Medicare cuts threaten patient care: Questions of access and technology

Doctors must join the AMA's fight to fix the program's reimbursement problem.

Posted May 9, 2005.

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Sometimes one word sums everything up perfectly. "Devastating" is the word AMA President-Elect J. Edward Hill, MD, used when describing the potential effect of the Medicare physician payment cuts projected for next year through 2011.

Dr. Hill offered this prognosis at a recent news conference in Washington, D.C. His choice of wording was more than backed up by the results of the new AMA Member Connect survey he presented.

The poll of more than 5,000 doctors showed that the payment reductions -- estimated at 4.3% next year and 26% over the next six years -- would not only harm access to physicians for new and existing Medicare patients but also cause doctors to delay investments in their practices that would improve patient care.

If a reimbursement cut in the neighborhood of 5% were to go through next year, 38% of physicians would reduce the number of new Medicare patients they accept, the survey showed. This means patients who just enrolled in Medicare and those looking for a new doctor would have a harder time finding a physician. About 18% of respondents said they would decrease the number of existing Medicare patients they serve.

Many patients able to keep their doctors would find that physicians have shortened office visits and stopped providing certain services.

The payment cuts' repercussions would go beyond patient access. Facing a drop in Medicare dollars while liability insurance premiums and other practice costs increased, many doctors simply wouldn't have the financial wherewithal to invest in new medical equipment or information technology to improve the care they deliver.

Sixty-one percent of doctors would delay buying new medical equipment and 54% would defer IT purchases if the 2006 pay cut went into effect. Those numbers would grow to 72% and 67%, respectively, if multiple years of reimbursement reductions occurred.

These are not choices doctors would make willingly, happily or lightly. They are being forced on them by circumstances. As doctors' payments fall by 26% over the next six years, their practice costs would rise 15%. Medicare pay wouldn't even cover the cost of providing care to beneficiaries.

Fortunately, Congress and Medicare officials can avert the brewing crisis.

At its heart is the flawed Medicare physician payment formula. The formula penalizes doctors with lower payments when Medicare spending on physician services grows faster than the gross domestic product. The problem is beneficiaries' health needs aren't dictated by the national economy.

In the end, doctors are punished by forces they cannot control, including the rise in chronic disease rates, Medicare coverage decisions that increase demand for services, the growing cost of drugs administered in physicians' offices and the shift of patient care from the hospital to doctors' offices.

The formula must be scrapped and the payment cuts avoided. The Medicare Payment Advisory Commission, which advises Congress on program policy matters, agrees. It has recommended that lawmakers pass a reimbursement increase for 2006 and replace the formula with a system that reflects changes in physician practice costs.

The Bush administration could pitch in by removing the cost of drugs administered in physicians' offices from the Medicare formula. This would lighten lawmakers' load and reduce the price tag -- in the tens of billions -- of any legislation to fix the payment problem.

The AMA is fighting for these changes. But individual doctors also must do their part by contacting their lawmakers and pushing them to address the problem. They can do so by reaching out to their lawmakers directly or through the AMA's grassroots action Web site.

Physicians were victorious in their efforts to reverse cuts scheduled for 2004 and 2005. But the task is even harder this time around because of a drive in Congress and the White House to reduce the nation's budget deficit, expected to hit $400 billion by year's end. This makes doctors' participation in the AMA's effort more essential than ever.

It's true these are tough budget times, but Congress must find the funding necessary to fix the Medicare physician payment problem. The cost of doing nothing, as indicated by the survey, is just too high.

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External links

AMA on grassroots action (link)

AMA on Medicare physician payment reform (link)

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