As the country begins the process of implementing national health care reform, there is one very blatant, obvious and important health care issue left unaddressed by the Congress - over and over again. It affects all Americans, but particularly those on Medicare.
This ignored problem is the unfair and outdated method used to pay physicians under the Medicare program, called the "sustainable growth rate" (SGR). Since the passage of the Balanced Budget Act of 1997, physician fees have been tied to Medicare spending for all physician services and the growth rate for the overall economy. If more ill Medicare patients see more physicians, fees are limited. If the economy falters, so will physician reimbursements. No other providers of Medicare services have been treated in such a singularly unfair way. In fact, nearly everyone, including critics of physicians, members of Congress and even Medicare trustees seem to agree that this SGR formula must be fixed. In doing so, it would also help alleviate a potentially serious access to care problem for Medicare recipients. How will access be impacted and why should America's patients care?
Because of the flawed SGR formula, physician fees under Medicare are scheduled to be reduced by a whopping 23 percent, effective December 1, 2010, followed by an additional 6 percent cut on January 1,2011 - unless Congress acts before that deadline. Congress could have fixed the problem several times earlier this year, but each time elected to take a pass and, instead, invoked a temporary extension. Hence, the December 1st day of reckoning.
In a comprehensive physician survey undertaken two years ago by The Physicians Foundation - and at a time when physicians faced a 10.6 percent cut in Medicare reimbursements (later averted) - 81 percent of respondents replied that such a cut would be unsustainable to their office overhead. And a recent survey of Texas physicians found that over half of the respondents would be forced to lay off staff or limit their Medicare caseload in response to the Medicare payment cuts. Fast forward to this summer of 2010, where they now face more than double that "unsustainable" number which will take effect less than five months from now on December 1st.
Physicians will then have no choice but to limit their Medicare patient load and add younger commercially insured patients. Since insurer payments tend to reflect Medicare payment rates, the 23 percent cut would likely result in lower physician fees for their commercially insured patients, as well - a double whammy! The present physician shortage will pale by comparison to future years should that nightmare scenario occur on December 1st.
Not surprisingly, Americans have become more and more skeptical of their government. Add to that skepticism Congressional inaction generally, and its inability or unwillingness to fix the fatally flawed SGR which threatens patient access to care, and we are reminded of Milton Friedman's comment that, "if you put the federal government in charge of the Sahara Desert, in five years there would be a shortage of sand."
We do not wish to pile on Congress or the federal government, especially during these stressful times for everyone, but there comes a time when those representatives elected by the people have to step up from both sides of the aisle and do the right thing for America's patients. As a general once noted, drink heavily from the chalice of courage, if that's what it takes.
Patients, particularly Medicare recipients, will find it increasingly difficult to find a physician if this onerous, Draconian and extremely unfair 23 percent reduction is not stopped and substituted with an SGR fix. Putting off the decision only exacerbates the problem and makes it that much more difficult to finance.
Many physicians today operate financially marginal practices, and they will be the first to go unless a solution emerges. As Will Durant said: "The health of nations is more important than the wealth of nations."
Congress, are you listening?
Louis J. Goodman, PhD is President and Timothy B. Norbeck is Executive Director of The Physicians Foundation, a national nonprofit that advances the work of practicing physicians.