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Con: Facts belie GOP fear-mongering about coming Medicare cuts

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Jim McDermott
July 17, 2010
EDITOR’S NOTE: The writer is addressing the question, Will health-care reform cause an exodus of doctors from Medicare?

Just after the health-reform bill passed in March, Republicans rushed to every microphone they could find to lament how the legislation would bring an end to our health care system as we know it.


One of their favorite talking points—which has unfortunately been echoed on the editorial pages of a few newspapers—is that physicians across the country are going to stop accepting Medicare patients as a result of reform.


So let’s set the record straight: The legislation actually increases the reimbursement rates for physicians and includes no cuts to benefits for those enrolled in the traditional Medicare program.


The only thing the legislation cuts is waste and fraud—the latter of which, between Medicare and Medicaid, costs taxpayers an estimated $60 billion each year. It also greatly reforms something called Medicare Advantage, a program that has been exploited by private insurance companies.


Under the old system, Medicare Advantage plans overpaid private insurance companies by an average of about 15 percent, for the exact same—if not worse—care that you’d get with traditional Medicare. The reform legislation ends that practice and will ensure a fairer and more efficient payment system so private insurance companies don’t profit at the expense of Medicare beneficiaries.


In short, the legislation makes the Medicare program leaner and more efficient and does nothing to discourage doctors from accepting Medicare patients. Republicans, unsurprisingly, are crying foul about a problem that doesn’t actually exist. That’s not to say that we shouldn’t be worried about physicians and their willingness and ability to accept Medicare patients—we just need to be worried for a different reason.


In 1997, the Republican-controlled Congress passed the Balanced Budget Act (which I voted against) that created something called the Medicare Sustainable Growth Rate, also referred to as SGR. The SGR is an enormously complicated formula that determines how much Medicare will pay a physician for the different services they provide seniors during a doctor’s visit.


Ultimately, the formula has been a disastrous failure and has forced doctors who accept Medicare patients to face ever-increasing pay cuts. Can you imagine if your boss told you that you might soon face a pay cut of as much as 20 percent and to expect more cuts to come down the pike?


To prevent this from happening, Congress has had no choice but to override those cuts in time increments from 1 year down to 30 days. And Republicans have been little help in recognizing the need to correct this very serious problem: just two years ago, the late Sen. Ted Kennedy had to make a surprise appearance on the Senate floor amid his battle with brain cancer to cast the deciding vote to override a pay cut of over 10 percent. His vote was needed because Republicans apparently had no qualms about significantly reducing the pay of the doctors who serve our nation’s senior citizens.


People often wonder why I am so concerned about how much doctors make since it’s considered such a lucrative profession. The answer is that most primary care physicians run their offices as small businesses—they employ nurses, physician’s assistants, receptionists and administrative staff.


Like all small businesses, doctors need to be able to estimate their income to pay payroll and benefits. But unlike most small businesses, they can’t make reliable estimates because the government jerks them around every year.


While Congress has continued to delay these reductions, we still haven’t addressed the underlying problem. Instead, we’ve continued to kick the can down the road. We need a permanent fix.


Minority Leader John Boehner, R-Ohio, recently released a statement charging Democrats of using “disingenuous Medicare propaganda.” I can only say in response, that facts are stubborn things.


Rep. Jim McDermott, D-Wash., is the only psychiatrist among the 16 medical doctors serving in Congress. Readers may write to him at 1035 Longworth House Office Building, Washington, D.C.

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