Wednesday, March 25, 2015

Five Reasons Congress Should Support the Medicare Reform Plan

By Bradford S. Patt, MD

Texas physicians, of course, are applauding the recent Washington announcement of a bipartisan plan to repeal Medicare’s Sustainable Growth Rate (SGR) formula.

Houston-area physicians are proud that our own Reps. Kevin Brady and Gene Green are major sponsors of this proposal.

Congress enacted the SGR 18 years ago. It hasn’t controlled Medicare costs. It’s time to repeal it. Physicians are tired of the never-ending uncertainty, the never-ending threats, the never-ending need to lobby Congress on the same, never-ending problem. Our patients are tired of the never-ending fear of losing their doctor. Eighteen years and 17 patches is enough.

The current threatened pay cut – 22.4 percent scheduled to take effect April 1 – likely won’t take effect. Congress could put yet another last-minute patch on it. Your physicians, though, hope that this time, with a good plan in place, Congress will finally repeal the SGR.

This would be great news for the 4 million Texans whose access to health care is endangered by the SGR. This would be great news for the 270,000 Texans who work in doctors’ offices.

Unfortunately, some Washington players are threatening to scuttle the deal brokered by U.S. House Speaker John Boehner and Minority Leader Nancy Pelosi because they don’t like the budget numbers behind it. Those are false arguments. Here are five solid reasons Congress should embrace this plan and vote for its passage:

1. The SGR is a failed attempt at government price control.

The SGR has never held down the cost of providing health care to military families and patients on Medicare. Government-imposed price controls don’t work. Price controls distort the free market; in this case they’ve forced physicians to find creative ways to bill Medicare for the services their patients need.

2. The “cost” of repealing the SGR is fake.

As Americans for Tax Reform reminds us, “Congress has delayed the onset of SGR 17 times over more than a decade. It is blindingly obvious … that Congress will continue to not impose SGR cuts. To pretend that it will, and then demand spending cuts to ‘pay for’ repealing it, is cognitive dissonance of the highest order.”

3. The SGR hides the true cost of Medicare.

Pretending that the SGR will someday take effect and someday hold down Medicare spending makes Medicare look much stronger than it actually is. “That allowed for the Obama Administration and allies on Capitol Hill to justify the creation of Obamacare (paid for in large part by Medicare cuts, incidentally) because of this rosy long-term cost scenario,” said Americans for Tax Reform.

4. The SGR repeal bill makes significant changes in Medicare financing.

The package does more than eliminate the SGR; it profoundly reforms how Medicare pays physicians for health care services. The Wall Street Journal describes it as a way to “reward doctors for providing more valuable care, rather than cutting the same fee-for-service check regardless of performance.” That will keep taxpayers healthier in more ways than one.

The plan pays for some of the cost of SGR repeal with changes in Medicare premiums and Medigap coverage for the wealthiest retirees. It would not affect those Medicare recipients who are not well-off.

“Because these policies are phased in, they don’t affect Medicare much in the first 10 years,” said Douglas Holtz-Eakin, president of the American Action Forum and budget director under President George W. Bush. “But the savings will continue to rise, grow faster than physician reimbursements, and on balance lower projected Medicare spending … by $230 billion over the second 10 years, 2026-2035.”

5. The SGR stands in the way of real health care reforms.

The constant negotiations over the “doc fix” bills distract Congress from significant structural reforms conservatives want.

“If you’re a conservative interested in repealing Obamacare, reforming Medicare, or block granting Medicaid to the states, removing the SGR kabuki theater from the congressional agenda is absolutely essential,” says Americans for Tax Reform.

As the Journal editorialized, “Congress is close to repealing a two-decade budget cheat and reforming the entitlement state for the first time in the Obama Presidency.”

Let’s not let fake government accounting get in the way.

Dr. Patt, an otolaryngologist in Houston, is the current president of the Harris County Medical Society.

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