Cutting Medicare payments to physicians is poor policy

By Dale A. Reigle

In early November, Medicare announced it will cut its Physicians’ Fee Schedule by 27.4 percent in 2012.

Some members of Congress characterize this move as “eliminating a big increase for physicians.” They point out that Medicare will pay more to physicians in 2012 than in 2011.

This is true. Medicare will pay more to all physicians as a group, for all services to all Medicare patients because, with the aging of the Baby Boomer generation, the number of Medicare patients grows by almost 10,000 people per day.

However, what your personal doctor will be paid for providing a single medical service to you if you are a Medicare recipient will be reduced by 27.4 percent. This is an important distinction.

While Washington politicians view Medicare from a macroeconomic perspective, they ignore the impact this cut will have on you and your doctor as individuals. Simply put, your doctor will have little economic incentive to see you as a patient.

In fact, such a cut could result in some services costing the physician more to provide than he will be paid. The bottom line is that seniors will find it difficult to find a physician who is willing or financially able to provide services to Medicare patients if the cuts go through.

Many of those who lament the cost of health care act as if the practice of medicine is a black hole in the economic fabric that sucks money into a void from which it can never return. They disregard the fact that health care is often one of the biggest economic drivers of the local economy, especially in a small city or town.

On average, a private medical practice will employ four to five people per physician. It will purchase office supplies, lease equipment and buy furniture. It will purchase or rent building space and pay property taxes. The practice will order medical supplies and equipment, use the services of accountants, attorneys and other local professionals, and support local schools and organizations with charitable donations. The money that is left over goes to physicians who purchase homes, buy groceries and go to the local movie theater. Health care dollars don’t vanish, they get recycled.

Health care does account for a large part of our national spending. It also accounts for a large portion of national employment (over 11 million people in 2010). The majority of these workers are not doctors (who only account for about 600,000 of the 11 million). They are receptionists, medical assistants, medical record clerks and X-ray techs. They are the middle-class wage earners.

It does not take a genius to realize that when the amount paid to a physician for a service is not keeping up with inflation, cutbacks will occur. Unfortunately, Washington has yet to make this connection between economic uncertainties in medical reimbursements and unemployment numbers.

Health care spending does need to be brought into control. However, policies that discourage intelligent young people from becoming doctors are not the way to achieve this. We need the best and brightest students to become doctors who will champion preventive care, develop evidence-based, best-care models to treat diseases and find new ways to prevent injury. Poor policies that increase administrative burdens on medical offices and discourage doctors from seeing Medicare patients will never be the right cure.

I urge people to write their representatives today. Let them know that your doctor is not the enemy and punishing the doctor is poor policy. The cuts to Medicare physician payments will decrease seniors’ access to care now and cause critical shortages in doctors in the future.

It is your health and your tax dollars. Make sure Congress cuts wisely.

Dale A. Reigle is CEO of Rocky Mountain Orthopaedic Associates in Grand Junction.


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