Saturday, July 12, 2008

Medicare Realities

Medicare Realities

This week’s U.S. Senate rejection of 10.6% physician Medicare cuts brings to mind certain realities.

• Medicare costs remain out of control and are still unsustainable

• The central issues in the Senate debate were: One, the $20 billion the cuts would have saved Medicare; Two, Medicare Advantage outlays through the lack of cuts would have required trimming of outlays for managed care giants as Humana, Wellpoint, and UnitedHealthGroup.

• In the current political climate, physicians are more popular than health plans – an industry many have come to hate. Restoring the cuts was an opportunity for Democrats to make political hay.

• The AMA’s strategy of attacking 10 Republican Senators in their home states who would have made the cuts possible through negative ads worked.

• The “fury” of doctors over the unfairness of the cuts was palpable and effective. In a survey of 1100 doctors, 70% said they would consider “cash only’ practices, and another 60% said they consider careers outside of medicine.

• The looming physician shortage is the Achilles Heel of proposed expansions of care: universal coverage is not the same as universal access, and indeed, may bear little relationship with it. If you can’t find a doctor to care for you, universal coverage is meaningless.

• CMS’s huge bureaucracy (its budget is the 5th largest in the world) and its 150.000+ pages of rules, regulations, and compliance measures and fines sometimes impedes or blocks marketplace innovations.

• Medicare and Medicaid still cover only about 1/3 of the U.S. population, and more and more, higher copays and deductibles and Medicare supplementplans are required to pay for the costs. The Achilles Heel of federal and state programs to cover the uninsured and underinsured is increasingly the looming and escalating doctor shortage, particularly of primary care physicians. Again, expanded coverage doesn’t equate with expanded access, if physicians are in short supply or refuse to accept new patients covered by federal programs.

• Medicare, now 43 years old, will face an onslaught of older baby boomers by its 50th birthday. If physicians, confronted by lower reimbursements, arcane rules that increase cost of doing business , Medicare refusal to pay for common complications such a venous thromboses, and widespread impositions of protocols, pay for performances measures, and exclusion of physicians based on “quality, “ access to care may be threatened. Doctors may simply to choose cash only practices, concierge arrangements, refusal to see Medicare and Medicaid patients, or withdrawing from practice. Medicare is here to stay. It has public, bipartisan, and physician support, but it needs to adjust to physician practice realities.

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