Date Published: 23 April 2007
Medicare trustees report highlights need for reform; projects steep Medicare physician payment cut
Cecil Wilson MD, Chairman of the Board of the American Medical Association (AMA) has recently made the following statement:
" Today’s release of the Medicare Trustee’s report highlights the need for a comprehensive, long-term fiscal plan for Medicare. The AMA has grave concerns about the overall stability of the Medicare program, and our nation needs creative solutions for long-term reform. Arbitrary, drastic payment cuts to the physicians who are the foundation of Medicare are not the answer.
_ We need congressional action to stop next year’s 10% Medicare physician payment cut that undermines the physician foundation of Medicare and harms seniors’ access to care. Medicare cuts to physicians are now projected at 41% over 9 years, while practice costs will increase about 20% over that time. This widening gap between payments and cost of care makes it extremely difficult for many physicians to continue accepting new Medicare patients at a time when baby boomers are about to begin entering Medicare by the millions. An AMA survey found that nearly half of physicians would be forced to limit the number of new Medicare patients in their practice if a cut of five percent occurred – just half of next year’s cut.
_ As we work to improve the quality of health care, steep cuts will also make it difficult for physicians to invest in health information technology that can be used to improve care. It costs a physician about $44,000 to purchase an electronic health record system, and an additional $8,500 a year in ongoing costs. Physicians will find it nearly impossible to invest in health information technology in the face of steep Medicare payment cuts and rising practice costs.
_ One thing Congress can do immediately to strengthen the Medicare program for future generations is to level the playing field between Medicare Advantage (the Medicare private plan program) and Medicare fee-for-service programs by paying the same amount for health care under each program. The commission that advises Congress on Medicare, MedPAC, has called for financial neutrality between Medicare fee-for-service and Medicare Advantage plans, which have average payments that are 12% higher than if the same patient were treated in fee-for-service Medicare.
_ That’s a more than $5.2 billion per year subsidy paid to Medicare private health plans that provide eye-popping returns for their stockholders. MedPAC clearly states that ‘financial neutrality means that the Medicare program should pay the same amount, adjusting for the risk status of each beneficiary, regardless of which Medicare option a beneficiary chooses.’
_ Congress has promised America’s current and future seniors health care benefits through Medicare, and lawmakers must stop looming Medicare physician payment cuts to ensure seniors’ have access to care in the short-term, and start working toward innovative long-term reforms for the entire program. "
Source: American Medical Association (AMA).