By Hal Scherz, MD
It never ceases to astonish me how ill informed my colleagues are about what is currently going on in healthcare. I recently sat in a board meeting of a physician- hospital organization and the topic being discussed was accountable care organizations (ACOs). The doctor sitting next to me leaned over and asked me what an ACO was. This is a board member representing 800 physicians in contract negotiations with insurance companies!
Unfortunately, he is not an outlier. Too many of us just show up for work and then go home at the end of the day. I might be describing you. Unless doctors take an interest in the business and politics affecting medicine, they will have no one to blame when their autonomy is lost, when their income suffers, and when their patients are placed at risk. It is not sufficient just to educate oneself about these issues. Actions also need to be taken. Most doctors have the false assumption that their specialty organizations and state medical societies are watching out for them and they don’t need to do anything on their own- but they would be wrong. These organizations focus on concerns affecting only a small group of doctors and consequently, our profession is fragmented and vulnerable to insurance companies, the federal government, hospitals and other interests that take advantage of doctors. The American Medical Association should be watching our flank but instead, they are just as bad as other special interests that prey on physicians because they seek to maintain their financial and political power.
Despite the fact that the Affordable Care Act is law and the “train has left the station”, where things end up is not yet determined. In the Obama administration’s view of this issue, doctors will make less money and likely work harder for it. They are doing everything possible to see to that. Obamacare cuts $500 billion dollars from Medicare. This means that there will be less money to pay for services- decreased reimbursement for services.
There are other ways that the federal government has ensured that doctors will earn less. On January 1, the “doc-fix” comes up again. This is the sustainable growth rate or SGR that was part of the 1997 Balanced Budget Act. It means that when Medicare spending exceeds a certain rate relative to GDP, reimbursement to physicians will be downwardly adjusted. Each time that this has come up, Congress has postponed it, but the reductions have been accruing. It was put off 6 times in 2010-11 alone, but expires on December 31. On January 1st, Medicare reimbursement to doctors is set to be decreased 30%, unless the government makes an accounting adjustment of $300 billion dollars- money that we don’t have and a move that is considered unpopular with many.
One of the many hidden treasures of Obamacare is IPAB or the Independent Payment Advisory Board. It is a 15 person, unelected group of bureaucrats, within the executive branch which is given the power to decrease Medicare spending when it exceeds a certain level. Their decisions are binding, and not subject to Congressional oversight nor Judicial review. And to make this even better, hospitals are exempt from the reductions in Medicare spending until 2020, which means that doctors take the entire beating.
Just when it didn’t seem possible that the government couldn’t find another way to ensure that doctors made less money for seeing patients with government insurance, they have found a way. It came out of the “debt- ceiling crisis” and in the words of Rahm Emanuel, a good crisis shouldn’t go to waste. The Congressional Super Committee was formed to come up with an additional $1.5 Trillion dollars in cuts and when this group is unable to reach consensus, automatic cuts go into effect through a process called sequestration. Half of the money will come from defense, but the other half will come from entitlement programs- including Medicare. These cuts will once again be made in reimbursements to physicians.
As long as doctors sit back and allow this kind of behavior to continue, it will not stop. Critics of plans like that of Paul Ryan, which attempts to fix and preserve Medicare by having patients contribute something to their own healthcare, abound and continue to demagogue this issue. Until patients are once again forced to re-establish the financial connection with the healthcare that they receive, someone else will be paying the bill and calling the shots. Skin in the game is crucial to rehabilitating the healthcare system, and doctors need to be united on this point. But first, doctors need to wake up and pay attention now, before it is too late.
Hal Scherz MD, FACS, FAAP, is President and Founder, Docs 4 Patient Care.