The Medicare “Doc Fix” Might Not Be Such a Bad Solution After All

This is Austin Frakt:

yuHowever, from another point of view, the formula — as flawed as it is — has helped keep Medicare spending lower than it might otherwise have been. Instead of cutting physician payments by the large amount the S.G.R. demands, Congress has increased payment rates, but typically by only tiny amounts — at an annual rate of just 0.7 percent.

But, although fees have only increased 8 percent since 2000, Medicare’s spending on physicians has increased 69 percent per patient. This is because the number and intensity of treatments has increased significantly. Could doctors have responded to lower real fees by cranking up volume?

Comments (16)

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  1. Anne says:

    Probably also has something to do with fear of lawsuits. I know a neurologist who says he will order CAT scans on 100% of patients who complain of headaches, even if there’s no indication that it’s needed, just to protect himself in case one of them turns up with a brain tumor in 5 years. Experience with the healthcare system tells me this is common across basics all types of medicine.

  2. Bart I. says:

    If number and intensity of procedures increased as a way to compensate for lower reimbursement rates, I don’t see how this is a good thing.

  3. Trevor L. says:

    “The gap now stands at about 24 percent. Good luck getting physicians to keep Medicare patients if the payments are suddenly cut 24 percent.”

    There is no way that Doctors could handle a cut like that

  4. Lucas says:

    While they could slowly decrease the cut over time, it may be far too late to do even that.

  5. Connor says:

    The SGR is broke because of congress, they are the ones to blame for this mess

    • Trent says:

      How many of them actually took anything more than basic economics though? They are too ill informed

      • Lucas says:

        Vastly, but that won’t change a thing. They will continue making policies that are popular with people in order to stay in office.

  6. Barry Carol says:

    A significant percentage of Medicare payments to ophthalmologists and oncologists are attributable to reimbursement for expensive drugs that these doctors must buy and then bill insurers for their cost plus a (6%) profit margin. This has less to do with the number and intensity of treatments then the increasing number of expensive drugs available to treat these diseases. Some of that treatment, especially at the end of life, may be futile and inappropriate but that’s a separate issue.

  7. Bob Hertz says:

    A series in the NY Times by Elizabeth Rosenthal gives more weight to what Barry says,

    She describes a man on Remicade who went into an NYU hospital for injections.

    The bill was $179,000 for six hours, and the idiot insurance company paid about $93,000.

    Per the author, the drug in question cost about $1,200.