Myths & Facts about Health Care Reform Part 2: Doctors Who Take Medicare

MYTH #1:  Reform legislation calls for a 21% cut in Medicare payments to physicians.

FACT:  First, the 21% cut has nothing to do with reform legislation. Secondly, it is never going to happen.

Back in 1997 Congress passed legislation which said that if Medicare spending on physicians exceeds a complicated “Sustainable Growth Rate” (SGR) formula in a given year, Medicare fees to all doctors would be trimmed the next year. Since then, Congress actually followed the SGR formula only once. Every other year, it postponed the cuts until the following year—which is why the accumulated postponed cuts now exceed 22%.

The SGR rule was, from the beginning, a crude solution to health-care inflation. We don’t want to whack all doctors’ fees across the board. Any adjustments should be made with a scalpel, not an axe. We know that Medicare pays some doctors (primary care docs, gerontologists, palliative care specialists and general surgeons) too little while overpaying some specialists for certain services.

As I have explained here the Medicare payment schedule is regularly updated by a committee composed mainly of specialists who meet behind closed doors. Not surprisingly, they believe that their time is worth far more than the 30 minutes a primary care doctor might spend talking to a patient about quitting smoking. Thus, the gap between payment for primary care services and specialists’ services has continued to widen. 

The Medicare Payment Advisory Commission (MedPAC) has recommended that the payment schedule be readjusted with an eye to how much benefit the patient derives from the service. MedPAC also suggests targeting particularly lucrative procedures in cases where high fees may encourage overtreatment.  For example, fees for certain diagnostic tests are generous enough that some doctors have begun leasing or buying very expensive diagnostic testing equipment for their offices.  The equipment can easily cost more than a million. Research shows that these doctors then recommend twice as many tests in order to recoup the capital investment.

Meanwhile, from 2000 to 2006 Medicare spending on diagnostic imaging doubled from $7 billion to $14 billion—without any clear benefit to patients. To the contrary, we know that unneeded tests may expose patients to the dangers of excess radiation– or the risk of false positives which can lead to unnecessary treatments.

Reform legislation addresses the problem. This year, Medicare will assume that diagnostic testing equipment in a physicians’ office is being used 65% of the time –up from 50% of the time. As of January 1, 2013, Medicare will base payments on the assumption that doctors are using the equipment 75% of the time.  Since this metric determines how much doctors need to be paid to cover the cost of the equipment, the change will lead to lower reimbursements per test.  According to the Congressional Budget Office, Medicare will save $1.9 billion over ten years.

Given lower reimbursements, it is likely that in the future, many fewer doctors will buy or rent the equipment for their offices. This will help rein in health care inflation: if pricey diagnostic equipment is found primarily in hospitals or radiology centers where it is used close to 100% of the time, those who provide the testing service can afford to charge less per test, while still making a reasonable profit

In contrast to the SGR formula, which would try to save health care dollars by making blind, broad-based cuts, this is an intelligent, targeted change.

Why is the SGR formula still law? For years, Bush administration budgets assumed that Congress would enforce SGR cuts that year; this made the administration’s budget look leaner. But eventually most people in Washington understood that the SGR cuts were merely an accounting fiction. When President Obama took office, he did not include savings from SGR cuts in his initial budget. And he has proposed repealing the SGR law. The House has voted to do this.  But a fractured Senate has not yet voted to scrap the SGR formula. Instead, the Senate decided to postpone the 21% cut until October.  Meanwhile, House legislators left for vacation without voting on that extension. When Congress returns to work this week you’ll hear more about the SGR. Some commentators may pump up the story to create suspense, drama—and fear. But trust me, the SGR axe won’t fall.

Admittedly, it’s a little awkward for reform’s opponents to vote to repeal the SGR at this point in time–while simultaneously claiming that universal coverage will bankrupt the country.  It suggests that they have made a deal with the AMA. Meanwhile the physician’s guild will continue to raise the specter of devastating cuts in order to stir up the rank and file. And no doubt some physicians who never read newspapers and get their information from Fox News may actually believe that they are at risk. But informed Beltway watchers understand that the Draconian  formula will never be applied.  For more sane discussion of the topic see the Washington Post’s Ezra Klein and The New Republic’s Jonathan Chait elaborating  on why everyone agrees that the SGR cuts are a sham.

MYTH #2: Healthcare reform means that doctors will stop taking Medicare patients.

FACT:  This assertion is usually linked to the assumption that Medicare is going to slash all doctors’ fees by more than 20 percent. (See MYTH # 1). Instead, under the reform legislation Medicare will hike payments to many doctors. The AMA lists the increases:

  •   10 percent incentive payments for primary care physicians. All physicians in family medicine, general internal medicine, geriatrics and pediatrics whose Medicare charges for office, nursing facility and home visits comprise at least 60 percent of their total Medicare charges will be eligible for a 10 percent bonus payment for these services from 2011–16.
  •   10 percent incentive payments for general surgeons performing major surgery in areas where more health professionals are needed. All general surgeons who perform major procedures (with a 10- or 90-day global service period) in a health professional shortage area will be eligible for a 10 percent bonus payment for these services from 2011–16.
  •    5 percent incentive payment for mental health services. In  2010, Medicare is boosting payment for psychotherapy services by 5 percent. 
  •   Geographic payment differentials. In 2010 and 2011, Medicare will make a separate adjustment for the practice expense portion of physician payments that will benefit physicians in rural and low cost areas.
  •   In 2013 and 2014 Medicaid payments to primary care physicians will be lifted to match Medicare rates. Today, Medicaid typically pays doctors 30% less than Medicare for the same service. The federal government is providing 100% of the funding needed for states to meet this requirement.

Why don’t we ever hear about the good news for doctors on Fox?  Because Fox  News is bent on spreading the canard that, thanks to reform, seniors will lose their doctors. The truth is that many physicians will see their incomes rise, beginning next year. Why would they possibly choose to stop taking Medicare patients just when Medicare fees are climbing?

Not only will many physicians profit from increases in Medicare and Medicaid payments, they also will benefit from an influx of formerly uninsured patients who, thanks to government subsidies and new regulations will be able to seek care.  Many of these patients will suffer from pre-existing conditions; others will be low-income Americans who may not have seen a doctor for some time.

As I noted in part 1 of this post, for insurers this is bad news. These could be very expensive customers. But under health care reform, health care providers will be the winners. The AMA estimates that physicians provided $24 billion in charity care in 2008, much of it to uninsured patients. Under reform, it’s less likely that doctors will be faced with patients who cannot pay, or who show up too late for effective treatment.

Allen Mondzac, an oncologist at the George Washington University Medical Center is enthusiastic. He recently told the Washington Post that he’s preparing for a "deluge" of new patients, "I hope I'll [be] seeing earlier stages of cancer,” added Mondzac, who specializes in brain tumors and breast cancer. That people will not be afraid to go to the doctor because of the expense and will get symptoms taken care of and looked into early."

In Part 3 of Myths & Facts, I’ll discuss how reform will affect Medicare benefits as well as the premiums and co-pays that Medicare patients pay. I’ll also talk about what is likely to happen to patients who are now on Medicare Advantage. In Part 4, I’ll take a close look at the impact that reform will have on hospitals

30 thoughts on “Myths & Facts about Health Care Reform Part 2: Doctors Who Take Medicare

  1. Maggie, couple clarifications: I think in the REconciliation bill they had increased the diagnostic use to 75% rather than 65% that passed senate bill in DEc.
    Still not clear if 10 % medicare bonus for primary care is per year or 2% per year to total 10 %- from 2011-2016. There is so much misinformation on this aspect. Is this only for rural docs or anyone who does 60% primary care(for medicare) in their practice.
    Even physician sites like SERMO are spreading a lot of misinformation and when correct info is posted, they are ridiculed for supporting, very sad.

  2. Maggie
    The Mcaid bump in 2013-14 will likely evolve into something more permanent. Good thing.
    Here is a rub howevef, and I have spoken to a fairly large and diverse group of primary care docs. A major hassle in primary care is care coordination and referrals. Given that medical homes and systems evolution is a long ways away (wont take no on that front–thats a fact), most practices dont want the aggravation of getting full freight reimbursement for their fee, but in exchange for inability to refer to cards, endo, derm, ortho, neuro, etc. Docs wont have a venue for consultation.
    Their will be some practices who will give it a go and do well, but their will be tiered care present, no doubt.
    I dont think this is at all contradictory to your piece, just a missing piece in the puzzle that needs a solution. It is a huge missing piece though. The juice to squeeze ratio of taking on the sicker Medicaid patients wont be worth the time–docs will not want to self-manage a laundry list of problems that under ordinary circumstances, even in the better and efficient practices, would get farmed out to other docs for comgt.
    This will get addressed in the next iteration.

  3. Brad–
    You write: “Given that medical homes is a long ways away (won’t take no on that front . .)”
    Bad news: I have to say “no” Good news: we’ll have medical homes sooner than you think. . . The fact is that community clinics will provide medical homes for many/most Medicaid patients; The reform legislation includes $11 billion for funding,and the funding and building starts This Year. Community Clinics are expected to double the number of patients that they care for in the next 3 years. In Manhattan there is already one very good clinic serving as a medical home for many. I’m supposed to visit it in next few weeks–will report back.
    On docs taking Medicaid patients:
    I think whether primary care docs take Medicaid patients will vary greatly depending on:
    1) region of the country. (Docs in Manhattan are far less likely to take Medicaid patients than a doctor in Mississpi or Minnesota. Docs in Mississippi and Minnesota do not rely on “farming their patients out” to specialists to the same extent.
    There just aren’t as many specialiests to refer to in smaller towns and in rural areas. In general, there are not as many specialists in Iowa, Idaho, Nebraska, etc. etc. etc.
    And patients in these areas are accustomed to their primary care doctor addressing a wide variety of problems.
    2) the doctor’s background– We know that doctors from low-income backgrounds as well as African American and Latino doctors are much more likely to take Medicaid patients.
    They identify with the patients-. Members of their own families have been on Medicaid and also suffer from a “laundry list of problems.” When you look at a patient and see your grandmother, you’re less likely to think that this as “too much of a hassle.”
    A 2008 study by Cornelius, et. al. shows that 20% of doctors taking Medicaid patients are African-American or Latino. Since 20% of the nation’s physicians are not African American or Latino, this shows that these physicans take a disproprotionate share of Medicaid patients.
    (Other studies confirm this. This study also shows that outcomes for African-American patients on Medicaid are better when they see African-American doctors.)
    Another 11% of docs who take Medicaid patinets are Aisan or Pacific Islander.
    Only 67% of docs taking Medicaid patinets were white.
    The study doesn’t break out white physicians coming from low-income famlies, but other reserach shows that these physicians are far more likely to choose to practice in inner cities or poor rural areas where they will encounter more Medicaid patients.
    Another clue: 42% of these docs earn between $100,000 and $150,000 a year. 27% earn less than $100,000.
    Money is not their main motive.
    3)–Doctors who have a commitment to treating the poor won’t provide “tiered care”.
    With the enormous increase in fudning for scholarships and loan foregiveness under reform–and an awareness that we need greater diversity in our physician workforce–med school are likely to begin recruiting more low income students of all races.
    This is also a major Obama administration goal: Affirmative Action based, not on color, but on income.

  4. To Ray’s point, based on what I hear in reactions to the HCR bill from physicians, I have a feeling that most docs, and specialists in particular, are politically conservative. Has this been counted and measured anywhere?

  5. Maggie
    We will agree to disagree. In terms of the idealized medical home, we are years off. You are reading language, I am talking to docs in practices. and lots of them.
    Look at how a medical home is defined (for real) and how care is coordinated. If you wish to say “many patients are in the rural areas” and dont have access to specialists, you are selling short the power of diabetologists and others and why care in IDS’s and PCMH’s, the few that are functioning, work so well. Yes, you can find the successful country doc, but that is not reality for many of the the high cost, troublesome cases. You do need specialists. Additionally, the % of practices that are truly rural are less than a third to quarter, and not all of them are wanting in all specialties. Believe it or not, they do have subspecialists. Look at Dartmouth data (they are there, I looked).
    I am not disagreeing with what you write, it is truthful. The problem is, the bill is not going to deliver workable homes that fast, not globally.
    I will let you have the last word, and I know you will pounce on me, but if you really want to see how these homes are working, read some of the demo reports or HA on how successful implementation and component setting are going–very, very slowly; very, very unhappily, etc. In fact, read this months HA on the NJ practice adopting IT. That is the norm for next 5 years. We have a long ways to go.
    We are going to have to spend, crash and burn, and experiment for a number of years before models are scalable, exportable, and workable. This is so damn hard you have no idea.

  6. Forgot.
    On the salary thing: if you see recent Annals of IM or JAMA paper (2010) on hours worked, money earned, etc., there are big changes. We are at the marginal part of the curve on career satisfaction. Money is not everything, but the stats do bear out the folks are burning out and are frustrated. Practice hassles are literally driving docs insane, and they are cutting work hours across the board: by gender and specialty equally (that was so very interesting), because wages dont make it worthwhile.
    Also, comparing rural areas and their culture, and time it will take to evolve the urban and suburban areas, is a very, very important consideration. You have said this many times on your blog. We are not disagreeing: separate issues and problem set. Will take much longer to solve.

  7. All of what you say is true. There’s a part missing: the cuts haven’t been made, but there’s been no real growth in reimbursement for many years–I get less in some cases than what I got 10 years ago. At this point, I don’t care. After the annual cliff-hangers and uncertainty, I’m tired of wondering what implications I’ve bought into by continuing to participate in Medicare/Medicaid/TRICARE. I also have no confidence that Congress can figure out anything better than SGR. Lastly, even my own doctors are saying they may not be able to see me in the future (TRICARE). So, I’ve lost the faith for good…and I don’t think I’m the only one.
    Doc D

  8. Brad–
    I may “have no idea”, but the people who actually work community clnics do.
    I’m not reading language– I’m talking to those people–these are doctors who you wouldn’t normally meet.
    Read this article from the July/August North Carolina Medical about the “impact of community based medical homes” in North and South Carolina.
    These clinics provide care to over 70,000 low-income individuals in over 250,000 annual visits. The clnics are “providing benefit to hospitals by providing effective, efficient, patient-centered and timely care.”
    Vists to ERS have dropped significantly while visits to the clnics have risen.
    They meet all of the regs for family homes. They are open after hours, Saturday and Sunday, etc.
    They have a fast-growing Latino pop in the Carolinas so they have a bilingual staff.
    The medical homes that are struggling are not large community clinics– they are small to medium sized private practices trying to raise their incomes by becoming medical homes. A very differnt group of docs with different motives. (People working at community clinics are dedicated to caring for the poor. )
    Docs running successful clinic/ medical homes typitcally begin their careers as interns and residents who belong to cir– the union that resprents 17,000 residents and interns nationwide. Almost none train at academic medical centers– AMCs won’t let the union in. (AMCs want to be able to work their residents 16 hours or more at a time without inteference. AMCs insist that their residents are not “workers” –they are “students” and thus U.S. labor laws don’t apply to them.)
    These docs train at safety net hospitals, and go on to work at safety net hospitals and clnics.
    A fair number are black or Latino.
    They typically earn significantly less than docs who train at and work at academic medical centers and privazte hospitals.
    Community clnics are also serving as medical homes in California. To be officially designated a CC they have to provide care on a sliding scale-and free to indigent patients. ‘
    (This is not what private practices that are trying to become medical homes do.)
    As for specialists in other parts of the country, I’ve talked to the folks at Dartmouth about this– many patients rarely see a specialist.
    And Dartmouth studies show that in these parts of the coutry, preople prefer to see a primary care doc– don’t like seeing specailists.
    Another study shows that African Americans and Latino’s greatly prefer primary care docs– don’t like specialits.
    We’re not talking about a “few country docs,” Brad.
    We’re talking about a great many primary care docs. These are not people who attend medical conferences; these are not docs that you went to medical school with. (As you know, docs wind up working close to where they went to med school.)
    But they represent an army of medical professoinals who take care of a great many middle-class Americans in the heartland as well as the poor.

  9. Margait–
    Doctors tell me that better-paid docs (specialists) tend to be politically conservative.
    Quite a few doctors have told me this, and it certainly jibes with my experience. Family practioners adn pedicatiricans and gerontologists and palliative care specialists– mroe likely liberal.
    The more doctors make, the more conservative they tend to be. (They have much to conserve. Conservatives believe strongly in the right of the individual to earn and keep his earnings (with as little taxation as possible) to pass on to his children. . .
    Liberals are more likely to look at the world in collective terms–“us “(all American, including the poor) rather than “me and my family.”

  10. Doc D.–
    Your are right: Medicare fees for most physicains’ servcies have remained flat.
    Meanwhile, if your in private practice, your overhead has risen.
    But if you look at the numbers, you find that doctors incomes have risen in mmost speciallities–and risen significantlly.
    This is because doctors are “doing more”– seeing more patients, working longer hours, performing more surgeries.
    This isn’t good–many are exhausted and demoralized because they don’t have enough time with patients.
    IF we can move away from fee-for-service, docs won’t fee as much pressure to “do more”. (We also have to get away from the pressure to be “productive” in some large group practices.
    Don Berwick is very good on all of this. When he becomes head of Medicare, I think you will find that the financial incentives really do reward quality, not volume.

  11. As you write, there are many myths about health care reform. We are remarkably uneducated about what is in the legislation and of course it has a long way to go to be pout in practice with the need to write policies, regulations and the like. I have blogged about a set of “misconceptions” – essentially myths – in healthcare reform. They can be found at . Among them are that “America has the best healthcare system in the world.” This is just not true. We have a medical care not a healthcare system. It is one that is very good at dealing with acute, severe problems but much less so at caring for the increasing number of patients with complex chronic illnesses like diabetes with complications or heart failure. Another misconception is that new advances get into the practice of medicine quickly. This is also not true much of the time. Medical simulation is such a situation. Now we can learn on a simulator rather than first on a patient and the simulator can help us with our technique – such as endoscopy or laparoscopic surgery – until we are actually competent. But all too many hospitals see simulation as a new cost rather than as a means to increased quality and safety.

  12. Follow-up: I worked in a non-fee-for-service system for a long time. What you see there is just “putting in your time.” Doctors were very comfortable seeing 6-8 patients a day when there were thousands trying to access the system. You can try other incentives, but my experience is that the disconnect between price paid and price received is not addressed by any of these proposals. All this misses the point, however. I’m just tired of spending tons of time on government regulatory and reporting requirements and experiencing continued uncertainty over planning my practice. And there may be folks at the top end who are earning more, but most of my colleagues aren’t.

  13. Brad F.–
    See 2010 Health Affairs article on community clinics working very well as medical homes and how they will be expanding–“Health Centers Fill Critical Gap, Enjoy Support.”
    The “medical home” concept began as a way to provide a “home” for patients who don’t have a regular primary care physician.
    The poor, the uninsured and people on Medicaid are most likely to lack a doctor who they see on a continuing basis, who knows them, and their family.
    Community Clinics are going to be growing rapidly over the next 3 years and are already proving to be exc. homes.
    40% of the patients they see are uninsured 35% are on Medicaid.
    Many of these patients are working poor and they need a medical home that is open before and after they go to work. (They can’t just tell their boss: “I have a doctor’s appt. so I’ll be leaving at 3.”)
    This is why the regs say that medical homes must be open extended hours . . . and, if I recall, provide 24 hour phone access.
    Insured upper-middle-income patients and upper-income patients and many middle-income famlies with employer based insurance usually have a primary care doctor who they have seen over a period of time. (Though some people use their cardiologoist or gynecologist to fill this slot in their medical lives.)
    (This isn’t true everywhere– in places like Boston & NY patients may be seeing 6 or 7 different specialists and still not have a primary care doc. They prefer seeing specialits and dont’ like “gate-keepers.”
    But in most of the country, most people with employer-based insurance have a regular family practioner or internist.)
    The medical home idea wasn’t designed as a way to boost income for docs already seeing these patients. (Though I’m afraid some docs see it that way — as a financial opportunity.)
    Nor do these patients need the before and after work access.
    We don’t really need medical homes in affluent suburbs or affluent neighborhoods in cities.
    And 50-year-old docs in these areas usually aren’t willing to work Sundays, until midnight, etc.
    Docs in medium sized to fairly large private practices in these areas may get some financial help in installing electronic medical records, but I doubt many will end up meeting the requirements for medical homes.
    (They will also get bonuses if they join large accountable care organizations where they will probably be on salary or providing capitated care.)
    Finally, I remember reading an article in Health Affairs written by someone who had done in-depth reserach, visiting medical homes that worked.
    What he discovered is that they could take various forms, but the successful ones had one thing in common– a very, very strong commitment to being available for their patients, and keeping them out of the hopsital.
    If a patient had to be hospitalized, they felt that was their failure–not the patients. They all seemed to share what Don Berwick describes as the desire to “serve”– and understood “the joy of serving.”
    The burned -out docs you describe who feel they aren’t making enough money and that medical practice is becoming more and more of a hassle just don’t fit that description. They’re not happy in their profession.
    Finally, on salary– from 2004 to 2008 most doctors found that their salaries rose somewhat or stayed flat–after inflation.
    This is not true for the average American worker.
    Most importantly, median income for health care providers remained far, far above the income of 97% to 98% of all Americans.
    Even family practioners averaged $186,000 (median income.). (Primary care docs who work with the poor in underserved areas or in clinics earn significantly less– that’s where we really need to raise compensation to attract more physicians.)
    Meanwhile urologists average $383,000, orthopedeic surgeons $475,000, gastroentologists $449,000 . . .
    Yes, they are working harder–by choice, because they want to keep their income at those levels.
    If a doctor who was earning $375,000 was willing to let his income slide to $350,00, he wouldn’t have to work so hard. (And would probably be a happier person and a better doctor.) I’m pretty sure we agree on this.
    You say some are cutting back on hours–this is good. (And should also mean less unnecessary specialists’ care- tests, treatments, unnecesary surgeries, etc.) I’m pretty certain we agree there as well.

  14. Stephen–
    Thanks for the comment. I agree about these medical myths– though I would add that we are not even “the best” for most acute care.
    We over test and over treat.
    At least half of all angioplasties and bypasses provide no benefit to the patient. I could go on . .
    As Don Berwick puts it –for “rescue care”– a really complicated organ transplant, for instance, we may be the best.
    But, he points out “most of health care is not rescue care.”
    And teh simulators sound like an excellent idea.
    In the past, residients, interns etc. had to learn on someone . . .But inevitably, inexperienced docs were more likely to cause pain for patients, and in some cases actually injure them. (Atul Gawande writes about this in “Complications.”
    We know that “watch one,” “do one,” “teach one” really isn’t adequate for good patient care.
    Simulators sound like a major advance. I imagine they are very expensive, but if thousands of students could learn on them. It would seem that all large academic medical centers should have them– and share them with other hospitals in their community.

  15. Maggie
    When I read what you write, it just does not resonate. You cite one HA paper, but if you track the trend of HA in general over the last 2-3 years (I read cover to cover–I know), the predominant theme is “tough road ahead.”
    You continually cite Mayo, Intermountain, Kaiser, North Carolina, etc., and I could add about 20 more. These are the beacons that make up <1% of care in this country, and it will take time to change. They are all great, but are not representative of what is really out there.
    Once again, you are confusing my pro stance on PCMH's, ACO's and the like, but missing that culture will need to change and it will take years and lots of work. Heck, just look at WSJ today. Global implementation of much of what will be needed is not even close to full steam.
    Again, we agree on so much. A lot of what needs to happen is not PPACA dependent, but human element dependent. You cant turn 99% of the country into the ideal 1% rapidly.
    In terms of PCMHs in non-lower income communities: Slothful, obese, unhealthy living is alive and well everywhere, as well as general health illiteracy. We need diffuse implementation of these models in all regions. More so in certain zip codes, but they belong all throughout all of USA--and that is EBM driven, assuming they bear the value and savings we expect. Comes down to your speculation vs mine I suppose. That is all we are left with...although I would like to see data to support your conclusion, ie, rich communities (think Boca Raton) dont need good care coordination and 24 hour access.
    I think if you reread my posts you will find more than just fluff buried in my words.
    Anyway, thanks for hearing me out.
    ps--folks should know Maggie and I are good friends. This is a nice twist for both us 🙂

  16. “The “medical home” concept began as a way to provide a “home” for patients who don’t have a regular primary care physician.”
    Actually the medical home concept was created by the AAP to describe the optimal method of care for sick kids back in 1967. The AAFP later integrated Dr. Ed Wagner’s ideas on chronic care and we ended up with today’s model.
    Here are two nice articles:

  17. what makes you think the primary care doc will see more patients (assuming payments go up) rather than just protect their income as you call it for the specialists who work harder and harder?
    nice choice of 2004-2008 for income comparisons, btw? what happend to physician incomes verus general population from 00-2004?

  18. RE “First, the 21% cut has nothing to do with reform legislation. Secondly, it is never going to happen.” per Maggie in primary post.
    Guess I don’t need to worry about my Medicare patients –> as I understand it, sorry, I, a primary care physician, will see that 21% cut TOMORROW.
    And no, unless you work in “corporate medicine,” Family Medicine docs do NOT take home that averge $186K.
    Guess I should just give up…
    Nope, but don’t tell me what will NEVER happen…
    There are factions that feel Medicare should not survive for ANYONE, so they may get their wish. Promising me “Medicare Parity” for Medicaid pts (the state pays me $23/pt visit currently) in 2013 through 2014 will drive most primary care doctors to taking ALL CASH eventually…
    So guess I’ll just get busier, provide more services, put in bigger computer systems, spend more time with patients — YES, if I wanted to decline Medicare.
    Some things to think on…
    Dr Matlev
    Solo x 6 years.
    Family doctor x 25 years.

  19. Anonymous–
    Not sure what you’re asking in 1st quetion– word missing? Somehow it’s garbled.
    On second question: the research I found was doing comparisons going back to 2004.
    No doubt there is research going back to 2000.
    I’m sure you could find it by Googling.

  20. Dr. Matlev,
    Just curious…. Hypothetically, if Medicare isn’t cut tomorrow, and later on they increase Primary Care fees by 10% and then they pay for Medicaid exactly what they pay for Medicare, would that help in any significant way? Or is it too late…?

  21. Maggie:
    I agree that the 21-22% SGR cut isn’t going to happen. But, with the threat in place, there may be an opportunity for a worthwhile compromise. I’ve been skeptical of most pay-for-performance proposals (which mostly seem to involve just spending more $), but if we’re going to spend the SGR money anyway, why not tie some part of it to performance? Perhaps a formula could even be found that doesn’t continue to reward those docs in McAllen and Miami for over-over-utilization!

  22. Roger–
    The reform law gives Medicare authority to experiment with different payment systems–paying for outcomes, paying doctors to collaborate with hopsitals in accountable care organizations, bundling payments to doctors and hospitals and adding a bonus to the bundle if outcomes are good add the cost is reasonable. . .
    As Medicare (and other insurers) move away from fee-for-service, doctors who have been boosting their incomes by seeing as many patients as possible and doing as much to them as possible will see their incomes drop.
    Instead of a flat, across the board cut, there will be targeted cuts and targeted raises to encourage better, more efficient care.
    But net, net, we’ll save since the services we’ll be rewarding are less expensive than the excessive diagnostic testing, unnecessarily invasive procedures, etc. that we’ll be discouarging.
    The new Medicare Payment Advisory Board will be charged with making sure that Medicare spending doesn’t grow faster than the Consumer pRice Index.
    If it does, then they will be responsible for recommending cuts that will make up the difference.
    Congress can block the cuts only if Congress votes against the whole package of recommendations, AND if the president agrees with Congress. (If he disagrees, the cuts automatically become law unless Congress can come up with a 2/3 majority to overturn the President’s veto.)

  23. “The new Medicare Payment Advisory Board will be charged with making sure that Medicare spending doesn’t grow faster than the Consumer pRice Index.
    If it does, then they will be responsible for recommending cuts that will make up the difference.”
    I don’t have much confidence that this will work any better than the SGR fiasco. I would have more confidence if the MPAB had the power (and used it) to refuse to pay for certain tests, procedures, drugs and devices altogether based on cost-effectiveness rather than just tinkering with payment rates but continuing to have Medicare cover them.

  24. Barry–
    The SRG was a dumb idea because it calls for across-the board cuts without looking at the effectiveness of the treatment.
    The new Board will be looking at the comparative effectiveness reserach that another federally funded group will be using–and they will be using it to decide where to cut.
    In other words, they’ll be doing what I think both you and I think they should be doing–making cuts based on value to the patient.
    They will be able to cut payments for drugs as well as test and procedures.
    And it will be very hard for Congress(and lobbyists)to stop these cuts.

  25. I like Roger’s idea better. Tying payments, maybe in the form of bonuses, to quality outcomes seems doable.
    On the other hand, what are the assurances that the new Board will indeed be making cuts based on value to the patient, and not based on costs to Medicare? It is an awfully gray area and no matter what they cut, their decisions will be exploited for political gains by those who opposed this reform.

  26. Margalit–
    The new board will be made up of health care experts of various types. They are expected to use medical evidence about overtreatment (as well as comparative effectiveness research) to decide where to make cuts.
    For instance, if comparative effectiveness reserach shows that new Drug A is no more effective than Drug B (but costs $200 while Drug A cost $50) the Board would be likely to recommend that Medicare pay no more than $50. If the patient wants Drug A he would have it, but would have to pay the difference himself.
    In the case of diagnostic testing, Medicare itself has already determined that docs with equipment in their offices are ordering twice as many tests–which suggests over-treatment. Medical evidence also suggests that we should be concerned about excessive radiation as the number of CT scans spirals. So Medicare itself is cutting fees in these areas.
    We already have medical evidence pointing to a great deal of low-hanging fruit in the form of wasteful, unnecessary tests and procedures . . . There’s pretty much of a consensus that 1/3 of our Medicare dollars are spent on treatments that don’t benefit patients.
    No doubt some of the board’s decisions will be controversial (people who make money on unncessary treatments won’t like them), but since the boad will be made up of health care experts they are much more likely than Congresmen to base their decisions on medical science. Very, very few Congressmen are medical experts; they are elected officials who need campaign contributions from lobbyists. (The members of the panel are not running for office and so don’t need to worry about angering indusry lobbyists.)

  27. I’d like to believe that the Independent Payment Advisory Board will rein in Medicare costs, and maybe even influence medical cost trends generally. (The AMA’s vigorous opposition to the IPAB does give me some hope that it might be effective.)
    However, thirty years of involvement in government health care programs makes me all too aware of the limitations of the IPAB language in the reform legislation. For example:
    1. All fifteen members of the IPAB are subject to Senate confirmation. (Wait till the lobbyists get to work on eliminating any candidate who might be seen as a threat to provider incomes.)
    2. IPAB recommendations will still be subject to Congressional approval. If they are rejected and the rejection is not vetoed by the President, the IPAB proposals will die. (More opportunities for lobbyists here to make every IPAB recommendation a mini-rerun of the 2009-2010 reform debate.)
    3. Because the target expenditure growth rates won’t be meaningful until 2018, we are likely to see another eight years of Medicare overutilization and overspending. (And you can bet that the threat of a cap on spending growth will result in MORE spending in the years between now and 2018.)
    So, my fingers are still crossed, but I’m getting ready to be disappointed. Again.

  28. There is a major disparity between a specialist and a General Practitioner in the US.
    An Orthopedic surgeon can make as much as 20-39k easy with a single back surgery alone while that could be a gross income for a Primary care office for the entire month. After paying the staff, billers and insurance there is not much left as salary…that is the reality these days in general medicine.
    So a specialist pays off his med school loan in 2-3 years while it takes a primary care doc good 30 years to pay off the same loan… Is that called fair I wonder?
    Also many invisible unpaid part of primary care practice is writing letters on patients behalf, calling pharmacy, discussing cases with visiting nurses and so on..these activities can account for a huge amount of time…and it is not reimbursed…..
    Until the disparity in pay is fixed, more med school grads will seek specialization period!