Thursday, October 29, 2009

The Doctor Fix

I haven't read much in the med blogosphere about the so-called doctor fix. Last week, word leaked out that a version of the Democratic health care plan included a provision that would eliminate planned Medicare cuts to physicians as mandated by a 1997 federal law. This law used a complex formula, known as the sustainable growth rate (SGR), to limit federal spending on health care. The idea was to prevent spending on health care from growing faster than the economy. The problem is that spiralling health care costs have in fact grown exponentially faster than the economy. Therefore, as demanded by the SGR formula, doctors should have seen reimbursement cuts of 20-40% over the past few years. Given the tight balance between profitability and bankruptcy that most primary care docs negotiate, such drastic cuts would lead to a near collapse of private practice as a business model. So every year, Congress passes a one time bill that defers those cuts until the next fiscal year. In the most recent iteration of Obamacare 2009, the plan was to completely do away with any future Medicare cuts for the next ten years by subsidizing the cuts with $240 billion of federal money. The problem is that this subsidy was completely unfunded (sort of like GW Bush's prescription benefit bill) and more moderate congressmen went nuts. The idea is now dead in the water.

The whole thing is amusing to me in this respect. Remember when J. James Rohack (President of the AMA) wrote a guest post on Kevin MD enthusiastically supporting Obamacare back in August, mainly because of promises to do away with any future SGR cuts? I can't wait to read his follow up piece. Tort reform gets taken off the table early in the game and our AMA President is ok with it. Because, you see, our noble politicians in Washington promised him that the SGR issue would be "fixed". And this bad faith effort to effect reform by slapping together an absurd plan to simply write off the SGR cuts as unfunded debt for ten years represents an ingenius form of cynicism, even for our wily DC politicos. Of course the plan was going to get panned. Of course public backlash would make passage of the bill impossible. So it's out. And now we're back to square one. Obamacare has moved on, closer than ever to becoming a reality. And it still carries an endorsement from the AMA, even though the giant carrot that warranted that endorsement has been disregarded....

The WSJ Health Blog reports that the doctor fix is still in play, unfunded as before. Only now it's going to be implemented via a separate bill. That way there, Obamacare isn't contaminated by the stigma of having anything in it that will increase the federal debt. I hope Dr Rohack is pleased...

1 comment:

Anonymous said...

Any health plans that contain "automatic spending/cost reduction' features need to be excised before passage.

This one never worked and there is no reason to think that any others will either.