That scary message sent by AARP arrived in my mailbox causing me to almost choke on my leftover turkey sandwich! The hard-to-miss postcard went on to say: You've earned your Medicare and the doctors you count on. Unfortunately, unless Congress acts by January 1, 2011, doctors who treat Medicare patients will see their pay cut by 25 percent.
What Is This All About?
In 1997 Congress created a system (known as the Sustainable Growth Rate formula, or SGR) to try to control Medicare spending. Under SGR, if actual Medicare spending (what Medicare pays for all types of health-related services) exceeds a target based the country's Gross Domestic Product, then Medicare must reduce physician payments in the next year.
The problem is that the cost of managing a medical practice keeps going up while payments to physicians keep going down. This is especially a problem for the lowest paid physicians - the primary care doctors (internists and family physicians) who provide the basic health care for seniors.
As seniors age, they tend to have more health care needs and more time-consuming and complex medical issues. You can do the math, less money for each patient visit + needing to spend more time with each patient = less hourly income to pay staff and bills. In fact, in some areas of the U.S., payments are so low that a physician practice with more than half of its patients on Medicare may actually lose money.
Can This Be Fixed?
YES! Congress needs to change the system for paying physicians who manage the health care needs of seniors. However, Congress has not acted to change the law. Periodically, Congress will pass a short-term "patch" to stall cuts in payments.
Congress needs to do two things:
- Pass a one-year patch to continue current physician reimbursement - an expensive but necessary move.
- Come up with a more permanent solution to the Medicare spending issue.
My Own Experience
I live in an area that is heavily populated by retirees. When I moved to the community, I was fortunate to find an outstanding internist, who not only had excellent technical skills but also spent the time needed to make sure my healthcare needs were being met.
Several years later, frustrated by his inability to spend time with the growing number of seniors in his practice and his falling revenues, he closed his practice to be a stay-at-home dad. I had to scramble to find another physician!
A Final Word from AARP
The last paragraph on the card I received from AARP said: "Congress Needs to Act: Protecting your relationship with your doctor shouldn't be a partisan issue. It's time for politicians to stop pointing fingers and work together to stop these cuts. You should have peace of mind about keeping your doctor."
I agree - how about you?
What do you think? Please leave a comment below or in the Health Insurance Forum.
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