The Deal That Would “Only Affect Providers”

August 01, 2011
4:06 pm

I wonder how long it will take before people who should know better stop implying, or even saying outright, that payment cuts to Medicare providers don’t affect beneficiaries.

This weekend, I was among those following the cable news shows to see if Congress would finally reach agreement on a debt ceiling package. It appears now that, even though it may be a “sugar-coated Satan sandwich” to some, a legislative approach has been crafted that will raise the debt ceiling and establish a process for achieving approximately $2.5 trillion in budget cuts over 10 years.

In this process, a congressional super-committee will be charged with identifying $1.5 trillion in deficit reductions by Thanksgiving. If they fail to do so, automatic cuts will occur and fall most heavily on the defense budget and Medicare.

As I was watching the news analysis, though, I saw a continued misunderstanding of what it means to cut Medicare provider payments. One commentator praised the deal for protecting the most vulnerable in society, pointing out that Social Security and Medicaid were exempt from cuts, and Medicare cuts “would only affect providers.’ We’ve seen the same type of analysis several times today in print reports.

This kind of verbage creates the impression that an acceptable way to reduce Medicare spending, in a way that doesn’t do harm to patients, is to ratchet down payments for physicians, hospitals, medical devices, pharmaceuticals and medical supplies.

What is seldom acknowledged is that, for every percentage point shaved off of Medicare provider payments, seniors lose a little more access to quality healthcare. We’ve already learned, thanks to a survey by the American Medical Association, that approximately one in every three primary care physicians is limiting the number of Medicare patients in their practice. That’s the consequence of payment levels that are significantly below private insurance levels. Given the rising number of baby boomers entering the Medicare program, the last policy change we need is one that will reduce the number of physicians available for this population.

That’s the consequence, though, of budget reductions that “only affect providers.”

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The Deal That Would “Only Affect Providers”

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