Why the debt ceiling deal is a horrific outcome for physicians


If you’re a physician or hospital that relies on Medicare payments, grim times are ahead.  Yes, even worse than the scheduled 29% payment cut that’s scheduled to go into effect in 2013.  Emergency physician Shadowfax calls the debt deal “a terrible deal for health care providers.”

Under the contentious debt ceiling agreement, significant cuts in Medicare dollars will be made.  But beneficiaries are mostly protected.  Instead, it’s the physicians and hospitals who will be affected the most.

According to Politico,

Under terms of the hurried deal, the 12-member joint committee would be charged with crafting proposals that trim at least $1.2 trillion in federal spending over the next decade. Those savings could be found in a number of programs, including Medicare and especially Medicaid, which the White House has signaled it would be open to.”

If the panel can’t come up with enough savings, automatic cuts would go into effect. Medicaid, Social Security and veterans’ benefits would be protected. But providers could see a 2 percent cut in Medicare reimbursement.

Worse, if the Congressional super committee cannot come to an agreement, a “trigger” will automatically make draconian Medicare cuts.  And, yes, those cuts will specifically target provider payments.

The trigger is meant to be unappealing to both political parties, in order to incentivize them to come to a deal.  For conservatives, that means deep cuts in military spending.

But for Democrats, the cuts in Medicare primarily targets providers and hospitals, and leaves beneficiaries mostly untouched.  That doesn’t seem too unappealing for progressives, as most believe physicians are overpaid anyways.  That’s why some are saying Democrats may even prefer the trigger to a deal.

Furthermore, Politico also notes that the decision whether to “trigger” deep provider Medicare payments come at the same time as extending the doc fix.

To put it in plain terms, I wouldn’t be surprised to see deep cuts in provider and hospital Medicare payments, on top of the previously scheduled 29% cut sans doc fix.  We’re talking a combined 30-40% cut or more.  So, if Medicare patients are having a hard time finding a doctor now, it’s nothing compared to the shortages that will come soon.

Recently, Michael Zhuang wrote that the physician lobby was suspiciouly quiet during the debt ceiling debate:

Compared to lawyers, the insurance industry, and even seniors, time and time again physicians have failed to make their voices heard. No wonder their interests get sacrificed in every political turn of events.

Now that we know the outcome, and the horrific impact on Medicare providers, it’s clear that we’ve paid a steep price for our silence.

 is an internal medicine physician and on the Board of Contributors at USA Today.  He is founder and editor of KevinMD.com, also on FacebookTwitterGoogle+, and LinkedIn.


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