It’s Only a Matter of Time…

A memorandum, dated May 18, 2012 from John D. Shatto and M. Kent Clememens, who work in the Office of the Actuary of the Department of Health and Human Services (HHS), published the following information concerning Medicare and Medicaid reimbursement rates for physicians based on the current law:

—the resulting comparison of future Medicare and Medicaid payment rates for physician services relative to private health insurance payment rates. Medicare payment levels in 2009 were about 80% of private health insurance payment rates, and Medicaid payment rates in 2008 were about 58%… Medicaid payment rates increase to 73% of private health insurance levels in 2013 and to 77% in 2014 and then return to 58%. Medicare physician payment rates decline to 55% of private health insurance payment rates in 2013, due to the scheduled reduction in the Medicare physician fee schedule of more than 30% under the SGR (Sustainable Growth Rate) formula in current law. (In practice, Congress is very likely to override this reduction, as it has consistently for 2003 through 2012.) Under current law, the Medicare rates would eventually fall to 26% of private health insurance levels by 2086 and to less than half of the projected Medicaid rates.

As predicted, Congress again diverted the 26% rate cut in physician reimbursement. But without a permanent fix in the current law, it is only a matter of time until the physicians who currently care for Medicare patients will just say no. No to taking on new Medicare patients, and no to continuing to take care of their current Medicare patients. It’s not if, but when!

For those few individuals in this country who are still uninformed on this issue, the answer is pretty straightforward. Without the relatively higher reimbursements for procedures, such as surgery and complex diagnostic evaluations, physicians simply can’t afford to run their practices on what they get paid from Medicare for nonprocedural services. That’s why specialties such as Urology and Ophthalmology are still readily accessible by seniors. Whereas, the Family Practice and Internal Medicine specialties are becoming increasingly stringent with regard to the Medicare patients they are accepting into their practices.

The bureaucrats in the CMS and HHS, many, if not most, of our elected officials on both sides of the isle in Washington and our state capitals and, at least, the last four administrations in the White House don’t get it. Naively, they operate on the premise that health care is a commodity and if the quality or availability falls to a certain level, the consumer will shop elsewhere. They cite the auto industry in Detroit as an example. The difference is patients are not consumers in the same sense. They can’t just buy a Honda when their Chevrolet falls apart.

Basic health care services are not a straightforward commodity; they are essential services guaranteed to them by the founders of this nation in the Life, Liberty and Pursuit of Happiness clause included in the Declaration of Independence. The other point is that the vast majority of our seniors have also prepaid and continue to pay for these guarantees though their Medicare taxes. They purchased Medicare insurance to protect them in the latter part of their lives. Why are they being forced to buy insurance that is either taken away (the $716 billion that is proposed to be taken out of Medicare to fund the newly insured under Obamacare over the next ten years) or reimburses at such a reduced level that no qualified provider is willing to treat them? Are we Cypress? Is there a new world order where those in leadership can take from anyone and anywhere they decide? Sounds familiar to the way the Jews were treated in Germany in the 1930s and 1940s, when many of their own countrymen and the rest of the world stood silently by.

Constitutionality aside, it really doesn’t matter whether Obamacare and the Balanced Budget Act are mandates or taxes. They are wrong if they harm a particular portion of our population.

Then there is the ‘sequester’ (the 10% overall cuts in all federal spending) that appears to target the most vulnerable of the Medicare population— the cancer patients. In a recent report, the spokesmen for cancer clinics across the country claim that the reduced funding brought on by the sequester, which took effect on April 1, will “make it impossible to administer expensive chemotherapy drugs while staying afloat financially.” North Shore Hematology Oncology Associates in New York has projected that the clinic would no longer see one-third of their 16,000 Medicare patients. Chief executive, Jeff Vacirca said, “the drugs we’re going to lose money on we’re not going to administer right now…It’s a choice between seeing these patients and staying in business.” (1) Tragic as this is, the selection of which cuts should be spared and which should be implemented by the sequester legislation may be subject to political manipulation by those in Washington who oppose the legislation.

Even though Obamacare is only in the early stages of implementation, it’s already happening now. Increasingly, new patients that move into Medicare coverage are having difficulty finding physicians, not just because the physicians don’t participate, but also because there are not enough of them. The projected physician shortage of 45,00 primary care physicians by 2020, along with the added covered lives, projected to be 30 million, under Obamacare, only adds to this already pressing problem. Additionally, many physicians are either dropping their participation in the Medicare program, picking specialties that are not as dependent on the Federal programs, such as Pediatrics and OB-Gyn, setting up ‘concierge’ practices that rely on preset fees or moving into hospital based practices.

What options do patients have if they are sick and need health care? They go to emergency rooms. They seek care from alternative or less qualified providers. Or, they do without. Emergency room care is always more costly because the evaluation and therapy are usually more complex and the appropriate therapy is often started later in the course of the disease. Substitute physicians, as they should be called, fill a need, but lack the rigors and depth of knowledge that separates physicians from other health care providers. Already a spokesman for the American Association of Nurse Practitioners, with a membership of 43,000, claims their members “can offer basic care if state laws would just let them set up an independent practice without doctor supervision.” In retort, the American Academy of Family Physicians points out that “family physicians have four times as much education and training, accumulating an average of 21,700 hours, whereas nurse-practitioners receive 5,350 hours. (2) Finally, doing without care, needs no explanation.

One large hospital in the Dallas area is now offering what they call a ‘Senior Clinic.’ Staffed by physicians or providers who are directly linked to physicians. A limited number of seniors can now seek care for their medical concerns in our community, if they are unable to find physicians who will accept them into their practices.

Is this what our senior citizens deserve? Waiting in long lines at a clinic set up just for them, possibly only seeing a substitute physician, sometimes being turned down for diagnostics and therapeutics that might add quality or prolong their lives. Isn’t that scenario hauntingly similar to what the Obamacare legislation is supposed to address in the crowded charity hospitals and clinics across the country? The difference is that instead of the uninsured these institutions will be filled with our senior citizens. I think we  (the seniors) deserve better!


  1.…away-thousands-of-medicare-patients-blame-the sequester/?hpid=z1
  2. answer-to-the-doctor-shortage/

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