Thursday, July 30, 2015

Medicare and physicians, 50 years together: it’s complicated

Fifty years ago today, President Lyndon Baines Johnson signed Medicare (and Medicaid) into law.   Medicare’s relationship with physicians since then can best be described as a complicated one.

First, recall that Medicare became law notwithstanding the American Medical Association’s fierce opposition to it. Three years prior to its enactment, AMA President Ed Annis warned that "We doctors fear that the American public is in danger of being blitzed, brainwashed, and bandwagoned" by the Kennedy administration’s proposal to provide compulsory health insurance to the elderly.  The AMA continued to fight tooth-and-nail against Medicare, even after the Johnson administration took up the cause following President Kennedy’s assassination.   After Medicare was enacted, however, the AMA came to the table to negotiate with the administration on its implementation. The ACP, for its part, did not participate in the debate over Medicare’s enactment, but once it became law, the College “began to realize that it could no longer limit its mission to education, professional standards, and fellowship: it had to became an advocate in policy and political arenas” as Dr. Lynne Kirk and I recount in the chapter "The American College of Physicians and Public Policy" in the recently-published Serving Our Patients and Profession: A Centennial History of the American College of Physicians, 1915-2015 (available for purchase in the ACP Catalog).

Second, despite the AMA’s forebodings, physicians and their patients have flourished under Medicare.  Before Medicare, seniors were often uninsured and many lived in poverty.  “While 48 percent of the elderly lacked health coverage in 1962, today just 2 percent do. And while the 15-year increase in life expectancy at age 65 achieved between 1965 and 1984 cannot be wholly attributed to Medicare, without its coverage many elderly Americans would simply not have had access to the medical advances that also have contributed to rising longevity” observes the Commonwealth Fund.  “In the early 1960s, the choices for uninsured elderly patients needing hospital service were to spend their savings, rely on funding from their children, seek welfare (and the social stigma this carried), hope for charity from the hospitals or avoid care altogether” wrote Rosemary Stevens, a sociologist at the University of Pennsylvania, quoted in the Politifact discussion of 'Were the early 1960s a golden age for health care?'  Before Medicare, much of the care that physicians provided to seniors was on a charitable or uncompensated care basis.  After Medicare, demand for medical care grew, pumping hundreds of billions of dollars into care provide by physicians.  It should be no surprise to anyone, then, that physicians saw huge gains in payments and their incomes: between 1967 and 1993 physician payments from Medicare grew at an average annual rate of 13.7 percent.  And despite price controls and spending caps, like the recently repealed Medicare SGR formula, Medicare per capita payments to physicians have continued to increase to the present day, although payments and incomes for primary care physicians have lagged behind other specialists.  In addition, U.S.-trained physicians who entered practice after 1965 have benefited from Medicare paying for their post-graduate education.

Yet my sense is that many physicians today look at Medicare with a complicated set of emotions: appreciation for all of the good it has done for their patients, acknowledgement that physicians themselves have greatly benefited from the infusion of public dollars, yet concern that Medicare has begat greater government intervention in the patient-physician relationship, as evidenced by a never-ending cascade of rules,  mandates, and performance measures imposed on harried doctors and their patients.

 Looking forward, most physicians are probably aware that Medicare will become an even bigger part of their daily lives, with more than 10,000 baby-boomers becoming Medicare-eligible each day for the next 20 years, yet they likely view this development with uncertainty and some trepidation.  Can the country afford it?  Who will pay for it?  Will greater government spending lead to even greater government controls, regulations and paperwork?  Will payments be fair and adequate?  Will Medicare really begin to do something meaningful to reduce the disparities in payments between primary care and other physician specialties?  Will pay-for-performance really improve patient care, or just be another hassle with unintended adverse consequences for patients?

These are all good questions, with no clear answers.  But on the most important question-- have physicians and their patients benefited over the past half century from Medicare?--the answer has to be an unequivocal yes.  The challenge going forward is to continue to sustain, support and fund the Medicare in a fiscally-responsible way, for the next 50 years and longer, while empowering physicians to improve care to patients without tying their hands with more unnecessary and counterproductive mandates.

Today’s question: How would you characterize the past, present and future relationship between Medicare with physicians on the program’s 50th birthday?


Jay Larson MD said...

For about 30 years Medicare was good to the primary care physician paying for "reasonable charges" Once the RVU system came into play, it was the beginning of the end for primary care. The threat of SGR was present for over a decade and every time it was kicked down the road a subinflationary increase was granted. Now that the SGR is gone the new scheme of paying for value still results in subinflationary increases, putting primary care further in the hole. It is highly unlikely that there will be a distribution of wealth between the proceduralists and the generalists. MedPac suggested to pay for extending the 10% primary care bonus (which still is not enough to pay overhead) be paid for by reducing reimbursement by a few percent to non-PCPs. I am sure this will be rejected by the proceduralists just like it was first proposed when the ACA was first being drafted. Looking at Medicare in its current state, it is probably one of the worst insurances for primary care. Look at the low reimbursement, the regulations, quality reporting, the risk of penalties, the RAC audits, the documentation requirements, the prior authorizations required for part D drugs or the part C insurance companies. Looking into the future I don't see any hope for primary care in the Medicare system, just more regulations and substandard reimbursement for increasing complicated medical care.

PCP said...

Medicare = How the federal gov't usurped the professional autonomy of medicine.

Harrison said...

I am a fan of Medicare.
It helped patients.
I almost certainly made life better for our elderly.
It exists because what came before it was awful.

There was a time when the Marshfield Clinic in Wisconsin took the profits for the year, and divided them equally between the partners.
It didn't matter whether a doctor was an interventional radiologist (well, really they didn't exist at the time but you get the point), or a geriatrician.
Everybody worked and shared equally in what the clinic made.
There were probably rewards built in for hard work or performance at some level, I don't know for sure, it was before my time.
But, the differences weren't great.

There is no way that would happen now, and Medicare contributed to this unhealthy pay inequity.

It didn't have to happen that way.

Some of what Medicare is doing now is well intentioned.
It is using payment reform to bring doctors in line with guidelines.

But the result is going to be that patients on the margins are hurt, and doctors who treat marginalized patients will suffer.

Nothing new about that.


Doug McConnell said...

The 13% per year physician total payment increase is an aggregate number of all physician payments for those years NOT individual for individual practitioner. Of course aggregate expenditures rose - as did the population numbers treated AND the growth in healthcare technology. In 1967 there were no CAT scans, NO CABG surgery, NO joint replacements, minimal dialysis, NO MRI machines, NO CCU's or ICU's (just emerging), NO helicopter transportation, NO Trauma centers, NO transplantations except early kidney transplantation and the list goes on. So to select a baseline year and somehow create a yearly reimbursement rate of 13% increase per year says a lot more about the wonderful (but expensive) growth of therapies possible during that era. Medicare patients benefited from all those new fangled technology based procedures and yes total costs increased to no surprise.
Now as for individual physician payments. There are Federally published reimbursement schedules for surgical procedures. Using Medicare's determined reimbursement for example a 4 vessel CABG. During the last 12 years the reimbursement has been reduced by over 50% here in California. Corrected for 12 years of inflation that is about a true 72% reduction in Medicare reimbursement over a 12 year period. These payments are for a 90 global single payments covering all patient care. That data is easily available for many other fields as well such as orthopaedics and neurosurgery. Admittedly, this is a segment of the practitioners within the whole program but CV surgery and Orthopaedic practices are heavily impacted by Medicare Payment Schedules.

If you were to look at THOSE numbers, your conclusions as to Medicare's rosy support for physicians might be quite different.