The Medicare Sky is Falling.. Accepting Medicare
by run 75441
The Medicare Sky is Falling
Part of the Medicare Sky Falling story is a claim that doctors are refusing to accept new Medicare patients because of low payments. It is common for politicians and pundits to pontificate declaring Medicare is broken. A doctor himself, Wyoming Senator Barrasso made the claim to CNN’s Candy Crowley recently.
Sen. John Barrasso mistakenly claimed that “57 percent of doctors don’t want new Medicare patients,” which isn’t true. His own spokeswoman admits he got it wrong.
National surveys have put the number who don’t take new Medicare patients as low as 14 percent, and a big American Medical Association survey last year showed only 17percent of all physicians said they were ‘restrictin’ Medicare patients (either taking none, or just some).”Senator’s Barrasso’s Medicare Mistake
See also Part 1, Part 2, and Medicare Breaks medical inflation curve
The claim is related to the implementation of the Sustainable Growth Rate formula which adjusts physician payments whenever the aggregate cost of Medicare exceeds the calculated growth rate. The Sustainable Growth Rate is outside of the ACA and since its inception has only been applied once in 2002. Congress has repeatedly delayed the decreases by applying short term fixes canceling out the planned SGR adjustments in reimbursements. The proposed 2012 budget also contained delays in implementation. The SGR was passed as a method to control the increasing aggregate cost of Medicare without consideration for the number of services provided.
On the other hand, 62% of Primary Care doctors said they would stop taking new Medicare patients if the SGR formula reimbursement cuts were implemented. To increase reimbursements for primary care, the ACA has in it provisions to increase primary care doctors reimbursements and at the same time reduce reimbursements for specialists.
Another claim by pundits and politicians is Medicare has been outstripping inflation. This has been true for a number of years; but, a more recent trend shows quite the opposite. Here again pundits and politicians have been claiming the reduction in doctors accepting Medicare patients has been the cause of such a decrease in Medicare cost. I believe we have debunked that claim earlier.
Given that rising healthcare costs drive the cost of Medicare, Medicaid, and even commercial insurance; it is outrageous that people would consider cuts in Medicare and Medicaid as a means to control overall healthcare costs or just give up the fight on rising healthcare costs and sacrifice the poor, the children, and the elderly to vouchers and buyer beware.
How has Medicare been performing recently? Maggie Mahar at Health Beat Blog Deadlock Over The Debt: What It Means to You . . . touches upon the planned cuts in Medicare John Boehner proposes and lesser cuts offered by President Obama as a compromise to break the stalemate in Washington between the Democrats, the Republicans, and the Tea baggers. Wrongly identifying Medicare and Medicaid as the leading cause of rising healthcare costs, the House under John Boehner has sought to impose severe cuts in the programs which will in effect balance the deficit and budget on the backs of the poor, the elderly, and the children who depend upon Medicare and Medicaid heavily. Medicare and Medicaid are still on the chopping block for cuts under the recent compromise.
In an update to its S&P Healthcare Indices (12 month moving average), Standard and Poor’s reports Medicare cost trends decreased with costs growing at a rate of 2.64% annually in May. So, why attack a program whose costs are decreasing and out-performing the Commercial Index (private healthcare) which showed a 7.35% annual cost?
While both the Commercial and Medicare Indexes showed a slight uptick in May of .25 and .16, Medicare has consistently outperformed commercial healthcare insurance in controlling cost. Medicare’s performance comes in light of increased healthcare industry costs and a growing baby boomer population.
As Taken from, “US Healthcare Costs Rose 5.8% Over the 12 Months Ending May 11 According to the S & P Healthcare Economic Indices
The Commercial Index (private healthcare) mirrors the growing costs of healthcare in the US. From the May 2010 levels, the Commercial Index reflects a 7.35% increase, Medicare 2.64%, and the composite of both 5.35%. The Medicare Index shows a widening gap between it and the Commercial Index which appears to be occurring from its control of costs. In effect, Medicare is dragging down the cost of commercial insurance and acting as a control on overall healthcare costs.
As Taken from, “US Healthcare Costs Rose 5.8% Over the 12 Months Ending May 11” S & P Healthcare Economic Indices
While hesitant to declare an outright victory and a long term trend in Medicare cost controls, David Blitzer of the S & P Indices in a conversation with Maggie Mahar indicated this is more than just a blip on the screen. He went on to add:
We tend to get data from the Centers for Medicare and Medicare about 1 to 1 1/2 years after the fact; this is why there is a widespread perception that Medicare spending is still rising 2% faster than GDP. S&P is giving us more current numbers, and while the S&P index is ‘is not perfect,’ Blitzer says, ‘it’s good.While there is waste in Medicare, it is conceivable Medicare costs could be reined in even further through the ACA and enough such so as to match GDP growth and no more. To squeeze cost the ACA will look to the Advantage Programs Insurers, overpayments to Advantage insurers, payments for some preventable errors, annual increases in reimbursements to hospitals, nursing homes and other institutional providers, and with systematic changes to the today’s healthcare model which rewards providers for doing more than for better outcomes.
Interesting that S&P downgrades US Credit Rating while at the same time shows proof of entitlement programs driven by the cost of the healthcare industry are decreasing at a faster rate than their commercial counterparts.
rdan,
I have no doubts that the National rate of acceptance of Medicare et al are as you said. Try getting a doc in Fairfax County, VA to take it. They don’t. I have Tricare, military medical, and it absolutly sucks to find a doc in high cost of living areas. I tried over a 5 year span to find good docs in NoVA that take Tricare. None would. Ended up going to Bethesda in Maryland to finally find a doc who would. I have had the same problem in the DFW area but managed to finally get one. On the other hand every doc in Shreveport, LA took Tricare – even the top notch guys.
In high cost of living areas you see that divide between people who have good insurance/pay cash and people on the government healthcare. The best doctors, surgeons etc just won’t take any Tricare/Medicare/Medicaid patients becuase those funds don’t cover the cost of the patients appointment. Your getting a quality cut. The best docs can pick and choose and they do – on the ability to pay.
And doctors arn’t going to repay those $200,000 education loans that they took out to get an MD on Medicare SGR rates.
Islam will change
Most of the physicians restricting Medicare patients do so because they have plenty of patients.
Some small number of physicians are rejecting Medicare patients because they want to control patient mix. Usually depends on geography.
The biggest problem in Medicare is the under payment of primary care docs. The second biggest is the overutilization of some specialty services.
And then you have Docs who play politician and pander to their base, even though they know better. Besides, he will need all that $$$$ if he wants to stay in office, so he has to say those kind of things. Of course, then one has to wonder just how good a Doc he is, that he would want to be a politician instead of practice medicine?
Buff and rusty are both correct: “ Your getting a quality cut. The best docs can pick and choose and they do – on the ability to pay. “
Rusty: “Most of the physicians restricting Medicare patients do so because they have plenty of patients.”
Experienced, established docs in high cost areas and with plenty of patients can and do restrict coverage to new Medicare patients. Medicaid is even much worse!
So medicare patients in that area are limited to new docs building a practice, and are often inexperienced. Moreover, the docs that are in between are often those who have some blemishes and the local populace knows about them.
Examples abound for all those cases. Ever been to a cutter? A quote from a patient I know, “She (the doc) said we would treat our (non-existent disease) aggressively. We will operate ad tighten on the…”
BTW, who here, other than Run, thinks that having 1 in six docs rejecting new medicare patients is NOT a problem?
Reuters:
Link from Barry Ritholtz links for today.
http://blogs.reuters.com/muniland/2011/08/18/its-the-military-stupid/
“America could be much more competitive, balance the budget and reduce the national debt if we brought our military expenditures in line with our global competitors. “
That would “free” about $600B a year. Much of it scrap, rework, fraud and waste.
F-35 still grounded; since 3 Aug 2011, F-22 grounded since 3 May 2011 F-22 pilots losing ratings.
Politicians who put self muneration and PAC money before country is one thing.
Any doc who turns away patients based on finances is an abomination.
A pox on the country with 18 of the world’s largest fleets and the corner on missile subs, all the most expensive, flawed weapons, empire and multiple occupations of sand dunes all of the militarism on credit from SSTF/medicare super receipts and 50% of the world’s war spending permits this to moral tragedy to exist.
O tempores O mores.
Liberals love fighter planes when the jobs are in their districts.
http://www.freep.com/article/20110818/BUSINESS06/108180439/Politicians-other-leaders-attend-demonstration-F35-fighter-plane?odyssey=mod|newswell|text|FRONTPAGE|p
Docs have to pay their bills too, and many of them do a lot of work for which they know they will never be paid.
rusty,
If you were managing the cash budget for a military contract you would be looking the other way about work packages “completed” or even started that claim earned value.
Call it the dole.
That F-35 cockpit simulator is about as close as anyone gets to a flying one these days.
Yes it is a jobs program, very high techie wages for retired officers etc on the dole.
str,
I’ve said this beofre. But both times when I got to NoVA I sought out the best doctors. I talked with airline pilots, lawyers and even doctors. basically a lot of my neighbors. And none of the docs would talk with you if you were Tricare/Medicare/Medicaid payer. Zip. As one that lived two doors down and my kids played with his said (to paraphrase), “I lose money when you walk in the door with government insurance.” I had appointments made and then summarily canceled when I mentioned I was on Tricare. At least two places started off, when I stated I was new to the area and looking for a family doctor, that they were accepting new patients as long as they had insurance not including Tricare/Medicare/Medicaid.” Heck even the Tricare office could find a doctor – and I wasn’t going to some 1 person operation with a degree from East BFE.
BUt I would bet 98% of the docs in LA and Mississippi take gov insurance. Just not in high C-O-L areas It just doesn’t pay.
So that’s why you get these NATIONAL stats. See what kind of response you get to gong to the top docs in SF or LA and say your on Medicare…
Islam will change
Hi Rusty:
I can not object to any of your observations. Specialists make more than primary care and fewer med students are becoming primary care doctors. The money is not there and they go elsewhere. It isn’t just the money though and there are other factors.
The terminology you are utilizing is correct also. Some primare care doctors are restricting medicare patients or they are not taking on new ones. There are some as you detail who are not accepting any medicare patients. In any case, it is not near the percentage critics of healthcare reform and medicare are proclaiming. As CoRev points out in a negative fashion,, it is far less and it is divided into categories as you detail. The ACA law does make an attempt to correct the problem by increasing reimbursements to primary care doctors at the expense of specialists.
As you also describe, some specialties are over utilized and this does fit the services for fee model of healthcare and also defensive medicine. Why change if the cost model covers the overhead plus some? Hospitals depend upon Medicare as much of their fees come from it. While some doctors may be able to rject medicare and medicaid patients exclusively, it will only be those who can afford to do so and not the majority as some believe or proposed.
Thanks rusty for a level headed reply.
another example:
In the first two and a half years of her illness, Marjorie received treatment from thirty-two doctors in six hospitals. She and her husband, Tim Noah, also an accomplished journalist and a friend of mine, were shrewd and well connected. They consulted with many medical luminaries in search of the very best care and treatments. And yet their quest for quality in health care was as disappointing as Robin’s and mine.
‘My most memorable brushes have been with an eminent surgeon,’ Marjorie wrote in her next-to-last column for the Washington Post, ‘whose method is to stride into the examining room two hours late, pat your hand, pronounce your certain death if he can’t perform an operation on you, and then snap at your husband to stop taking notes, he can’t possibly follow the complexity of the doctor’s thinking.’ In the same column, Marjorie described another memorable moment on her journey.
During one hospital stay, as I sat in a wheelchair outside Radiology waiting to be pushed back to my room, I began idly flipping through my chart. A young female doctor in training I had never seen before stopped in front of me and said,
‘You know, you really shouldn’t be reading your chart.” I thanked her for her advice and continued reading. She repeated her admonition.
I explained that I was 43 and couldn’t possibly read anything worse there than I had already been told by five real doctors. Upon which she actually wrested it from my grasp. (From this I learned always to go to a stall in the ladies’ room when I want to read my chart.’
Phillip Longman, “The Best Care Anywhere,” details two experiences of families who were luckier than normal in life with better than average healthcare insurance, coming from the upper middle classes of society, whose members succumbed to the illnesses they possessed in spite of their coverage and the hospitals they were in, and the specialists who cared for them. All of the specialists and the best hospitals in the world could not fix what was broken and provide the best of care. The care received was exceptional by treatment but lacked in quality overall.
Medical errors are less common in the VA than elsewhere in the healthcare sector.
Those two examples are about Timothy Noah’s wife and Philip’s Longman’s wife. They were luckier than average in income and in the type of insurance they had. I will say it again, “Quality can never be correlated to or guaranteed by the amount of money we pay.”
Time to change the paradigm
ilsm:
Two wars, the 2001/2003 tax breaks, and a recession have certainly wreaked havoc for all of us. We certainly did not take the road least traveled and have gone down the same road our predessesors have traveled with great frequency, enough so it has been paved with good if not silly intentions.
It is time to change the paradigm
Run,
National surveys have put the number who don’t take new Medicare patients as low as 14 percent,
You are using a self reporting survey as your entire rebuttal? Maybe as part of a lot of other evidence, but on it’s own, extremely weak.
However, I will stipultate that it is true. For the time being. But I guarantee that it won’t be true in the future. With all the budget pressures, reimbursements will be a continual target, as doctors are a very small percentage of the electorate. Then the government will require that they take whatever reimbursement the government gives them as a condition of their license. It is inevitable.
Sammy:
Of course you and your ilk can kill healthcare reform as we know it. After all, yours truly killed Hillarycare with the help of Elmendorf which was 20% of today’s cost, so why not now?
The budget pressures are not the result of medicare, medicaid, socai security. They are the result of a recession which never ended since 2001, lack of job creation, two wars, the 2001/2003 tax breaks focusing 31% of it on 1% of the taxpayers, and a party of “No”rgrist Republicans (this is no the party of Goldwater which I was once).
You wish to destroy and I wish to build and not balance the budget on the “backs of the poor, the elderly, and the children” of this nation the same as Bush promised in 1999 when campaigning for the Presidency.
I did not design the surveys, the AMA did, etc. When did you know the AMA s being pro-ACA? Hmmmm????
Very true, They are human also.
How big a deal is Medicare SGR?
This big according to the AMA:
SGR Chart
http://www.ama-assn.org/ama1/pub/upload/mm/399/nac_costs.pdf
Future bleak for seniors, baby boomers:
Medicare to cut payments as boomers enter the program.
Without congressional intervention, Medicare physician payment rates will be cut about 40 percent by 2016, while practice costs will rise nearly 20 percent. These cuts come at a time when Medicare physician payment updates already lag far behind increases in the costs of caring for seniors. In 2011, the leading edge of the baby-boom generation will start enrolling in Medicare, with enrollment growing from 44 million in 2011 to 50 million by 2016.
Reported costs have been falling because people are now cutting back on medical care. This holds true for normally insured and Medicare. This will lead to a tipping point as the maximum number of dollars going to the health industry has now peaked. The last real growth area of the economy will now roll over into decline.
Profits may be squeezed higher for a bit longer as more and more people with insurance get less and less good or effective treatment per dollar while those uninsured get less and less period.
Still as an economic story not a social one the health care industry is now past its peak.
MG:
The wild statement is from you and silly. Medicare, Medicad. commercial insurance, etc. are a reflection of the rising cost of healthcare. So instead of following the stupid, why not understand what are the root causes and what is truly driving healthcare costs? It is not the programs.
Thanks for all the homework; but, you need to write about them and explain them. I am not reading them. Furthermore, you are disussing the symptoms and not the root cause.
Unemployment never decreased to what it was even after 2001. Why am I making such a claim? Participation Rate remains below the level experienced immediately after the proclaimed end of the 2001 recession and below the explosive later nineties. Officially it may have ended as declared; but, employment still remained high as shown by participation rate plus unemployed.
The growth as shown by GDP was led by a growth in financial services which did not employ labor. This was the CDS, tranched CDO, naked CDS. “The figures on profits are even more striking. For example, the financial services industry’s share of corporate profits in the United States was around 10% in the early 1980s but peaked at 40% last year(2007)”. What the f*ck, what does it take to convince you. you are blowin smoke up mine? You find where the quote came from. I am not your librarian.
If you wish to find the 30 or so%, google it. Its there or I would not have quoted it.
MG:
AMA represents (yawn) less than 20% of all doctors. The SGR was not created by Obama and there are plans to forestall it . . . again. Know the topic before you approach me again. You have not done enough research (other than C&P) to dicuss it with me. I do not have time for your nonsense. You have a lot of catching up to do.
run75441,
Your statement, “The budget pressures are not the result of medicare, medicaid, socai security” is pure nonsense. It’s laughable to pretend that Medicare and Medicaid direct outlays from the general fund do not create federal budget pressures. Hell, just look at the data as it speaks for itself on that point.
It has been apparent for a long time that you’re poorly informed on the federal budget. Apparently, you don’t understand what is unfolding in the FY2012 federal budget process in the the U.S. Congress or in the G-7 negotiations that President Obama signed on to.
I am not surprised that someone who is ignorant on how the federal budget process works is unwilling to look at either U.S. Government link that I provided. Wallow in stupidity for all I care. I presented the government data that anyone should be able to understand without holding the person’s hand and explaining it as if in the first grade.
I’m not focusing on the root causes of healthcare cost increases when I am presenting budgetary data that Members of Congress are reviewing as they make decisions to cut the future federal budgets. I have read many studies of healthcare cost increases but that doesn’t change the real world situation that is unfolding in the halls of Congress or over at the White House.
You appear to take pride in being a federal budget dummy. Astonishing as that is.
run75441,
How big of an ass do you intend to be for no reason? You’re an arrogant, immature blowhard.
I know which Congressional act initially created the Medicare SGR and which acts modified it since that time. I never said that Obama created it. That’s some imaginary creation in your mind that you’re stupidly trying to use as a putdown with a participant of Dan’s blog, Angry Bear. Stop inventing things.
I identified the FY2012 federal budget proposal from President Obama which identifies the projects costs for SGR relief and the offsetting cost reductions identified in the budget proposal. I am confident that you haven’t read the FY2012 federal budget based on your crazy reactions on this thread.
You didn’t even mention the June 2011 government report on SGR. And yet you want to pretend to be the know-it-all that others should bow down to for some self-serving ignorant reason. That’s laughable.
I know the percentage of doctors that the AMA and AAFP represent. So what? Do you want to pretend that their survey results were false? Hell, you quoted one survey result. I didn’t hear anyone whine about that.
You’re too full of yourself to be a good main poster at Angry Bear. Your boastful, chest beating attacks on an Angry Bear participant are unwarranted as they have been in the past.
You have no emotional self-control or respect for others. None whatsoever as you have demonstrated on a few occasions with Angry Bear participants this week. What a joke, fellow.
rapier – “Reported costs have been falling because people are now cutting back on medical care. This holds true for normally insured and Medicare.”
Point well taken.
I have read a few articles that indicated that.
I talked to my heart surgeon this afternoon and another specialist earlier. Both support what you have stated. The decline in appointments is notable according to them, particularly among private insurance patients who are being careful with their out of pocket costs vs their deductible limits, some of which have been raised to save money. The specialist said that he had not raised his prices as a result of the recession in an effort to hold the line on his patient load. Still, his appointments are down considerably.
I spoke with a few other individuals elsewhere in the nation including a doctor in Ohio. Same story. They concur down the line. One of the individuals I spoke with this evening is a blogger at Angry Bear. He agrees with you.
I have reduced my visits and procedures to a minimum after having increased my deductible to save on insurance payments. I really didn’t believe the higher deductible would change my behavior but it did. And I think that has something to do with my overall change in spending behaviors. Quite a difference from two years ago. It’s rather amazing how far I go to consolidate my business and personal trips. I have plenty of
money for gasoline, but I refuse to waste it.
MG:
You have proven nothing other than you have a complusion to copy links and paste them to Angry Bear with little understanding of the content. Obsessive-Compulsive appears to be your modus operandi.
Keep trying though . . .
rapier:
Why is the growth in Medicare, Medicaid, and private healthcare costs decreasing? Obviously, the ACA and is cost decreasing initiatives has not come into play. There is one factor which is being played out in the overall healthcare industry . . . the industry is looking ahead o the implementation of healthcare and planning for the future. Isn’t business supposed to do this?
Again back to Blitzer and the S&P indices report:
“many participants [in the healthcare system] have indicated that providers are trying to address health care reform and are looking for ways to control costs. If true, this combination certainly would be a contributory factor to the moderation in cost we have witnessed since early 2010.”
A former special adviser for health policy to White House Office of Management and Budget director Peter Orszag and a doctor stated:
“This is not mere chance, this is directly related to the initiation of health care reform and it is not the result of reform. The reform measures that will rein in Medicare inflation have not yet been implemented.”
He adds:
” providers are “anticipating the Affordable Care Act kicking in.” They can’t wait until the end of 2013: “They have to act today. Everywhere I go,” Emanuel, added, “medical schools and hospitals are asking me, ‘How can we cut our costs by 10 to 15 percent?’
The healthcare industry is beginning to look at the cost drivers of their business and looking for ways to cut the fat out and while it might be one of the biggest growth factors in the US economy, it is one based upon inefficiencies and extragances which can no longer be tolerated in the cost of providing a service to the population. The very same as manufacturing in the US, the overall industry must begin to streamline its operations to gain its profits and forgo the fee for services model which it has followed for decades. In its present format, no matter how many times you increase your deductible, the healthcare industry will outstrip your ability to pay as our growth in income will not keep up with it.
VA… I meant Virginia and DC
I wish more of this would evlolve in the discussions….the issues are not simply fiscal and government spending as part of a deficit crisis. Changes to medicare payments are not divorced from problems in the private sector, nor are they separate in nature from private sector systems as both try to deal with our current arrangements. But then we are not discussing changes in medicare programs that could be made within the current structure.
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