On March 26, 2015, just a few days after the five-year anniversary of the passage of the Affordable Care Act, a GOP-led House of Representatives did the unthinkable: They strengthened Obamacare. They passed the Doc Fix—eliminating the Sustainable Growth Rate (SGR) and extending the Children’s Health Insurance Program (CHIP).
The SGR is a complex cost-controlling formula devised during the Clinton administration as part of the 1997 Balanced Budget Act. This was an attempt to control escalating Medicare spending by tying physician payments to the growth of the GDP. Unfortunately, health care cost inflation outpaced the general economy, resulting in reductions in reimbursement to doctors if the formula was applied as written. Such reductions have not taken place and Congress has acted 17 times to postpone the cuts required by the SGR formula, realizing that if payments were cut, that doctors would begin to pull out of the program.
The ACA was intended to address the “Doc Fix” as it has become popularly known, but doing this in 2010 would have forced President Obama to break his pledge: “I will not sign a bill that costs more than $900 billion in the first decade or adds one dime to the deficit.” The “Doc Fix” would have added an estimated $300 billion, so it was pulled out, with the promise to the American Medical Association, who supported the ACA, that it would be addressed. This has eluded legislators who have had difficulty finding the offsets required in the budget process. If not addressed now, a 21 percent cut in Medicare payments to doctors is slated to go into effect retroactively to April 1.
Many issues divide physicians, but the SGR repeal unites them. The majority of doctors would welcome yearly certainty from Medicare, instead of an annual looming fiscal disaster. Few businesses can plan or survive with this uncertainty, which is one reason why many physicians have left private practice to become employed by hospitals or large health care corporations. Only 35 percent of American doctors remain in private practice.
This year, once again, Congress has addressed the “Doc Fix” with bipartisan support. Although the GOP has championed market based, patient centered reform since 2010, you wouldn’t know that by what is contained in HR 2, the Medicare Access and CHIP Reauthorization Act. As John Graham explains in the NCPA Health Policy Blog, “The real, unstated explanation for the urgency with which healthcare lobbyists are demanding passage of the Medicare Access and CHIP Reauthorization Act is not to improve the quality or value of physicians’ services to seniors, or even to “fix” doctors’ pay, but to get huge bipartisan majorities in Congress to swallow the idea that they should expand the Medicare entitlement without cutting spending elsewhere, through offsets or sequestration.”
This would explain why fiscal hawks oppose this bill. It is also understandable why those who oppose expanding entitlements would have issue with extending the CHIP program for an additional two years. What is confounding is why no one is concerned with the replacement of traditional fee-for-service medicine with a Rube Goldberg-esque physician payment formula.
In the 263-page bill, only 11 pages cover the SGR repeal. The remainder of the bill establishes a complex payment system for physicians—the Merit-Based Incentive Plan. Each physician will be scored based on metrics that will be determined by bureaucrats and “experts,” such as how drugs are prescribed and tests are ordered, and compliance with reporting patient data and with EMR (electronic medical record) Meaningful Use.
This is bad for patients for several reasons.
First, it puts added costs on doctors, many of whom are barely able to stay profitable. These new bureaucratic hoops that doctors must jump through to get paid will force thousands of doctors to close their doors and join hospitals, shifting care to the costliest place in the healthcare delivery system. Eventually, private practice will cease to exist, giving patients fewer options.
Second, there are metrics that doctors will be measured by that will result in lower quality care to patients than they currently receive. If a doctor gets a bad mark and hence lower pay because he orders a test that the government is discouraging, the doctor will avoid doing the test. This is already happening with PSA testing for prostate cancer.
Finally, this law embeds these metrics into Obamacare. It strengthens a plan which many believe has made the healthcare system worse than before. Those individuals who promise to repeal Obamacare and then vote for this SGR bill are no better than President Obama when he promises that you can keep your doctor.
Rather than embracing true market-based solutions, such as the Premium Support models endorsed by Clinton’s bipartisan Commission on the Future of Medicare and the Bowles/Simpson Commission, this bill embraces big government top down planning and adds an estimated $141 billion to the deficit.
Organized medicine, including the AMA and specialty societies, have been so anxious to sell this to American doctors that they urged all members to support the bill before it was printed and then Speaker Boehner brought it to the floor for a vote within 48 hours of printing. Who read the bill? For those members of Congress who read it, who among them understood the implications for the federal budget, for physicians or for patients?
Wisely, the Senate recessed for the holidays. Hopefully, members of the Senate, with time to reflect, will craft a more fiscally responsible and consumer oriented solution when they come back from recess, which not only ends the SGR, but does so responsibly.