Annual Fight in Washington Over Mandated Medicare
Cuts in Doctors’ Pay Started in 1965
National Public Radio reporters explain the history
on All Things Considered
March 4, 2010 – The legislatively mandated cut in
Medicare’s pay to physicians of 21.2 percent has been delayed until at
least April 1 by a bill passed by the Democrats late Tuesday and signed
by President Obama. Senior citizens scratch their heads trying to
understand this annual dance in Washington – doctors face an annual
reduction in Medicare pay, they threaten to stop treating seniors and
Congress stops the pay cut.
National Public Radio (NPR)
explained the issue's long history in a report by
David Kestenbaum and Chana Joffe-Walt on February 26.
“The story goes all the way back to 1965, when the
federal government was about to launch Medicare — the health-insurance
plan for the elderly.
“The idea of a government-run health-insurance plan
made doctors nervous, and Lyndon Johnson's administration was worried
that doctors wouldn't take Medicare patients. So Joseph Califano,
Johnson's adviser for domestic affairs, made what seemed like a small
concession: Medicare would pay doctors whatever they thought was
reasonable.
“That worked out well for doctors. They had been
providing lots of free care for old people, and they started getting
paid whatever they asked for, as long as it wasn't wildly out of line
with what others were charging.
“Within two years, Johnson's advisers saw that the
amount Medicare was paying doctors was rising far more quickly than had
been anticipated. They wanted to Congress to change the payment
structure. But doctors, who had a lot of sway with Congress, found they
liked the payment system. So the system stayed in place for decades, as
medicine got more expensive.
“Then, in 1986, a Harvard economist named William
Hsiao decided to figure out a better way to pay doctors. He thought he
could figure out the right price for each and every thing a doctor does.
“To do that, Hsiao had to answer what sound like
philosophical questions: How much mental work goes into performing a
colonoscopy? How does a regular checkup compare to doing brain surgery?
“He brought doctors in and had them rate everything
they did in relation to one reference point. For surgeons, the reference
might be a hernia repair: How technically hard is it, how stressful, how
many supplies? And they'd assign a certain number of units to each
procedure.
“Hsiao had doctors do this for thousands of
procedures.
“Congress loved the idea of an economist answering
this annoying question in what seemed like a rational way. And lawmakers
said that if his research panned out, they'd use his pay scale as the
basis for Medicare payments to doctors.
“That got doctors' attention. They hired
consultants, who did their own research about how much doctors should be
paid for each service…
“In 1992, Congress adopted Hsiao's
physician-payment scale, and it worked - but only for a few years.
There are different explanations for what happened.
Hsiao blames lobbyists. Lobbyists and doctors say health care is just
expensive, and most of the time Medicare actually underpays doctors.
“Congress tried to slow the growth of doctor pay by
saying total payments to doctors could not grow faster than the overall
economy. When the total amount Medicare was paying to doctors grew
faster than the overall economy, the rates for each procedure and
service were supposed to be cut.
“But doctors, naturally, lobbied against letting
those cuts take effect. And Congress passed short-term measures, again
and again, blocking the planned cuts. That's where things stand now —
cuts about to kick in, doctors lobbying Congress to block the cuts and
no clear answer for the best way to pay them.
Doctors face 21% pay cut from Medicare in 2010; same
annual quandary Democrats tried to fix; senior citizens many find it
harder to get a doctor; AMA issues new list of states with problems
By
Tucker Sutherland, editor & publisher
SeniorJournal.com
March 4, 2010 – The legislatively mandated cut in
Medicare’s pay to physicians of 21.2 percent has been delayed until at
least April 1 by a bill passed by the Democrats late Tuesday and signed
by President Obama. Senior citizens scratch their heads trying to
understand this annual dance in Washington – doctors face an annual
reduction in Medicare pay, they threaten to stop treating seniors and
Congress stops the pay cut.
