Physicians feeling the squeeze of Medicare

Ed Gately, Tribune

Dr. Robert Bloomberg, a primary care physician in Tempe, believes it is “ethically unacceptable� for doctors to turn away Medicare patients because of inadequate reimbursement. However, that conviction means he and others who continue seeing Medicare patients have quite a struggle ahead of them.

“There are two large entities — decreasing Medicare reimbursement and increasing overhead — that continue to squeeze us and make it very difficult for us to do your job,� Bloomberg said. “But we’ll continue to do whatever we can to make the system work.�

According to the American Medical Association, Medicare will cut physicians payments nearly 40 percent over eight years starting in 2008, while practice costs will increase nearly 20 percent. A 10 percent decrease is scheduled for 2008 unless Congress intervenes.

About 60 percent of the patients in Bloomberg’s practice are on Medicare and “every day there are issues of inadequate reimbursement,� he said.

“If you look at the reimbursement we’re receiving as a function of cost of living over the past 10 to 15 years, we’ve actually been negative,� he said. “I’m specifically talking from the point of view of a primary care physician and an internist.�

A slight bump in Medicare reimbursement was expected this year for cognitive services — the basic evaluation of patients — but the scheduled decrease for 2008 would eradicate that temporary relief, Bloomberg said.

“It’s really draconian cuts and if you think of physicians’ offices as small businesses, can you imagine a small business getting those kinds of cuts?,� said Dr. Cecil Wilson, chairman of the board of trustees of the American Medical Association. “That’s just not sustainable.�

Last month, the Medicare Payment Advisory Commission, or MedPAC, voted to recommend that Congress increase Medicare reimbursements to physicians by an estimated 1.7 percent. An automatic 10 percent decrease will take effect next year if Congress doesn’t stop it.

The commission is an independent federal body established by the Balanced Budget Act of 1997 to advise Congress on issues affecting the Medicare program.

Sen. Jon Kyl, R-Ariz., has played a key role in the effort to avoid cuts in Medicare physician reimbursement, and plans to push Congress to stop the cut scheduled for 2008.

“Medicare currently relies on an antiquated payment formula that doesn’t take into account the rising costs of treating patients,� he said. “Part of ensuring that seniors receive quality health services through Medicare involves having to retain quality physicians in the program. And to retain quality doctors, the federal government has to adequately reimburse Medicare physicians for providing services.�

In March, MedPAC will offer recommendations to Congress for a long-term strategy to overhaul the Medicare reimbursement system.

“As I did last year,� Kyl said, “I will seek this year to avert the scheduled reduction of payments to physicians who provide Medicare services, but most importantly, I will also work to develop a long-term solution to reform the formula that will take into account all factors involved with providing quality health care services.� Just freezing Medicare reimbursement is a cut because overhead costs continue climbing, Wilson said.

“We’ve got to change the way Medicare payments are calculated to account for the fact that next year it will cost more to buy the supplies, the drapes, the equipment and the antiseptics,� he said.

“It will cost more to turn on the lights, pay the electricity and the water, and it will cost more to pay the salaries because in order to retain your employees you have to give them salary increases to reflect the increased cost of living expenses.�

Dr. Polly Turner, who has a well-established practice in Tempe, doesn’t think Congress will stop the 10 percent cut scheduled for 2008.

“Many years ago, Congress passed a rule that Medicare costs were going to be held at a certain dollar amount, and somehow or another, they would juggle what is paid out but it would not go over that amount,� she said.

“Well, they have been going over that amount, and now they have to stop it. There’s no more money coming in. They have to either ration the care or they have to increase the money available. The only way to increase the money available is taxes, and nobody wants that.�

While physician reimbursement is inadequate, there is waste in terms of where Medicare dollars are going, and that needs to be addressed, Turner said.

“Right now, Medicare patients can get lift chairs and electronic scooters, and all matter of health aids,� she said. “That’s nice, but is that where we need to be spending limited health care dollars, a lot for the few? I’ve had more than one family move here from elsewhere, where Medicare had purchased electric beds and electric scooters, whatever else, and they’ve sold them at garage sales, then come out here and want Medicare to buy it again. I have an ethical problem with that.�

One key to keeping Medicare costs down could be more seniors staying healthier and maintaining healthy lifestyles, Turner said.

“By keeping people healthier — if we can just get the weight off America — then we’ll have a better chance of being able to live within our budget,� she said.

Turner, Bloomberg and Wilson all said there’s good reason for seniors to be worried about physician access if Medicare reimbursement isn’t improved.

“It’s very rare that you hear a physician in the doctors’ dining room saying ‘my son’s going to be a doctor,’� Turner said. “What you hear is ‘I tried to talk him out of it.’�

The federal government is pushing for physicians to implement electronic medical records, thus adding to their overhead expense, she said.

“Suppose your overhead was 60 percent and you’re going to get a cut of 10 percent,� Turner said.

“That entire 10 percent comes out of the 40 percent you were going to take home, so now you’re only going to have 30 percent of the takehome pay, plus you’re going to have increased expenses with that electronic medical record. So now your expenses go up to 70 percent, but the feds cut you to 90 percent. That gives you the 20 percent for take-home pay.�

In 2012, the oldest of the baby boom generation will begin enrolling in Medicare, with enrollment swelling from 43 million to 49 million by 2015.

Bloomberg said he already encounters a growing number of physicians who won’t see Medicare patients.

“That’s what the declines in reimbursement accomplish,â€? he said. “There will be fewer physicians willing, just like you would, to work for nothing. There are guys, doctors, who have to be businessmen and they decide … that it’s almost better for us to just close the shop and walk away. So those patients end up in emergency rooms.â€?
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