Wednesday, September 16, 2009

Baucus offers plan to extend coverage, cut deficit, and increase primary care fees

Today, Senator Max Baucus (D-MT), chair of the Senate Finance Committee, released his version of health reform. ACP is analyzing the bill, so I'll have more to say about it in subsequent blogs. A few highlights, or lowlights, depending on your point of view:

The CBO projects that the bill will reduce the deficit by $49 billion over ten years, and that likely it would to continue to reduce the deficit in subsequent years.

It is financed principally by a tax on insurers who sell high cost health plans and by savings in Medicare and Medicaid. There is no direct tax increase on higher income persons, as in the House bill, although the insurance tax on high cost health plans likely would be passed onto to people enrolled in such plans.

The bill bans most insurers from excluding or cancelling insurance based on a person's health status or pre-existing condition, and limits the factors that can be used in setting premiums.

It provides subsidies for people up to 400% of the federal poverty level to buy coverage through an exchange (purchasing pool), but the subsidies are much lower than in the House bill. With the result that out of pocket costs will be much higher, especially for younger persons.

Individuals seeking subsidies or coverage through an alliance would have to submit documentation that they are in the United States lawfully.

The bill provides additional funding for states to expand Medicaid to 133% of the federal poverty level.

It does not include an employer mandate. Instead, large employers who do not cover their workers will be required to pay the costs of any federal subsidies extended to those workers.

No public option; instead, regional non-profit cooperatives are proposed to compete with private insurers.

Everyone, with only a few hardship exceptions, would be required to buy coverage.

On physician payment, it would provide only one year of relief from the Medicare SGR physician pay cuts (0.5% increase instead of a 21% cut in 2010), paid for in a way that will cause an even bigger cut the following years. Congress would then need to pass legislation next year to halt the subsequent years' cuts, at an even bigger budget price tag.

Senator Baucus proposes to give general internists, family physicians, pediatricians, and geriatricians a 10% bonus payment for designated office visits and other evaluation and management services. Half of this would be paid for with additional federal spending, the remaining by a small (half percent) across-the-board reduction in Medicare physician fee schedule payments. The House version, H.R. 3200, proposed a 5% primary care bonus paid for entirely with new federal dollars (no budget neutrality offset to other physician services).

Oh, and despite months of working to get GOP support, Chairman Baucus had to admit that as of now, not a single Republican has signed onto the bill, although he expressed confidence (hope?) that he'd have some level of bipartisan support by the time that the Senate Finance Committee takes up the bill next week.

I expect that ACP will find some things we like in the Baucus bill, but other things - especially the fact that it just kicks a solution to the Medicare SGR pay cuts down the road - are likely to be of real concern. I am interested though in readers' initial reaction to the proposal, and especially to the idea of giving primary care physicians a bigger raise, paid for in part by a modest reduction to other physicians.

Today's questions: What is your initial reaction to the Baucus plan? Is it reasonable to ask all physicians to chip in a half percent of their Medicare fees to help fund a 10% increase in designated services by primary care physicians?


Unknown said...

I commend the senator's efforts but the SGR needs to be fixed. By the way, should we really be celebrating a 0.5% increase in reimbursement every year? We need to pay attention to the consumer price index which has increased at a rate greater than three percent per year over the last decade (the rate of rise in overhead for a medical office is even higher). The difference equates to continued decline in physician salaries.

Arvind said...

From reading your initial observations, it seems to have more negatives than positives. It seems to be more friendly to business interests.

Robbing specialists to pay generalists is no shocker, but will finally convince most specialists to get out of Medicare or at least not accept any new Medicare patients (since consultation codes are being scrapped by CMS independent of Congressional action). So primary care docs can enjoy managing all complex multisystem problems that are currently managed by specialists. Congress and Sen. Baucus will soon realize that Specialists are worth a lot more than they give them credit for. I hope ACP does too.

Kicking the SGR problem further down the road is irresponsible. However, its probably a boon, because it will convince more physicians to finally muster the courage to opt out of Medicare, since engaging in a yearly ritual of letters to Congress, and fielding e-mails asking for support from all our dear organizations, is simply unsustainable.

Unknown said...

I would rather not steal from my fellow colleagues just to give myself a raise, but hey, thats just me. The other thing that might work is maybe letting the free market dictate prices and reimbursements and get the government out of this whole debacle...

Unknown said...


Like many, I'm concerned that the health insurance reform measures do little to lower the impending bankrupcy of the Medicare "Trust Fund", and the impact of the proposals on future deficits. Afterall, the Chinese have $1.5 trillion in US bonds (debts!), but I do not believe that they will support major increases in deficits(see "China Owns Us, and They are Getting Nosy" by Noam Schrieber in the 9/15 issue of The New Republic). The president has pledged to "sign no bill that increases the deficit by one dime", which essentially means that HR 3200 cannot pass. I view the Baucus Bill as certainly better than the status quo and as a floor for negotiations between the House and Senate. At least we now know the 2 ends of the spectrum and we will end up somewhere between, but I predict it will be closer to the Baucus bill than HR3200. Still waiting for the elusive long term fix of the SGR. Ceci Connelly in the Post noted that liberals hate the Baucus proposal, and so do conservatives, hence it just might pass! Like many, I appreciate the 10% boost for primary care.

Jay Larson MD said...

No surprises in the Baucus plan as I have followed health care reform all along.

The 10% increase in primary care reimbursement and increased primary care residency slots won't dent the primary care decline. The grass is still greener on the other side of the fence (subspecialties).

Subspecialists should not balk at a 1/2% decrease in reimbursement as they make 200-500% more than primary care and don't have the administrative hassles that primary care docs deal with on a daily basis.

Besides without primary care, the health care system will become increasingly fragmented, over-specialized, and inefficient—leading to poorer quality care at higher costs. SO much for bending the cost curve.

Yes, having subspecialists around really helps with single organ system problems, but most of the complex multi-system problems are managed by general internists.

Unknown said...

My friend and colleague, Jay Larson,MD has it right. Here in Senator Baucus's home town, my time as a specialist is paid at 3-4 times the rate/hr as Dr Larson's much more difficult care of complex patients. A 10% raise helps but will not stanch the crisis we and many other cities have in providing good primary care. Nothing short of a total restructuring of the reimbursement system will work to save primary care. Likewise, only such a restructuring will begin to curb the entrepreneurial-driven excess use of procedures and tests that is a prime driver of the outrageous costs in our present "system". I think the senator has tried very hard, but time is short. The health care bubble, like "dot com and subprime" is poised to burst.
Ken Eden M.D.

Arvind said...

I don't know how Dr. Larson gets his figures. Lumping all specialists in his overpaid group is very inaccurate. Non-procedural specialists like myself actually make less than general internists. So such broad strokes usually produce an actually ugly picture.

BTW, Obama is clubbing physicians, NPs, PAs, etc in the "primary care provider" category. Good luck competing with Walmart and CVS primary care clinics, Dr. Larson. If you were ever a citizen of an occupied country you would know that historically "divide and conquer" has been the motto of all occupiers! Let us not allow Congress do that to our profession.

Rich Neubauer MD said...

From the initial ACP material on the Baucus bill that I've seen and heard, I think I would be very disappointed if that is what comes out the other end of health care reform. More importantly, I think the American people as a whole would not be pleased with the results it would reap

Furthermore, leaving the reform effort without solving the SGR problem is unacceptable. Regional Co-ops are a cop-out. Perhaps the path to salvation is to get a bill -- any bill -- out of the Senate so that a House - Senate consensus committee can hammer out something that can get out of both houses. It should be an interesting few months to come.

I think the sum of all efforts to re-build primary care for adults is laudatory and a substantial pay increase for primary care is sorely needed. Further, I think that pay increase needs to be associated with new payment methods such as management fees. The rapidly widening gap between what procedure oriented sub-specialists and generalists are earning has also been toxic to having robust primary care. At the same time, I think it is not the role of generalists (or for the ACP) to "advocate" for taking money from other physicians to pay for increases in their pay. ACP policy on this is already clear, and the college should remain mum on how this particular aspect of the debate turns.

Joseph said...

The Baucus bill gets good financial marks largely because it ignores the SGR fix. Health care reform will not work unless we fix the SGR and move on to better methods of payment that incentivize value and quality. Health care reform must also solve the primary care crisis. The 10% increase for primary care is a start but not at the expense of our nonprimary care collegues. Primary care achieves saving through decreased utilization of expensive services like ER visits and hospitalizations, better coordination of care, and fewer errors. The increase in primary care payment should come from these savings and not off the backs of our colleagues.

DrJHO7 said...

The Baucus proposal is unacceptable because:
1. It does not repeal the linking of physician reimbursement under MCR to the flawed SGR formula (but for the first year).
2. It does not solve the problem of upward spiraling cost of private health insurance, would probably worsen it (tax cost passed on to consumer/purchaser).
3. The "requirement" that all must purchase health insurance is flawed because it is unenforceable, and the subsidies provided will not likely be sufficient to make it realistic for many of the uninsured to purchase the more expensive private health insurance - I think many would continue to forgo this expense and take their chances.
4. It does not provide a compelling competitive force to lower the premiums of the private insurers. Cooperatives would have little effect other than to market private health insurance plans.
5. The pattern of MCR cut (2001, 5%), 0% and 1% per year increases in physician payment under MCR since 2001 have allowed practice overhead expenses to soar, unabated relative to reimbursement, and continue to contribute to the financially non-sustainability of private medical practice, particularly for primary care physicians. Further cut in MCR pay for physicians is unacceptable. The boost in pay for primary care physicians is fine, but as another blogger pointed out, is insufficient in and of itself to have a significant impact on the avoidance of general internal medicine and family medicine as specialty choices for medical students - that issue is much more complex.
5. As with HR 3200, tort reform is ignored.
6. As others have pointed out, if we do not achieve health coverage for all US citizens as a starting point, then the effect of reform will be impotent. I believe that unanticipated health care cost savings will be realized by providing such coverage, with its potential effect on improving health outcomes (thereby decreasing the cost of treatment of late stage disease) and a shift from the economic effect of lack of coverage on providers and institutions. Health care work force manpower issues, especially on the primary care side can be a stumbling block, as shown on a smaller scale with the Massachusetts experience. Reform efforts will be more effective if they address the skyrocketing cost of pharmaceuticals for patients/healthplans, and if there is redistribution of payment from lucrative imaging and medical procedures to E&M services.

Jay Larson MD said...

My apologies to Arvind. He correctly pointed out that not all specialties can tolerate the 0.5% hit proposed. I was thinking of procedure performing specialists when I wrote my post. The cognitive subspecialties are getting the short end of the stick with reform, even though they are primary care providers for certain populations. Infectious disease specialists take care of AIDs patients, endocrinologists manage difficulty to control diabetes, and neurologists care for persons with multiple sclerosis and Parkinson’s.

What really needs to be reformed is the RVU system. It should not be primary care physicians pitted against specialists but a shift of value from procedures to cognitive skills. Ironically, The Resource-Based Relative Value Scale or RBRVS, was designed and implemented to reduce the inequality between fees for office visits and payment for procedures, but this system failed to prevent the widening primary care–specialty income gap.

In regards to competition from Walmart and CVS primary care clinics, they would not want to deal with chronic illness. Primary care for persons with multiple chronic illness requires, time, compassion, experience, and intelligence. This is challenging to provide considering the cost of running a practice and the current RVU system.

Again, my apologies to Arvind. Even though it may not appear so in previous blogs, but I respect and appreciate my specialist colleagues for helping with the difficulty cases. On the flip side, my specialist colleagues appreciate the primary care that I provide to patients.

jfddoc said...

I see that Sen Rockefeller has an ammendment to abolish HSAs as part of the Baucus Bill. This seems to be counterproductive for insuring as many people as possible.

Arvind said...

Thanks to Jay for the admission