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Publisher:
The
Heartland Institute, 07/14/2010
Don't
expect doctors to give the Patient Protection and Affordable Care
Act a clean bill of health. The act will reinforce the worst
features of existing third-party payment arrangements in both the
private and public sectors, arrangements that already compromise
the professional independence and integrity of the medical
profession.
Doctors
will find themselves subject to more, not less, government
regulation and oversight. Moreover, they will become increasingly
dependent on unreliable government reimbursement via Medicare and
Medicaid payment, as irrational government payment approaches are
expanded to larger portions of the population.
Under
the new law an estimated 18 million of the 34 million who would
gain coverage over the next 10 years would be enrolled in
Medicaid. Such a massive Medicaid expansion will displace private
health coverage and expand government control over health care
financing and delivery.
Physician
payments in the major entitlement programs are well below the
prevailing rates in the private sector. On average, doctors in
Medicare are paid 81 percent of private payment; physicians in
Medicaid are paid 56 percent of private payment.
No
Payment Fixes
The
new law does not substantially change the general pattern of the
government's systems of physician payment. Indeed, it only expands
their reach and adds new regulatory restrictions.
For
example, beginning this year the new law will prohibit physicians
from referring patients to hospitals in which they have ownership,
with the exception of those that treat a large number of patients
enrolled in Medicaid. . .
Draconian
Payment Formulas
Medicare
authorizes a set of administrative payment systems for doctors and
hospitals. For physicians, the basic Medicare fee schedule is
based on a formula called the Resource Based Relative Value Scale
(RBRVS), which pays physicians based on the estimated
"inputs" required to provide a medical service, such as
the time, energy, and effort.
Medicare
physician payment is annually updated on the basis of the
Sustainable Growth Rate (SGR) formula, which ties annual physician
payment increases to the performance of the general economy. Under
the SGR, without congressional intervention the initial Medicare
pay cut would amount to 21.3 percent.
The
impact is not hard to fathom. The Fairfield County Medical
Association in Connecticut reported that if such cuts were to take
effect, 41 percent of county doctors would stop taking new
Medicare patients, and nearly one out of four doctors would drop
Medicare altogether. . .
Government
in the Operating Room
On
top of existing payment rules, regulations, and guidelines, the
new law creates numerous new federal agencies, boards, and
commissions. Three have direct relevance to physicians and the
practice of medicine. . .
Much
of the outcome of this legislation will depend on how the findings
and recommendations of these regulatory entities are implemented
and whether the recommendations are accompanied by financial
incentives, penalties, or regulatory requirements. In any case,
this is not a prescription for medical innovation.
Surprise:
Doctors Unhappy
Polling
results identify deep discontent among doctors. A recent U.S.
survey of physicians conducted by Athena Health and the online
physician community Sermo found 79 percent of U.S. physicians are
less optimistic about the future of medicine, 66 percent indicated
they would consider dropping out of government health programs,
and 53 percent would consider opting out of insurance altogether.
More
ominously, with the nation already facing a shortage of
physicians, particularly in geriatrics and primary care, many
doctors also say they would leave the profession altogether.
None
of this should be surprising. The new law doesn't address doctors'
most pressing concerns, such as tort reform. And it worsens the
already painful problems caused by third-party payment and
government red tape.
Patient
Control of Spending
A
key goal of health care reform should be to restore the
traditional doctor-patient relationship. In such a relationship,
doctors are the key decision-makers in the delivery of care, and
patients are the key decision-makers in the financing of care.
This cannot be achieved unless and until patients control health
care dollars and decisions and third party insurance executives
are directly accountable to those who pay the health care bills.
Obviously,
Congress needs to start over and get it right.
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