We’ve heard so much talk about how healthcare reform is going to make healthcare more affordable, but with all this time for the President and Congress to come up with great ideas, where are the great ideas? Let’s take a look at the current ideas put forth by the President and the House and Senate committees writing health care reform bills. See the full article for details:

Medicare Advantage Takes a Hit

Both the President and the Congressional committees plan to substantially cut the subsidies that are currently paid to insurers that offer Medicare Advantage plans. These plans currently enjoy a 14% bonus payment above what the government spends on an average Medicare beneficiary. In the House version, this provision is estimated to save about $200 Billion, and the President’s proposal would save about the same.

Hospitals Physicians and Other Providers Take it on the Chin

The House version would aim to save about $400 Billion by reducing Medicare payments to hospitals, physicians, and other health care providers. The President’s proposals include reducing both Medicare and Medicaid reimbursements to health care providers and “demanding” price reductions from drug manufacturers for medicines used by Medicare and Medicaid.

There are also House and Senate proposals to tie payments to providers to the “quality” of care that is provided, including a Senate proposal to implement a scheme for “value based purchasing”. WIthout details, these proposals are difficult to evaluate and perhaps this is part of the plan. However, it’s reasonable to assume that there is an underlying goal of saving about $400 Billion by reducing payments to providers, consistent with with the other financing proposals.

Let’s not forget that, under current law, Medicare physician reimbursements are already targeted for severe reductions over the next few years. The House bill actually budgets some money to offset these scheduled cuts, but since the House bill also includes $400 Billion in reductions to providers, we’ll have to see whether or not this is a case of giving with one hand and taking away with the other.

Medicaid – The 133% Solution

In an homage to Sherlock Holmes’ 7% solution (yes, he was an IV user of cocaine according to his friend and supplier, Dr. Watson), most Congressional proposals include expansion of coverage to 133% of the poverty level. It’s certainly one solution to the question of how the working poor can get coverage while working a low-end job that either is exempt from providing medical benefits or which provides them but which is still unaffordable to the working poor.

Estimating the Cost

The Congressional Budget Office is required to estimate the cost over the next decade for each program to be about a Trillion dollars.

Increasing the Demand WIthout Addressing the Supply

Oddly, I haven’t heard much discussion about funding for medical schools, internships, or student loans and grants for the next generation of physicians, nurses and other healthcare workers to take care of our aging population and all the people who are supposed to be getting improved access to healthcare. Neither have I heard tremendous support for measures that would trim the costs that burden healthcare providers.

Plugging the Hole in the Budget with Other People’s Money

Any proposed legislation needs to have some funding source, whether it is through cost savings, tax increases, or some combination of the two. The House is considering a surtax on personal incomes, but hasn’t yet figured out the details. One proposal is to make it a “millionaire” tax that affects joint incomes over $1 million and individual incomes over $500,000. Other proposals would affect incomes at lower starting points, or would raise taxes by limiting deductions. A Senate proposal includes $13 billion in fees assessed on manufacturers of drugs and medical devices, insurance companies, and clinical labs, and a tax on high-end health insurance plans.

These measures look like symbolic gestures designed to make the public think that someone else is going to foot the bill for this program. Let’s face it trillion dollars is a lot of money.

Now is the Time

As a physician, you should be concerned about proposed cost savings in the form of reduced payments to providers, on top of the already Draconian payment reductions already scheduled in the Medicare program. Other sectors of the healthcare industry, such as manufacturers and insurance companies, are effective at lobbying Congress. It’s time to speak up with your own story, both in the media (including your comments here) and directly to your Senators and Representatives.