Centers for Medicare and Medicaid Physician Pay Cuts
Cutting Medicare and Medicaid payments to doctors will not engender more support for primary care, which is the weakest link in the chain in U.S. health care. This article examines federal programs established to create an improved healthcare system which have unintended consequences. Under the Budget Control Act of 2007, the Centers for Medicare and Medicaid (CMS) have been required to assess certain health care quality factors and integrate that data into clinician compensation. Initially, doctors were given incentives to show the quality of their care, but now the penalty phase has started. Also, please note, this law has nothing to do with the Affordable Care Act, so those of you with that myopathy, don't get your shorts in a bunch. Based on the Physician Quality Reporting System (PQRS) (1.) results from CMS, 470,000 doctors will get a 1.5% haircut, which is in addition to the overall budget reduction of 2% due to sequestration. (2.) So, in plain English, even the doctors whom managed to qualify for the PQRS quality bonuses, will not see that money, because the federal budget reduction exceeds that value.
Impact on Access to Care
Compensation is an important aspect of the U.S, healthcare system and the levels of reimbursement drive patient care and services. About half the doctors in the United States will not treat Medicaid patients because they cannot afford to do it. (3.) The expansion of Medicaid under the Affordable Care Act in 2010, is a lynch pin in the expansion of health insurance coverage and responsible for increasing access to basic health services for low-income people.
The idea of giving some programs budget restrictions while others are spending according to the marketplace (private sector insurance plans) won't work. Healthcare budgets only work if everyone in the system is subject to the same constraints, incentives, and rules. In the U.S., our healthcare system is a series of separate systems tethered only by some government regulations and CMS reimbursements. Health care providers cannot afford to overlook Medicare patients, because that group represents 16% of the national population. (4.) Of that figure, 20% of all health care services are for Medicare recipients and another 15% for Medicaid. However, health care providers do decline to accept new Medicare patients if they lack private Medicare supplement insurance. And of course many providers will not accept Medicaid patients at all.
How Can We Spend So Much and Still Have Poor Access?
In 2013, the U.S. spent $9,255 per person, still vastly in first place for over spending on dubious health care results. In 2012, the Commonwealth Fund Mirror Mirror On the Wall Health Systems Comparison, shows the U.S. spent $8,508 per capita on health care.
The next largest per capita health care spend was in Norway at $5,669, still one third less than the U.S.A. (5.) For those readers who may not be math wizards, the per capita measure is the great equalizer, as a country with a smaller population can be compared to a larger one based on this criteria. Some of my readers have complained that it isn't fair to compare smaller countries to the U.S. for health care, so here is a larger country comparison, France spent $4,118 per person in the same time period and it has a population of 68 million. Germany spent $4,495 and it has a population of 80 million. The U.S. population in 2013 was 316 million. However, just for giggles, I took most of the population of Europe and it's health care spend and compared that to the United States. The combined annual per capita heath services spend was $4,407, after adjusting for proportion of population and national health care spend in this group of European nations comprising 339,789,381 people. (6.) This information was drawn from 10 large European countries with current 2013 health care spending information, expressed in U.S. dollars. So, even when you size up the included European country populations to an aggregate comparable to the USA, Europe still spends about half of what the U.S. does on health care for it's citizens. Europeans spend much less than the U.S. on health care because they have national health care systems, which have been shown to be highly effective in reducing waste, delivering sound primary health care, and serving everyone. They also use a fraction of what the U.S. does to administer their health care programs.
Current State of Affairs
CMS reports that hospital spending has decreased for all health care sectors, public and private. However, this means inpatient treatment, not necessarily stand alone or ambulatory facilities owned by hospitals has been reduced. Many procedures for orthopedic surgery, cardiac care, and chemo therapy are done on an outpatient basis now, so this accounts for some of the reduction of inpatient services. As in basic rules of economics, pressure or restriction in one economic sector will cause a corresponding change elsewhere in the system. In the case of Medicare we are seeing increased cost sharing on the part of Medicare enrollees, increased prescription drug costs, and an antiquated benefit design for basic Medicare coverage.
Suggestions for Improvement
Rather than punishing individual doctors for their onerous work loads and efforts to serve low-income patients, why not look at ways to make it easier for them to do so? Here are some ideas worth considering:
Sources and Citations
(1.) Centers for Medicare and Medicaid
http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/Downloads/2013MLNSE13__AvoidingPQRSPaymentAdjustment_083013.pdf
(2.) Medscape.com
http://www.medscape.com/viewarticle/843815?src=wnl_edit_medn_wir&spon=34
(3.) Bloomberg News.com
http://www.bloomberg.com/bw/articles/2014-12-18/more-medicaid-patients-less-money-for-doctors
(4.) Kaiser Family Foundation.org
http://kff.org/medicare/state-indicator/medicare-beneficiaries-as-of-total-pop/
(5.) Commonwealth Fund Publications
.http://www.commonwealthfund.org/publications/fund-reports/2014/jun/mirror-mirror
(6.) Office of Economic Development
OECD (2014), "Total expenditure on health per capita", Health: Key Tables from OECD, No. 2.
DOI: http://dx.doi.org/10.1787/hlthxp-cap-table-2014-1-en
Healthpolicymaven is a trademark of Roberta E. Winter and has been used continuously since 2007. This article reflects her views and if you find them compelling, feel free to share it virally, with appropriate attribution of course.
Cutting Medicare and Medicaid payments to doctors will not engender more support for primary care, which is the weakest link in the chain in U.S. health care. This article examines federal programs established to create an improved healthcare system which have unintended consequences. Under the Budget Control Act of 2007, the Centers for Medicare and Medicaid (CMS) have been required to assess certain health care quality factors and integrate that data into clinician compensation. Initially, doctors were given incentives to show the quality of their care, but now the penalty phase has started. Also, please note, this law has nothing to do with the Affordable Care Act, so those of you with that myopathy, don't get your shorts in a bunch. Based on the Physician Quality Reporting System (PQRS) (1.) results from CMS, 470,000 doctors will get a 1.5% haircut, which is in addition to the overall budget reduction of 2% due to sequestration. (2.) So, in plain English, even the doctors whom managed to qualify for the PQRS quality bonuses, will not see that money, because the federal budget reduction exceeds that value.
Impact on Access to Care
Compensation is an important aspect of the U.S, healthcare system and the levels of reimbursement drive patient care and services. About half the doctors in the United States will not treat Medicaid patients because they cannot afford to do it. (3.) The expansion of Medicaid under the Affordable Care Act in 2010, is a lynch pin in the expansion of health insurance coverage and responsible for increasing access to basic health services for low-income people.
The idea of giving some programs budget restrictions while others are spending according to the marketplace (private sector insurance plans) won't work. Healthcare budgets only work if everyone in the system is subject to the same constraints, incentives, and rules. In the U.S., our healthcare system is a series of separate systems tethered only by some government regulations and CMS reimbursements. Health care providers cannot afford to overlook Medicare patients, because that group represents 16% of the national population. (4.) Of that figure, 20% of all health care services are for Medicare recipients and another 15% for Medicaid. However, health care providers do decline to accept new Medicare patients if they lack private Medicare supplement insurance. And of course many providers will not accept Medicaid patients at all.
How Can We Spend So Much and Still Have Poor Access?
In 2013, the U.S. spent $9,255 per person, still vastly in first place for over spending on dubious health care results. In 2012, the Commonwealth Fund Mirror Mirror On the Wall Health Systems Comparison, shows the U.S. spent $8,508 per capita on health care.
The next largest per capita health care spend was in Norway at $5,669, still one third less than the U.S.A. (5.) For those readers who may not be math wizards, the per capita measure is the great equalizer, as a country with a smaller population can be compared to a larger one based on this criteria. Some of my readers have complained that it isn't fair to compare smaller countries to the U.S. for health care, so here is a larger country comparison, France spent $4,118 per person in the same time period and it has a population of 68 million. Germany spent $4,495 and it has a population of 80 million. The U.S. population in 2013 was 316 million. However, just for giggles, I took most of the population of Europe and it's health care spend and compared that to the United States. The combined annual per capita heath services spend was $4,407, after adjusting for proportion of population and national health care spend in this group of European nations comprising 339,789,381 people. (6.) This information was drawn from 10 large European countries with current 2013 health care spending information, expressed in U.S. dollars. So, even when you size up the included European country populations to an aggregate comparable to the USA, Europe still spends about half of what the U.S. does on health care for it's citizens. Europeans spend much less than the U.S. on health care because they have national health care systems, which have been shown to be highly effective in reducing waste, delivering sound primary health care, and serving everyone. They also use a fraction of what the U.S. does to administer their health care programs.
Current State of Affairs
CMS reports that hospital spending has decreased for all health care sectors, public and private. However, this means inpatient treatment, not necessarily stand alone or ambulatory facilities owned by hospitals has been reduced. Many procedures for orthopedic surgery, cardiac care, and chemo therapy are done on an outpatient basis now, so this accounts for some of the reduction of inpatient services. As in basic rules of economics, pressure or restriction in one economic sector will cause a corresponding change elsewhere in the system. In the case of Medicare we are seeing increased cost sharing on the part of Medicare enrollees, increased prescription drug costs, and an antiquated benefit design for basic Medicare coverage.
Suggestions for Improvement
Rather than punishing individual doctors for their onerous work loads and efforts to serve low-income patients, why not look at ways to make it easier for them to do so? Here are some ideas worth considering:
- For clinicians who demonstrate they have met the PQRS standard for 2 out of the preceding 3 years, why not give them a reporting waiver, and only audit them every other year?
- Look at ways to reduce the burden of paperwork within CMS and other regulatory agencies which would certainly provide relief to clinicians, and allow them more time to spend with patients.
- Rather than demanding an insurance wellness plan, why not allow firms to come up with creative approaches? For example, massage has been shown to have health benefits and could be provided to people before they experience restriction in movements and are in need of physical therapy. In our increasingly sedentary society we need to look at ways that inspire low-risk movement. Maybe a roving masseuse who gives chair massages in the office will prevent injuries, so why can't this be covered under preventive services?
- Annual physicals are considered the holy grail of wellness, but they can add to unnecessary medical tests which increase patient anxiety and have not been shown to extend life. I am thinking in particular of the numerous scans and imaging tests. Of course a high resolution MRI can find something wrong with you, but the question is, will it change your life expectancy?
- Automatic treatment protocols, such as the use of statins for lowering cholesterol have not been proven to prevent heart failure, but have been shown to be harmful to the kidneys and liver. The government needs to tread lightly on rewarding protocols as opposed to patient results, such as reduced emergency room admissions, or hospital re-admissions.And at the end of the day, the clinician does not have complete control over the patient's health.
Sources and Citations
(1.) Centers for Medicare and Medicaid
http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/Downloads/2013MLNSE13__AvoidingPQRSPaymentAdjustment_083013.pdf
(2.) Medscape.com
http://www.medscape.com/viewarticle/843815?src=wnl_edit_medn_wir&spon=34
(3.) Bloomberg News.com
http://www.bloomberg.com/bw/articles/2014-12-18/more-medicaid-patients-less-money-for-doctors
(4.) Kaiser Family Foundation.org
http://kff.org/medicare/state-indicator/medicare-beneficiaries-as-of-total-pop/
(5.) Commonwealth Fund Publications
.http://www.commonwealthfund.org/publications/fund-reports/2014/jun/mirror-mirror
(6.) Office of Economic Development
OECD (2014), "Total expenditure on health per capita", Health: Key Tables from OECD, No. 2.
DOI: http://dx.doi.org/10.1787/hlthxp-cap-table-2014-1-en
(7.) Kaiser Health News.org
http://kaiserhealthnews.org/news/faq-could-congress-be-ready-to-fix-medicare-pay-for-doctors-2/Healthpolicymaven is a trademark of Roberta E. Winter and has been used continuously since 2007. This article reflects her views and if you find them compelling, feel free to share it virally, with appropriate attribution of course.
