Healthcare Part XIV: Medicare Payments, Politics and Patient Mix Ethics
Among proposals of the Bush administration is to cut future Medicare physician reimbursements by an average of 15% (10%, then 5%), actual cuts would vary by specialty.
This political game has been happening throughout much of the history of Medicare, but this proposal is a HUGE percentage.
(There is still an assumption by many that all physicians are wealthy, drive Mercedes, and etc. which is demonstrably not true, especially at the family practice and internal medicine level).
The AMA and the AARP have begun a major lobbying effort, and Congress will alter this (sometimes lobbyists do good things) eventually, solving the short run problem.
Medicare is also trying to cut reimbursements by denying claims, focusing on documentation rather than substance (and to be fair some providers should improve documentation, and there is fraud in the system). Medicare is also working on some interesting R&D projects on meshing quality and reimbursement.
Clearly Bush (and the next President) have to make adjustments to Medicare costs (or to revenue) but how and where is a difficult question. This is not the way!
In the way of background, Medicare has always had an underpayment methodology, seeking to have the program subsidized by private insurers (the term is usually “cost shifting” which makes an accountant wince, as it is really “revenue stream manipulation”). This is a covert tax system on non-Medicare patients.
A research colleague of mine has a burning concern, “is it ethical for a physician to limit Medicare and Medicaid patients in order to manage patient mix, and therefore manage revenue?”
Having managed physician practices, I think patient mix management is an economic necessity (especially in family practice), although most of the time it is not very effective, the local population drives the patient mix. This does lead some providers to denial of service to Medicare and Medicaid patients though, which is a gut wrenching call for the providers but may be an economic necessity.
(If physicians are lucky the Medicare and Medicaid patients are distributed about equally to providers just by happenstance.)
The questions are complex, the answers are complex. Change or innovation is unlikely until 2009.