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Thursday, November 18, 2010

The sky is falling! Medicare payments to physicians will be cut by 24.9% on December 1, 2010!

Since Medicare, the single payer health insurance program for citizens age 65 and over, was signed into law in 1965, medical care for seniors has become more universally available and increasingly expensive. Since Medicare insurance looked to doctors and senior citizens like a blank check, services offered to older Americans rapidly expanded as did their unit cost and consumption of those services. The American government has tried various schemes for reining in spending, none of which have been popular or effective. In 1998, we decided to try the "sustainable growth rate" formula to control costs. Under that law, Medicare expenses were allowed to rise a certain amount, that which was considered to be a sustainable amount, based on inflation and other costs, and if those costs rose by more than the target, reimbursement for services under medicare would be reduced for the next year to an extent that the target of reasonable cost increases could be reached.

In 2002, Medicare payments were reduced by 4.8%, meaning that doctors who treated medicare patients, patients who already paid less than most patients insured privately, received a pay cut relative to the previous year. Many doctors decided that they could no longer accept Medicare insurance, and stopped seeing patients whose only insurance was Medicare. This was an ugly scene, with unhappy doctors and unhappy seniors.  After that time, each year's Medicare expenses have exceeded targets and congress has stepped in at the last minute and staved off cuts to Medicare reimbursement. Each year that the cuts are delayed, they are added to the next years planned cuts. Now, by the sustainable growth rate formula, doctors' reimbursements for treating Medicare patients are slated to go down 24.9% by December 1st.

Doctors are wringing their hands, sending letters to their patients and predicting terrible outcomes for the care of seniors. They are also expecting, once again, that congress will step in and avert this crisis. And of course we will be saved again from this cut because the cut is now unimaginably huge. Congress has promised a fix to the sustainable growth rate formula, because this last minute reprieve thing has gotten ridiculous and is a colossal waste of time and effort. But the problem is not the SGR, but rather that providers of care for patients with Medicare do nothing substantial, year after year, to control costs.

Oooh. Saying that could really get me in trouble with my doctor friends.Why, they might ask, is it up to us, who work so hard for such small reimbursement, to reduce Medicare costs? The answer is that nobody else appears to know how to do it, that we have a major stake in making sure that this system works, and that we have large organizations such as the AMA which have the manpower, political clout and most importantly knowledge of the situation to do the job. Congress doesn't know how to do it. They aren't medical. Patients can't do it. It's really up to us.

Where, then, is the waste? Won't we have to deny care to people who need and deserve it in order to cut Medicare costs? Absolutely not. We do so much in medicine that is unnecessary, from CAT scans that are not indicated, to surgeries that don't help, to high tech care at the end of life that was never what the patient wanted, that cutting even a fraction of it would be adequate to balance the budget. Many of the small projects funded by the health care reform bill will help, but the process is by no means on autopilot.

Yesterday I received in the mail the summary of Medicare benefits for my father in law who died in a local nursing home of pneumonia this summer at the age of 90. Both he and my mother in law had become demented, him from multiple strokes and her from Alzheimer's disease. They were at a nursing home where the care is excellent and where they know both me and my husband well. So when I saw that he had been charged over 200 dollars a day for "oral function therapy" which I have determined consisted of having a therapist coach him on eating, I was surprised and disappointed. In the bill I saw, he had charges for this and for speech and hearing therapy which over the course of 2 weeks during which he was mainly doing the work of dying, added up to over $2600. It is, of course, hard to interpret these bills, but it looks like Medicare shelled out something over $1000 for these therapies. That's a lot of money. But multiplied by the over 1.4 million people in nursing homes in the US, it starts to be real money, to the tune of $1.4 billion dollars a year. This particular item is only a tiny issue compared to all of the other nursing home related waste, and nursing home related waste is a mere speck on the horizon of total Medicare waste. The total budget for Medicare in 2010 is about 380 billion dollars, and it really looks to me like cutting 25% of this would not be hard, if we paid attention.

The question that is left for me at this point is what to do about this specific bill. I am in the same situation as many people who get billing statements from insurance companies. The amount that the insurance company leaves for the consumer is pretty small, and I'm tempted to just leave the whole thing alone, after notifying everyone at the nursing home and everyone who is a doctor who will listen exactly what these therapies end up costing.  If I call a fraud and abuse hotline at Medicare, they might come down hard on a nursing home that I think is excellent, and the real problem, which is that this sort of thing is going on everywhere, will go unaddressed.  If it was my nickel, I would never let something like this go. With an insurance company acting as an intermediary, though, the motivation for an individual, who actually knows the value of the service being given, to make the kind of fuss it takes to reduce costs, is limited.

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