**UPDATE: The communications director for the MMS stopped by in the comments to take full credit for the press release.
I'm pretty sure this press release, ostensibly written by the Massachusetts Medical Society as an informational announcement to physicians, had input from other sources. Reprinted nearly in its entirety:
Victory for Seniors and Physicians - Senate Passes Medicare Bill
The U.S. Senate today voted 69-30 to block a 10.6% cut in physician Medicare fees, while also adding a 0.5% increase for the rest of 2008 and a 1.1% increase for 2009.
In a moment of high drama, Sen. Edward M. Kennedy appeared on the floor of the Senate in the middle of the roll call vote. He was escorted by his son U.S. Rep. Patrick Kennedy of Rhode Island, Sen. John Kerry and Sen. Barack Obama. The Senate chamber immediately erupted into a boisterous and prolonged round of cheers and applause.
Senators Kennedy and Kerry voted to support the bill. They have consistently supported physicians throughout the long effort to fix the Medicare payment formula.
Two weeks ago, the same bill failed by a single vote. Today when the final outcome became clear, nine Republicans who had voted against the bill two weeks ago voted yes. Most of them are up for re-election this year. Senators Gregg and Sununu of New Hampshire, who voted against the bill two weeks ago, voted no again today.
MMS President Bruce S. Auerbach, M.D. said, "Common sense prevailed, and a crisis in care has been avoided. The Senate did the right thing for our senior citizens and our physicians. A cut that large in reimbursements would have needlessly jeopardized access to health care for seniors, as well as endanger the viability of physician practices."
Dr. Auerbach needs to read "The Road To Serfdom."
Dr. Auerbach added, "We are thankful to Senators Kerry and Kennedy for voting 'yes,' and we are especially grateful to Senator Kennedy who, despite facing critical personal health problems, made a dramatic appearance in the Senate to cast his vote."
President Bush has said he will veto the bill, but 69 votes would override a veto. The House approved the same bill last month by a 5 to 1 margin, easily enough for an override.
Doctors are in the business of information gathering, and what this doesn't tell you could fill volumes ... which I will below in the extended entry. But briefly, for those with a disabled mouse finger, what it doesn't tell you is why Senators Sununu and Gregg voted against the bill, and why President Bush threatens a veto. The Medicare Advantage program allows seniors to continue private insurance plans paid for through the Medicare system. This bill pays for the physician payment adjustment (preventing a 10% cut in reimbursements!) by gutting that program. The no-votes and veto aren't about not caring if seniors have access to physicians or stopping payment cuts from bankrupting medical practices, they are about the struggle between private health care options and the efforts of Democrats to funnel seniors into a monolithic Medicare program. If you want that information you need another source.
LOS ANGELES (MarketWatch) -- Health insurers took a beating in the markets Thursday as investors played off the Senate's passage of a Medicare bill designed to avoid deep cuts in physician payments but that would end up cutting the Medicare Advantage program.Reductions in Medicare Advantage could put a dent in the private fee-for-service arm of the government's health program for seniors that has helped inflate enrollment and revenue at a number of insurers. Analysts, however, seemed to think the potential effects would be muted."While our overall view of managed care remains negatively colored by the commercial underwriting cycle, we remain positive on [Medicare Advantage]," Goldman Sachs analyst Matthew Borsch said in a note to clients Thursday.
WASHINGTON -(Dow Jones)- President George W. Bush intends to veto the Medicare bill that passed the Senate on Wednesday, the White House said, repeating its concerns about cuts to the Medicare Advantage program.
The legislation would avoid deep cuts in Medicare reimbursements for physicians by maintaining physician payments at their current levels, with payments increasing 1.1% in 2009. The measure also makes cuts to companies that offer private Medicare Advantage plans. The cuts would come to "fee-for-service" plans and payments to private plans with teaching hospitals in their areas.
This MMS press release tells you none of that, instead presenting the three Republicans mentioned as the unquestioned black hats in a western showdown. The MMS should be ashamed of themselves. Being a physician is all about education, a lifetime of learning. Presenting only a highly partisan snippet of the debate is a violation of that commitment.
Below, a discussion of SGR (and when that concept was invented), the Medicare Advantage program, and why Medicare's payment system is fatally flawed.
First up, some information on the Medicare Advantage program.
Medicare Advantage is a means of receiving health care and Medicare coverage. The beneficiary must specifically opt to receive Medicare coverage and care through an HMO, or other private plan insurance. Once the choice is made, the beneficiary must generally receive all of his or her care through the plans providers in order to receive Medicare coverage. The main premise is that through preventive care and the use of a primary physician who acts as a "gatekeeper" to specialized care, health care costs can be reduced while beneficiary health can be maintained.
Private insurance plans are generally paid a fixed rate per beneficiary by Medicare, regardless of how many or how few services the beneficiary actually requires...
HMOs and the private insurance plans are required to provide the full range of Medicare benefits to each enrolled beneficiary for a fixed payment per enrollee. Medicare HMOs are also required to provide additional services, over and above those available through the traditional Medicare program, without additional charge to Medicare enrollees.
There is a lot more information on the program at the link, but that's the gist of it. Now, I'm not a big fan of HMO's either, but this does give seniors a private insurance option aside from Medicare.
Now about that SGR:
With the Balanced Budget Act of 1997, Congress introduced the sustainable growth rate mechanism (SGR) that currently governs payment to physicians in the Medicare program. SGR ties annual Medicare physician payment updates to changes in the national gross domestic product (GDP). Administrative pricing has proven to be a flawed system. Specifically, it:
- Fails to reduce costs. Setting prices has historically resulted in predictable changes in behavior; in trying to make up losses for artificially low prices per procedure, physicians increased the volume and intensity of services. So costs continued to rise...
- Limits access. Although Congress voted to prevent a 5.1 percent payment cut to physicians in 2007, the administrative pricing system remains in effect. The cumulative cuts under the SGR system are predicted to reach 34 percent by the year 2015. Reductions of that magnitude will likely lead to a significant cutback in the availability of physicians' services...
- Threatens choice. Decisions that affect health care spending occur at the individual patient-physician level. A centralized planning system, with blunt bureaucratic instruments like the SGR linked to arbitrary national targets that have little or nothing to do with the market for physicians' services, severely threatens choice at the individual level...
- Ignores value. Administrative pricing systems pursue a simple-minded objective: cut costs. Costs, however, are only half of the value equation. In Medicare physician payment, the SGR mechanism has no link to the quality of the services provided and contains no incentives for physicians to provide, or for patients to demand, better quality of care.
1997. The Clinton administration passed this problem child, and wasn't around long enough for the inherent problems to become apparent. The SGR mechanism is the flip side of 1974's Baseline Budgeting,
[from 1995] Budget reform. Since 1974, Congress has used "baseline budgets." The Congressional Budget Office projects how much federal agencies will spend over the next five fiscal years, building in increases. When spending rises by less than the CBO projects, Washington insiders declare that a spending "cut."
Just as that was a mistake, allowing the confusing declaration of a "drastic cut" when spending is proposed to rise less than expected, the SGR caps spending increases in Medicare regardless of the aging population's need for services. If the number and cost of services increase more than expected, reimbursements are cut back to meet the spending targets. As a result, a physician will see for Medicare patients steadily falling reimbursements in an economy where the cost for everything else, from office salaries to electricity to technological improvements continues to rise. From the Texas Medical Association:
Medicare cuts will force more doctors out of the program, so many patients will face greater difficulty finding a physician to care for them. A recent TMA physician survey found that only 58 percent of Texas physicians said they would accept all new Medicare patients. If the problem does not get fixed, more than 42 percent of Texas doctors would consider opting out of the Medicare altogether.
While physician fees continue to go down, Medicare payments to hospitals continue to go up because they are tied to the Medicare Economic Index (MEI), which is Medicare’s measure of the increasing costs of providing medical services. Payments to Medicare Advantage plans also have risen steadily.
Physicians cannot continue to absorb cuts in Medicare fees and maintain viable practices. Medicare payments to physicians cover only about 65 percent of the actual cost of providing patient services. The sustainable growth rate (SGR) formula used to pay physicians must be fixed now to ensure seniors and persons with disabilities have access to a doctor of their choice.
Medicare doesn't reimburse physicians what the service is worth to the patient. It doesn't reimburse based on the difficulty and effort required. It doesn't reimburse based on the level of expertise necessary. It doesn't reimburse based on the quality of the care. And it doesn't reimburse based on the time commitment necessary to provide the service. No, Medicare reimburses physicians based on what Medicare can afford to pay. Imagine going to the grocery store and selecting $120 worth of food, and offering the clerk $68 because that's all you can afford that week. Eventually the store will decline to allow you to shop, probably that very day.
I'm not a big fan of the setup of Medicare advantage, but as you can see Medicare has it's own major problems. If the Senator Kennedys of the world want to demagogue evil Republicans as not caring about the health care of seniors, apparently they'll have ready and willing participants in the propaganda not only in the media, but in the Massachusetts Medical Society as well.