Thursday, February 9, 2012

The SGR Has Failed

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An Editor’s Advice

February 9, 2012 - The Congressional formula for paying doctors and keeping health costs down, the SGR (Sustainable Growth Rate) Formula, has failed.

• It has failed because Congress can’t figure out how to fix it without busting the budget.

• It has failed because if the SGR were to go into effect this year with a 27.4% cut in doctor pay, physicians would flee Medicare and Medicaid in droves, leaving in its wake recipients of these entitlement programs without doctors to care for them

• It has failed because Congress has had to back off its implementation each year for the last 10 years, for fear of alienating seniors by depriving them of access to doctors, two-thirds of whom receive Medicare payments.

• It has failed because it fails to address the problem, indeed it exaggerates it, of a looming physician shortage, now 50,000, and growing daily.

• It has failed because it ignores the fact that physician incomes have remained flat for the last decade while practice expenses have risen 3-5% annually.

• It has failed because it fails to take into account that the typical medical school student now graduates with a debt of $150,000, the highest in the world

• It has failed because repaying this debt draws inordinate numbers of medical students into specialties in order to repay that debt.

• It has failed because Congress fails to acknowledge the present coding system, which it signs off on, underpays primary care physicians and requires the average doctor to hire a staff of 2 or 4 to figure out how to be paid.

• It has failed because it cannot admit that any government general formula, like the SGR, or the soon to fail ACO, has so far failed to save government or taxpayers money.

• It has failed because it fails to address the insatiable thirst of the public for access to doctors and for the technologies only they can deliver.

• It has failed because it fails to answer fundamental fairness questions, such as, “Is it fair that policies taxing America’s “rich,” those making over $200,000, which include many physicians, has caused the American “rich” to pay more in taxes than any other country in the world, including socialistic Sweden? Is it fair that the 3 richest zip codes in the U.S. are Washington, D.C. zip codes? (Stephen Moore, “A Fairness Quiz for the President,” Wall Street Journal, February 6, 2012).

• It has failed to show it understands that Medicare will go broke soon and that decreasing doctor pay will not ward off Medicare bankruptcy.

• It has also failed to say you cannot pay for the SGR fix by cutting hospital Medicare and Medicaid payments.

• It has failed to consider the alternative of “competition and market forces,” whose supporters have offered innovative ideas to save taxpayers and the government money.

There, I have said it. I will stop now.


Kaiser Health News – February 9, 2012 – 1. “Congress Struggles to Tackle Doc Fix”; 2) Discussion of SGR Fix Heats Up.”

The SGR formula, enacted by Congress in 1997, to contain doctor pay, has failed to lower costs and instead drives doctors out of practice.

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