Doctors are breathing a collective sigh of relief because we again escaped a cut in
It may be that we physicians are paid enough, or at least nearly so. But there is no objective way to calculate reasonable compensation for physicians. After all, what doctors do — preserving health and saving lives — is, in a sense, priceless. Unfortunately, the proposed Medicare cut, annually negated by Congress, has resulted in annual medical mini-fiscal cliffs.
Luckily, there may be a practical, dependable alternative to such incalculable, arbitrary attempts to save on the country's medical care costs.
Shortly after the SGR issue was settled this month, a huge health care budget earthquake occurred when several major insurers announced that premiums would be raised by up to 20 percent. True, rebates may ultimately be required by
Even aside from the annual SGR-induced attempts to cut Medicare payments, the present Medicare baseline calculation for physician payment is ineffective, requiring fixes by a panel of doctors. This system may have helped the budget for a few decades, but it is not the answer. Doctors' reimbursements, on average, have been decreasing slightly relative to the cost of living, with the midlevel annual income in 2011 of $203,000 for primary care doctors (although up to twice that for specialty doctors — before malpractice premiums). You may think these salaries should be lower, regardless of the even higher earnings of health care business executives.
Nevertheless, using the annual arbitrary Medicare cut in this deteriorating situation has not only been unsuccessful politically — the SGR also fails to target only the areas mainly responsible for increases in billing. The calculation includes cutting payments for basic patient care, which are not rising much. Some physician businesses, including outpatient tests and procedures, are subject to costly and risky overuse. Moreover, these charges are increasing more rapidly. It would be more reasonable for the SGR to target just these less-critical business reimbursements.
In the presently adversarial fee-for-service system, doctors feel justified in their efforts to get whatever they can from both government programs and private insurance. The federal response is understandable. It is partly a response to the finding that in regions with more doctors and hospitals, more medical services are billed, with no evident health benefits. The SGR is a way to offset these unnecessary reimbursements. It has also served as a convenient fiction to support annual budget proposals. Since the override by Congress cannot be predicted in advance, the reduction is included in health care budget predictions — even though Congress always blocks the cut.
Nevertheless, even if not blocked by Congress some year, the way those annual proposed cuts are calculated is weak as a national cost control. They govern only a small fraction of the Medicare budget. Most critically, the system is harmful to core practitioners and those restraining care to what is necessary. As noted above, those key services and appropriate behaviors are caught up in this same federal dragnet as medical business reimbursements. Moreover, total payments to physicians are a small fraction (20 percent in 2011) of overblown U.S. health care costs.
Medicare has shown that attempts at "pay for performance" — paying for paperwork showing compliance with quality — do not incentivize doctors. Surprisingly,
Dr. James Burdick is professor of surgery at