The Threat of Medicare Paycuts To Physicians Shows Need for Change
The administration had a 10.6 % physician fee cut that would have taken effect on July 1st but now is in question. The House of Representatives passed a bill that would hold off on the physician pay cuts for 1 and 1/2 years by taking money from funds used to pay private insurers for those Medicare recipients who go with a privately run plan instead of regular Medicare. Apparently other types of providers like physical therapists will still see cuts. Congress recessed for the July 4th holiday with the Senate in turmoil about what to do. The Bush Administration has threatened a veto because of the private option cuts but is giving doctors a 10 day freeze on Medicare rates to see if a compromise can be carried out according to Paul Kane at the Washington Post.
Budget deficits, expensive technology, the “graying” of America, the shrinking workforce and increasing retirement population all play a role in our evolving health care crisis. It was reported in 2005 by National Public Radio that the fastest growing age group in our country was people over age 85. The reality is that we can not continue to spend the same amount of money per person that we are now and things must change. The Board of Trustees for Medicare and Social Security reported in The New York Times that Medicare would go broke by 2019. They recommended that the FICA or payroll tax be doubled from 2.9% to 6.4% just for the plan to survive in addition to the combined premiums paid by enrollees averaging over $500 per month.
There is been some concern in the press that doctors will stop seeing Medicare patients due to the cuts. Most doctors who treat Medicare patients do not really have an option since their specialties really depend upon elderly patients. This will however create more pressure on them to spend less time with patients and avoid complicated cases.
Fifteen to twenty years ago overhead costs were not really important to doctors but not so today. Office rent, employee salary, malpractice insurance, equipment (both medical and office) have all been going up steadily while reimbursement per patient contact has consistently declined. The depth of experience and sophisticated training required of many doctor’s office employees demands that they be paid high salaries that would surprise the general public.
The majority of employees in the doctor’s office deal not with patient care but with records and billing. Medicare requires keeping detailed exacting records and following meticulous extensive processes to get paid. Doctors and their employees must regularly attend courses on the government’s coding systems and employ expensive computer systems to send in their billing. Despite the so-called clarity that should occur by using universal coding language and speedy electronic submission, it still happens that claim after claim must be resubmitted time after time till it eventually gets paid. The government continues to believe that fraud and “bad billing” occurs in the billions of dollars so it keeps the pressure on providers to prove necessity and document treatment. Off the record, an acquaintance familiar with FBI practice told me that the FBI got involved in Medicare billing fraud cases because they get $2 dollars back for every dollar they spend in investigation.
The system is clearly broken and needs to be scraped. The economic model of individual practitioners having separate practices will no longer work. I have to admit this was predicted by Dr. Arnold Relman, Professor at Harvard Medical School and Editor for the New England Journal of Medicine, when I was a student there so many years ago. Each doctor paying for his own staff, waiting room, billing equipment and the government overseeing hundreds of thousands of individual practices is wasting valuable resources on administration costs rather that patient care. But this will also mean that individual care will likely become more of team concept; that having “Marcus Welby, M.D.” always ready to drop whatever he is doing and personally attend to his patients will become just a television memory.
To make medicine more economically efficient there will need to ultimately be large scale consolidation of medical practices. Organized medicine in all specialties has made great strides in moving towards guidelines of treatment which help in health care quality and planning assessment.
The huge beast of private insurer inquisition which functions not only for its own benefit but also secondarily draws enormous administrative funds out of Medicare needs to be tamed. Health care CEO’s are reporting bonuses in the millions of dollars as are their health insurance companies which are “running” private Medicare programs.
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