The ACP Advocate Blog

by Bob Doherty

Friday, June 11, 2010

Tough choices on the SGR

With the clocking ticking down to the point where Medicare will have no choice but to start implementing the 21% SGR cut, Congress still has not been able to agree on a solution. The House has passed a short-term, 19-month fix that will replace the cut with positive updates through 2011. The Senate has yet to act on the House’s bill or decide on its own alternative.

Part of the problem, though, is that physicians are not united on what they want. Although everyone in medicine agrees that we want the SGR repealed and replaced, the simple fact of the matter is that there is no way to get 60 votes in the Senate (or for that matter, a majority in the House) to vote for repeal when the price tag is over $230 billion—money which would have to be found by cutting Medicare somewhere else, reducing Social Security benefits, or raising taxes under pay-as-you go laws.

ACP’s position has been that if Congress decides on an approach that falls short of repeal, it should at least provide more stability than 19 months, and it should begin to move payments to a better framework that could be the basis for eliminating the SGR in subsequent legislation. With ACP’s support, House and Senate leaders, just a few weeks ago, were hoping to get agreement on a plan to provide five years of stable updates, during which payments for the last three years would be based on a new formula that would allow physician services to grow at a higher rate than the SGR, with an additional growth factor for primary care visits and preventive services. This approach was abandoned, in part, because it did not have across-the-board support within medicine. The House then proposed a similar approach, but for only three-and-a-half years. When that failed to attract enough support, the House came up with its 19 month fix.

Now, the Senate is considering offering an amendment to go back to the House’s idea of a three-and-a-half year plan that would begin to move policy in the right direction. ACP expressed support for the plan, in a letter to Senator Debbie Stabenow (D-MI), the likely sponsor of the amendment. The American Academy of Family Physicians and American Osteopathic Association also support it. But its prospects remain uncertain, at least in part, because not all of medicine is rallying behind it, and some Senators are still unwilling to commit to anything that has a practical chance of stopping the cut and moving payments to a better system.

We all want SGR repeal, but at some point, the question becomes a simple one. Do we go along with another 19-month patch that does nothing to move to a better system? Or do we rally behind a plan to provide longer-term stability that also begins to move us to a better payment structure, one that would allow spending on all physician services to grow at a higher rate than the SGR and provide an additional spending growth allowance for primary care visits (including visits billed by subspecialists) and preventive services code? Or do we say we can only support complete repeal , when there aren’t the votes for repeal, and we likely will then end up either with the cut, or a short-term patch that does nothing to move to a better payment system?

Today’s question: What would you choose?

3 Comments :

Blogger Robert J. Sobel, M.D. said...

The game of chicken has gone on a long time. I guess it is a Congressional device. I disagree with you on the united front issue. I guarantee you could pose lots of SGR-related questions and get near consensus. I also think physicians are a lot more reasonable than the organizational constructs that dot the landscape of our new legislation.

The tough choice remains the Medicare participation one. It has also been a 95 + % consensus to date. It is a remarkable testament to physicians, and it is also a reflection of the fact that there is no legal middle ground.

The AMA's original opposition to Medicare was its exclusion of a balance billing option. Let the government set a fee, it was accepted, but don't penalize those who feel they command more, and those patients who wish to pay the difference (not the op-out, private contract penalty as it currently exists).

$230 billion can be garnered by savings elsewhere in Medicare. As recently as the Senate Finance Committee hearings (and I'm sure since), the 10% number for pharmaceutical costs has been bandied about. This is clearly obsolete. The recent NEJM report on Medicare pharmaceutical costs shows it unequivocally. The ongoing administrative costs may be unquantified but are nonetheless real and I'll be another $100 billion minimum.

I am a primary care diabetelogist. We could more aggressively prescribe metformin (like some supplement proponents have done for years with a myriad of false elixirs, but here with the emerging science of a 50 year old drug). At a cost of $10-20 per month, the favorable effect on long-term health outcomes would be even more impressive than it already is for the millions who currently utilize this drug. On the other hand, I can explore the clinical utility of Victoza and add $4000 per year to that patient's annual outlay. How can I be asked to use cost effectiveness to inform my decisions with these kinds of extreme pricing differentials?

I implore Congress, Secretary Sebelius, the President, the ACP, and the AMA to stand united against this pricing free-for-all that is every day distorting the practice of medicine. With Walgreens and CVS fighting over pricing arrangements (How come Stark does not take this on?), we are all left getting squeezed.

I promise to provide adequate savings for the doc fix, in a way that will not punish patients, providers, hospitals, or the manufacturers of medical products (the latter may just have to collect money more slowly but over a longer period).

I'll give you 33% if you like. For a start, how much would we save if we immediately outlawed health care advertising on TV?
How many physicians would agree on that? How about divesting all health insurance companies and medical entities from public shareholder investment? Let's start a dialogue on returning some sanity to health care financing?

June 12, 2010 at 2:03 PM  
Blogger Arvind said...

Why was the ACP not asking this question and demanding and answer before the PPACA was passed? Why is it that our organizations always end up trying to salvage a situation when they have had innumerable opportunities to rectify it earlier?

What would I choose?
* I would choose going directly to the patient and asking him/her what value he/she places on the service he/she receives from my office and if he/she is willing to pay appropriately for that service.
* I would choose to eliminate the use of CPR codes for my E&M services and ask patients to pay me for my time and service, not for some arbitrary "code" that the govt forces me to use in order to get paid.
* I would choose to say good bye to Medicare but not to my Medicare patients.
* I would also choose to say goodbye to all the organizations that have taken my membership dues for years and have sold me out to the lowest bidder.

You folks can sit around the proverbial table and continue the "negotiations". Sorry to say, but this has become very similar to the "peace process" in the middle-east, that I have heard of for almost all my adult life. We (in the private practice community) have already moved ahead; it is up to the ACP and others to decide if they want to join us.

June 13, 2010 at 10:17 PM  
Blogger Steve Lucas said...

As a business person this is a straight forward issue. We cannot expect young doctors, struggling under a crushing debt load, to choose front line medicine with no certainty of future income.

We cannot expect current doctors to remain in front line medicine as their incomes decline, and other more profitable opportunities, become available.

Trust me. Loosing money on every unit/client/patient and trying to make it up in volume does not work.

Steve Lucas

June 14, 2010 at 5:17 PM  

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About the Author

Bob Doherty is Senior Vice President, American College of Physicians Government Affairs and Public Policy; Author of the ACP Advocate Blog

Email Bob Doherty: TheACPAdvocateblog@acponline.org.

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