Ted Kennedy comes back to the Senate in order to block cuts in Medicare payments for doctors. The New York Times rather gleefully calls this a stinging defeat for Republicans. This makes it sound as if the whole thing were some sort of glorified athletic contest, where the important thing is that our team wins. But the question is rather more important than that. Basically in the late 1990s Congress passed a law tying Medicare payouts to GDP--if they grow too fast, relative to GDP, reimbursements automatically drop. Ted Kennedy came back from medical leave to override that automatic cut, just as Congress has every year in recent years.
All very well, and many physicians will tell you that they just can't afford to treat Medicare patients for much less. But this--not some bogeyman in a pharma marketing department--is why the cost of Medicare is rising so fast. If we don't have the political courage to slash reimbursements, or to ration care, then the Democrats should give up any pretense that they are going to slow the growth of entitlements, and just admit that they're for the thing growing as fast as it can, forever.
Thank you. The minute the loudest advocates for health care reform start to plainly identify which voters are going to face more rationing than is currently the case, especially regards to Medicare recipients, that will be the minute that their rhetoric deserves serious consideration.
Is the reimbursement problem something that salaries for doctors would fix? I'm not sure how that would work... but it sounds like it take away the reimbursement incentive. And isn't the problem with the high deductible/HSA plans that consumers are poor judges of what care they need, but if a doctor's income wasn't tied to the number of tests she ordered, they'll order fewer unnecessary procedures.
The Church of Universal Coverage frequently points to medicare's low administrative costs, which is apparently calculated as a percentage of total outlays. Given the out of control growth in spending, low administrative costs are hardly surprising; it doesn't take much paperwork to throw money around to anybody who asks for it.
Hey, give Teddy a break.....he only has so many votes left to cast, and then he'll be left to his legacy.........splash..........
If they didn't do this, more and more doctors would turn away Medicaire patients, and many already do-- the same situation that led to the death of that boy who died of a toothache. Maybe the point isn't to grow entitlements, but to make sure that the entitlements we already have aren't worthless.
I think the central argument had to do with Medicare carve out private insurance vs. straight physician reimbursement. The Republicans wanted more support for the managed care companies which do monitor hospital stays perhaps better, manage cost via formularies. The money was going to them or physician reimbursement. Meanwhile the hospitals are getting killed by 'unreimbursed' care in their ER and inpatient areas which are in a sense reimbursed by Medicare 'profit.' Because of EMTALA, the emergency medical transfer act Lalalalalalla, hospitals have to provide stabilizing care to anybody who needs 'stabilizing care.'
Michael is very close to the dilemma. Bush will veto the Medicare salvage bill because it takes money away from private insurers and gives it to doctors. Doctors have not had any cost of living raise in over ten years while their staffing costs and overhead have risen faster than inflation. Without an override, doctors' reimbursement under Medicare will drop 10.6%!
Megan says we need to simply "cut reimbursement" and make Medicare solvent, but which reimbursement really needs to be cut? Pharma and durable medical supplies and nurse's salaries, etc, etc are never on the block-- only doctors' salaries.
What is worse is that physician reimbursement from private insurance is declining as well, and the numbers of uninsured are rising, all factors that are pinching doctors even more.
I know, I know... nobody will ever cry over the wealthy doctors losing salary, but the message is loud and clear: young and talented people, stay away from medicine! You'll spend your entire professional life begging the government for a cost of living raise that will never come.
Megan,
The main reason that Medicare costs are going up is utilization frequency, not costs of individual procedures.
Medicare has not changed its payment per RVU since, I believe, 2005. It has paid a little under $38/RVU for 3.5yrs now. While it is true that the RVUs may change somewhat year-to-year, for any particular procedure they may usually increase or decrease only slightly. (Medicare did change its method of calculating RVUs in 2007 which had some significant impact to some procedures, but overall didn't change things much)
The biggest drivers are new technologies and procedures which become covered by Medicare, and the increasing numbers of people covered by Medicare. Lets face it--in the past, people died younger and quicker. Now, we survive longer and especially hang on longer in our last, most expensive (healthcare cost-wise) days.
I think Megan misses the point here. This is not about rationing care. Rationing care says that some treatments shouldn't be reimbursed or individuals need to pay more out of pocket if they want those treatments.
It's not telling doctors that, if you accept Medicare there will be certain cases they where doctors will lose money after treating patients. Doing that will guarantee fewer doctors can use accept Medicare patients and will crash that system. If you belive Medicare shouldn't exist, then say that's your goal and don't parse it in terms of rationing care.
dd, I believe you're missing the point. If as many proponents claim, single-payer health care is going to actually save money , it either has to pay less for service (cut reimbursements) or provide fewer services (ration care).
This vote demonstrates that there's no will to cut reimbursement. Nor is their any will to ration care. Therefore, national health care will not reduce costs.
Now if your goal is not to contain costs, but simply to provide health care irrespective of cost, then given the demonstrated inability to constrain costs, single-payer health care doesn't resolve the nation's health care funding dilemma (15% of GDP and rising). Single-payer would solve the problem for individuals today.
But solving individuals problems today would come at the cost of hurting future generations. Today's health care most likely would be paid for with debt, so future generations need to find money for their health care and debt service on the previous generation's health care.
SG,
Here's the problem with your logic. In a closed market, medicare reimbursement rates are decreased. Doctors aren't getting as much money so they lower the incomes of them selves and their staff and then pass the rest of the lower reimbursement rate to their equipment/drug suppliers who are now also required to pay less.
Unfortunately, both the equipment/drug suppliers and the doctors aren't bound to stay in the medicare system. Instead of accepting less money, they can just leave the system. Thus lowering global medicare reimbursement rates minimally affects the costs of healthcare and significantly affects the number of doctors willing to accept medicare patients.
For global reimbursement rates to be powerful enough to control healthcare costs, US healthcare has to be nationalized enough for companies and doctors to lose more money if they are out of the system rather than in. Until then, the government is stuck paying the rate the rest of the market pay.
dd,
Here's the problem with your logic. Even in a single-payer system, the market's not closed. You're assuming that provider's choice is between being in the nationalized health care system and the private health care system, but there's a third choice. Doctors, nurses, pharmaceutical companies and medical equipment manufacturers can all decide to leave the health care field entirely in response to reduced payments.
This is not theoretical. Look at Britain's shortage of doctors and nurses or the waits for MRIs in Canada. Doctors, nurses, and biomedical companies have other options. If you cut their return enough, they will find other ways to make a living.
I don't deny a single payer system could reduce costs, but over the long run any substantive costs savings are going to come from people not getting care. That's how you reduce cost, you reduce the amount you're consuming.
A nationalized health care probably wouldn't have formal rationing, but more like Canada where you're triaged and queued up. Everyone suffers somewhat and some number of people die while waiting for service.
A convincing argument can be made that such a system is a more fair way to allocate (and bound) our health care spending than letting the wealthy and insured jump to the front of the queue while the poor and uninsured go without (or go to the emergency room). As a practical matter though, there are probably more people today who would stand to lose from such a system than stand to gain, but as health care costs keep rising faster than inflation, that political balance swings against the current system more and more with each passing day.
All I'm saying is there's just no magic wand waiting to be waved. If we want to spend less, we'll get less.
A few points:
1) Megan's right; Congress has repeatedly intervened to stop Medicare physician payment cuts, despite the reimbursement formula. It's worth note, however, that physicians are the *only* provider in Medicare with this kind of restrictive payment formula. Hospitals, for example, get a full 3-3.5% update every year under current law.
2) Margaret: historically, doctors have SCREAMED about the idea of salaries. Most like their independence and like running their own practices and hate dealing with insurance companies. There's always going to be a sector like Kaiser (completely managed, closed system) but it's the exception.
3) Tony, however, makes a mistake by assuming that pharmaceutical prices, durable medical equipment and nurse's salaries are never "on the block." Pharma prices are under constant negotiation with pharmacy benefit managers, as opposed to the administered prices in fee-for-service Medicare, for one example. Nurses' salaries are included in the bundled hospital payment, not subject to separate Congressional fiat like doctors. DME is another story entirely - there's a competitive bidding program that was just delayed because of patient access concerns, but prices are poised to come waaaaay down once CB goes through.
4) Rosebud's largely right about the role of technology.
5) Bottom line, this bill is a good thing. The flawed reimbursement formula is a major problem. There's no logical connection between Medicare physician spending and GDP, and yet payments are tied to it. It doesn't make sense, particularly when doctors are being asked to do more - disease management, care coordination, things like that. As care becomes more ambulatory, too, and procedures move out of hospitals to doctors' offices, physician spending goes up more than it otherwise would - but we want that to happen because hospitals are such an expensive care setting. The SGR payment formula is terrible and needs to be replaced, but getting THAT done is a tremendously difficult proposition.
I could go on for hours in this area...
Tony is right: intelligent young people are turning away from medicine, at least primary care medicine. And no wonder: most of the work a primary care doctor does is uncompensated (dealing with paperwork, coordinating with specialists and social workers, etc, spending more than 2 minutes counseling someone about managing their hypertension/diabetes/emphysema etc). The cost of running a practice is not compensated by the reimbursements. You have to employ many people to deal with the unreimbursed, claims-related paperwork issues. And the truth is, Medicare pays a lot better for procedures.
My husband, who is a family doctor, told me if our kids were interested in medicine he'd do his best to talk them out of it.
The problem is, when you have a shortage of primary care doctors who are willing to manage chronic conditions and provide preventive care, those patients then show up at the ER needing bypass operations and such.
And that is definitely not cost effective.
HML: There is no logical connection between Medicare physician spending and GDP, but there sure is a connection between GDP and what we can afford to spend for medical care. However, there are two problems with the way this is done:
1) How much of the savings in Medicare expenditures comes directly from the reduced payment rates, and how much comes from patients being unable to find doctors who will work for so little? The latter effect is rationing, but a terrible kind of rationing that takes care away from patients too sick to spend hours on the phone trying to find a doctor to take their case.
2) As others have noted, the reimbursement formulas (for insurance as well as Medicare) seem to be tilted against primary care physicians, and as a result there has long been a chronic shortage of doctors in that specialty. For most of us, the effect isn't that we can't get a doctor, but that it takes a long time to get an appointment (which now and then leads to something like acute bacterial pneumonia that could have been easily stopped on the first day developing into a serious illness), and to mis-diagnoses because the doctor doesn't have time to listen to us when we do get an appointment. Once your "gatekeeper" PCP has diagnosed a likelihood of a serious illness requiring specialists, the American health care system is second to none, but we've got an idiotically undesigned system of defacto rationing by making it hard to even get to the gatekeeper.
HML,
I'll stand by my statement that reimbursement for pharma, nurse's salaries and durable medical are not on the [chopping] block, while physicians' are always being cut.
By your own admission, "Hospitals, for example, get a full 3-3.5% update every year under current law."
Physicians reimbursement thru Medicare is figured only with what remains of the trust fund after all the other entities have been paid.
The past two years the $38 per RVU number has remained steady, BUT Medicare now multiplies physician work RVU's by 0.88-- that, my friend, is a 12% pay cut.
then the Democrats should give up any pretense that they are going to slow the growth of entitlements
It was my impression that the reason the Bush admin. objected to this bill was that it was paid for by cutting reimbursement to private plans that service Medicare. In other words, the Republican position was not for lowering the doctor's reimbursement rate....on the contrary, they wanted to keep the rate but simply pay for it with deficit spending.