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Medicare Doctor Crisis

Written By Brian Hicks

Posted July 30, 2013

According to the U.S. government’s Centers for Medicare and Medicaid Services, last year we saw a tripling in the number of doctors opting out of Medicare, reports the Wall Street Journal.

medicareTaken alone, that fact isn’t very alarming, but it is seemingly part of a trend wherein doctors are working to reduce the number of patients under their care who are on Medicare even if these doctors are not outright leaving the system)

This trend could be indicative of an increasing frustration that’s being felt widely regarding Medicare’s payment rates and the increasingly onerous paperwork and regulatory compliance it entails. That’s not good news at a time when numerous states are already dealing with the impending fallout from the Affordable Care Act vis-à-vis Medicare and Medicaid.

If doctors are either opting out of Medicare or accepting fewer patients on it, then they’re accepting even fewer patients on Medicaid as well. What’s growing is the number of patients on private insurance contracts—just as the Affordable Care Act is about to offer several millions more the option to purchase such insurance. Could it cannibalize the ACA? Probably not. Still, it’s a curious time for such a trend to emerge.

It looks like last year, 81 percent of family doctors took on new Medicare patients compared to 83 percent in 2010. As well, there was a slight increase—4 percent, up from 3—in the number of family doctors who offer a “concierge” service, whereby patients can pay yearly or monthly fees for special access. And over 2010-2011, some 33 percent of primary-care physicians just didn’t accept new Medicaid patients.

It’s possible that the increasing pace of departures from Medicare is a symptom of a system that has not kept its payment rates in check. After all, a 1997 budgetary formula courtesy of Congress still means doctors could see reimbursements from Medicare fall by as much as 25 percent next year unless some action is taken. Certainly, it’s been delayed repeatedly, but it’s still not a long-term solution.

From the Wall Street Journal:

“Medicare has really been pushing its luck with physicians,” said economist Paul Ginsburg, president of the nonpartisan Center for Studying Health System Change. “By allowing the SGR and its temporary fixes to persist, Medicare is risking a backlash by senior citizens who say, ‘Hey, this program isn’t giving me the access to doctors I need.’”

Extensive Overhauls Needed

So on the one hand, we’ve got doctors becoming exasperated with the measly reimbursement rates offered by Medicare, while on the other hand we’ve got doctors wary of the increasing size of the government’s hand in Medicare.

As many might recall, the U.S. government currently offers some incentives to doctors switching to electronic medical records systems in an effort to coax a systemic transition over to such newer records systems. On the flip side, those doctors participating in Medicare who don’t do so by 2015 will actually end up having to pay penalties.

Another area that’s come under much scrutiny is the rate system according to which Medicare pays for physicians’ services (this is a major market—as of 2012 it was worth $69.6 billion). The problem, as the Arizona Daily Star notes, is that doctors themselves have minimal involvement in the process.

The Relative Value Update list is determined by a 31-member panel of the American Medical Association, and the big problem is that the panel is often woefully out of touch with rapidly changing medical technologies and systems. Thus, the system heavily favors specialists over primary-care physicians, leading to a clear hierarchy in American health care at large.

As of now, it seems the House is looking into a bipartisan bill that would reform Medicare so doctors’ time usage data can be collected and Medicare payments adjusted accordingly. Of course, that won’t really go far in overhauling Medicare as extensively as is needed. But it’s a start.

The bigger problem looms as the Affordable Care Act prepares to make its entry in the very near future. Given that many states continue to grapple with Medicare and Medicaid problems, it’s a concern that the ACA might actually make the situation worse by adding onto the regulatory and compliance pressures. We’ll have to watch how things develop.


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