-baased ACO model with salaried docs will ever be as efficient as a lean, small-town, homegrown Marcus-Welby solo practice. 

          • Anonymous

            The solo doc will never go away? Probably not! There will probably always be a niche market for the very wealthy in our society. Let’s face it, the 1 percent in our society will never completely disappear and will always have the money to buy anything they want. As for the hundreds of millions of Americans struggling to pay the rent, buy some food and still get to see someone for that pain they have as a result of the cancer operation their insurance company denied, an ACO will be welcome relief. The ACO model can be likened to what happened to the many small corner stores when WalMart or Home Depot moved into the neighborhood. There will be less designer choices for the wealthy but life for the average working class consumer will improve.

          • Anonymous

            So ya think Marcus Welby was just treating the wealthy?  None of my patients are in the 1% and they pay no additional fees to get good old-fashioned family medicine right in the neighborhood.

          • Anonymous

            LOL with your boutique medical practice. However, if you want my opinion, you are in denial. The ACO model is coming. Big-box health care will be the delivery model for the future and smart docs see it coming and they are preparing.

          • Anonymous

            LOL – ain’t boutique babe. . . 

        • Anonymous

          ACO’s to assist seniors to remain healthy sounds wonderful! I’m not sure doctors receive training in how to keep people healthy. I suppose taking care of easy-to-treat illnesses is a big help, cookie-cutter treatment. It also sounds a like the seniors who are not healthy would not have top care. It wouldn’t pay. It would be profitable for chronically ill patients die, STAT. I’m newly retired nurse. If I were to become sick, I think I’d have to go back to work to receive top health care. And even then, ageism and sexism and class might go against my receiving top care with many doctors. Getting old in American when you’re not wealthy and not a politician is risky business. Seniors are second class citizens…it’s like being a woman is an Islamic country I guess. Have I got it wrong about ACO’s?

  • Mike Sevilla, MD

    Just wanted to say thanks to Dr. Pho for cross posting my essay, and thanks to you who have left comments, given Facebook likes/comments, retweets, and other feedback. I really appreciate it!

  • Steven Reznick

    Well written. Down here in South Florida 90% of our patients are Medicare patients. The SGR reckoning will essentially destroy some young practices and force older docs to retire early. It is too complex a problem to blame Democrats and Republicans alone.. It involves over valued procedures of minor risk, entitlement of our greatest generation using their money and political clout to drink the well dry without them having to pay for their excesses. It involves defensive medicine out of fear of litigation becoming so ingrained in the daily practice that physicians have difficulty separating out which tests and procedures they need to make an diagnosis and which they do routinely to cover their rears. It includes years of Medicare generated rules and bureaucracy that raise the cost of physicians doing business leaving them with few outlets if any to make up the extra costs. The sheer size of the reduction in one  fell swoop is a loss which no business or professional operation in any industry can sustain if executed with less than five years or more to readjust your practice style. If the cuts go through I fear what will happen when I need to refer my patients to a medical or surgical specialist and there are few if any who will accept Medicare patients.

    • Anonymous

      There really are not that many of the Greatest Generation left.  The bulk of today’s elders are members of the Silent Generation, those who came of age during and after WWII.  They enjoyed many of the benefits of that era…. increased incomes, great benefits with many having defined benefit pensions, and many paid into Medicare for a limited number of years and received incredible benefits.  My own parents only paid in for about 22 years before retiring.  I have paid into it for 35 years… so far.  Everyone has the sense of entitlement because we all “paid into it”.  It irks me that people making minimum wage are subsidizing the health care of elders who, even in retirement, may have incomes many times what the poor worker is earning.  Something truly odd about that.  I would like to see means testing for Medicare premiums. 

      • Steven Reznick

        I agree with you on the need for the more fortunate to pay a higher portion of their health care bill than the less fortunate. I think often of a former patient who has since passed on. In his early seventies he developed primary biliary cirrhosis , a non alcohol related immunological disease that required a liver transplant. He was fortunate that he was very well off and very well politically connected. The talented T Starzl MD of the U of Pittsburgh Medical Center performed the transplant and it was the oldest patient he had ever transplanted a liver into. The patient paid for the procedure in cash because Medicare did not cover the procedure. As he recovered he used his considerable talents and connections to lobby Medicare into covering liver transplants in seniors. He was reimbursed. We now perform thousands of liver transplants each year on men and women on Medicare. Each procedure costs over $500,000. It is a benefit that was extended to seniors with no thought about how to pay for it. My patient was a highly productive and compassionate man who continued to serve our society after he received his new liver. Decisions on which services to cover and who pays what are not simple. The additional years this gentleman had with his loved ones are priceless. As a society we have many tough choices ahead because the kettle is no longer full and spilling over .

      • Anonymous

        Meanwhile wealthy elders are getting “senior discounts” while many of the younger generation struggle along . . .

  • Stephanie Walter Congdon

    oooh, that’s big of them to delay the cuts a measly TWO MONTHS!  :P   SHAME ON THEM!

  • Anonymous

    What is clear is that the system for delivering healthcare must change if we are to continue honoring our commitment to those on Medicare, now and in the future.  The Medicare model of fee for service is ultimately unsustainable, even with some of the tweaks that have been suggested, such as means testing. 

    If you’ll forgive the expression, this is not brain surgery. 

    The politics is tricky, but ultimately we have no choice. 

    Many other countries manage to provide care at much lower costs with outcomes, in most cases, equal or superior to ours. Nothing need be invented. How difficult would it be to pick and choose from their models to develop one that works here? 

  • Anonymous

    Yes, that’s very obvious. Health care delivery in America is the worst in the world. The main culprit? The fee-for-service (FFS) model. FFS rewards only the healthcare provider. FFS does absolutely nothing beneficial for consumers. It’s got to go! Whatever happens to the Affordable Care Act in 2012. If the Supreme Court rules against individual mandates, the bottom line is that any future improvements to our health care system must include the elimination of the FFS model. America ranks 37th worldwide in health care efficiency and performance. America spends almost 18 percent of GDP on health care alone. America has over 50 million people that are uninsured and another estimated 25 million that are underinsured. If that is what you call “the best health care in the world”, the people saying that are insane!

    • Anonymous

      So no other developed country uses a FFS model? It’s hard to fathom everything would be fixed if we just got rid of FFS.

  • Anonymous

    I moved to a city where I have to find a new doctor and I’m on medicare.   It’s like living not having medical care…except for the money I have to pay the government that fixed it so I don’t have health care.
    No doctors want medicare patients.  But the politician have their special retirement and special medical insurance.  How did we allow this insanity. 

    • Anonymous

      These greedy docs may be having fun and getting wealthy now but the handwriting is on the wall. When the Affordable Care Act ACOs begin to open up in their neighborhoods, you will be seeing these greedy one-doc and two-doc practices closing their doors and going bankrupt in record numbers. The good news. ACOs can’t refuse Medicare patients. We will be seeing a mass migration of Medicare patients into ACOs all across America. My PCP just signed a letter of intent to join with a local hospital ACO that plans to open in the near future. He sees the handwriting. He sees that he’d better get signed up before the tsunami hits full force in 2014. 

  • Anonymous

    While the medicare cut is 30%, since overhead is approximately 50%, the true effect will be to decrease physicians’ takehome pay by 60%.  Also, many private insurers contracts are based on medicare rates, so unless private insurers are nice, contractually they can cut as well.  In short, a massive disruption to healthcare.  Also, because of the uncertainty, I can not make some important investments.  So much for job creation.

  • Anonymous

    The Affordable Care Act (ACA) can only benefit senior citizens. They are already seeing huge savings just with the new Donut Hole rules. Not to mention, students can stay on their parents health policy until age 26. How great is that? Insurance companies must spend 80 to 85 percent of each premium dollar specifically on health care delivery. That’s awesome! I can’t stand it when I hear elitist prima donna docs complaining they aren’t getting paid enough for their Medicare patients. That’s why there are several pilot Accountable Care Organization (ACO) trials in progress that include Medicare people. Soon, fee-for-service docs will not have to worry about Medicare patients. If my guess is correct, senior citizens will be flocking in droves to the big-box WalMart style and big-box Home Depot style health care that ACOs will soon be offering. The great part is, ACOs are not allowed to “cherry pick” their patients. In order to participate as an ACO, they must accept every person that walks through the front door. How dare these elitist prima donna fee-for-service doctors scare seniors with threats to cut them off and send them away! These corrupt doctors need to be put out of business! Nothing but shysters!

Most Popular