As expected, the Senate has gutted Medicare Advantage, effectively killing the last hope of market-based Medicare reform. The “news” media, the AMA, and even some normally sensible medical bloggers are spinning this act of stupidity as a victory for beleaguered physicians over mean-spirited Republicans and insurance company robber barons.

But the physicians didn’t win a victory. All they got was a temporary stay of execution. The reimbursement cuts will be back with a vengeance, probably in 2010, and they will stick next time.  Instead, the docs were duped into euthanizing their only real hope of escaping the endless cycle of pay cuts and metastisizing Medicare regulations.

And it wasn’t the insurance companies who lost. The real losers were low-income, rural and minority seniors. Medicare Advantage is very popular with these patients because of its lower co-pays, more comprehensive benefits, and the increased primary care access the program provides in underserved areas. Per the Heritage Foundation:

According to a 2007 CMS report, 57 percent of Medicare beneficiaries have incomes between $10,000 and $30,000 annually, compared to 46 percent of beneficiaries in traditional Medicare. Also, 27 percent of Medicare Advantage enrollees are minorities, compared to 20 percent of enrollees in traditional Medicare.

The Senate’s craven and short-sighted vote condemns these patients to the tender mercies of traditional Medicare which, due to its unsustainable fiscal situation, will increasingly be forced to cut benefits, raise co-pays, and restrict access. This is what the Democrats, the AMA, and a few pusillanimous Republicans (a tautology, I know) have accomplished.

 Good work guys.

Comments 6

  1. Marc Brown wrote:

    So you would have cut the physician payments?

    Posted 10 Jul 2008 at 5:15 am
  2. Catron wrote:

    It was never about the physician cuts, Marc. That was just the hook they used to trick the docs into abetting this disgrace.

    The cuts are coming with the grim inevitability of Greek tragedy. Like your decrepit NHS, Medicare is financially unsustainable.

    So, the docs will (along with the patients) be screwed in the end (so to speak).

    Posted 10 Jul 2008 at 6:34 am
  3. PostalMed wrote:

    I just found your blog and am thus a little late for this particular party, but I have to toss my two cents in.

    I am a physician, and I was opposed to the veto override of the Medicare payment cut bill. I was also put out by organized medicines fawning and grandstanding for a measly 1.1% fix. But my opposition was not for the reasons you might imagine.

    Whether or not the Medicare Advantage plans got cut was not an issue for me; I have always assumed that the life of this program was limited, just like the preceding Medicare HMO program (which MA so closely resembles), and that it would be killed eventually, just like Medicare HMO, by forcing it to cover more and more services for less and less money until it became financially unfeasible for the insurance companies to continue to operate the plans, and the companies would then all “voluntarily” bail out of the program. It’s not a matter of if but rather just when this would happen; if Obama wins in November, this will start in early 2009, right after the insurance companies are cut out of the Medicare Part D program, which I expect will be the second or third bill to be passed by that new Congress.

    My opposition to the bill that was passed by veto override was two-fold. The first part was the carrot-stick “bonus-reward” provision to try to force physicians into implementing electronic prescribing. To begin with, the technology is not yet ready-for-primetime, and the legal restrictions (e-prescribing across state lines and e-prescribing controlled substances for starters) have not been lifted to make it more useful; these things needed to be corrected BEFORE any required use is mandated. Forcing doctors to use e-Rx without also forcing pharmacies to accept it makes little sense as well, especially in small towns and rural areas. Furthermore, the bonus does not provide enough funds to adequately pay for the implementation and then ongoing support of the e-Rx software — even before the bonus phases out, leaving physicians with the full brunt of paying for the continued costs of using these systems from that point onward and from which the majority of the financial benefit goes mainly to the PAYORS.

    My second major issue with the bill was the provision allowing the IRS to recoup back or unpaid taxes from the physician’s Medicare payments. Not that I am in this boat, but for those who are, it will wreak havoc on trying to keep the financial records straight, and will likely result in more illegal balance billing as some physicians will bill the “unpaid” charges on to patients. (Not to start a new argument, but there are a lot more physicians that balance bill Medicare patients than most people realize, and, as long as it remains illegal, someone should be enforcing that provision, yet no one does, as it recoups nothing for the government except some measly fines.)

    Organized medicine has been telling Congress for over 10 years to correct the seriously flawed Medicare payment update formula, but all we have managed to get are a series of stop-gap corrections that do not come anywhere close to the rate of medical inflation. I for one was ready to take to the streets, to take my 10.6% pay cut and join many of my fellow physicians in walking out on Medicare, thus creating such an access problem that Congress would be forced to finally address the issue. Guess that will now have to wait until the 20+% cut of 2010. It’s not going to be pretty.

    Ultimately, the only ones who are really going to feel any pain are our patients. It is so sad that we physicians have to use our patients as pawns to get any payor, not just Medicare, to take our complaints seriously. but in my experience so far, that’s been the only strategy that has any impact.

    Posted 06 Sep 2008 at 4:21 am
  4. Catron wrote:

    “I was also put out by organized medicine’s fawning and grandstanding for a measly 1.1% fix.”

    I’m with you, PostalMed. To me, that looked like a symptom of Stockholm Syndrome.

    And you are absolutely right about electronic prescribing and the IRS recoupment scheme.

    All of these bad ideas emanate from a single source: the notion that government can “manage” the health care market.

    Because every attempt to “manage” it creates 5 new problems, our D.C. masters must create 5 new boondoggles, which create 25 new problems, ad infinitum.

    Posted 06 Sep 2008 at 8:36 am
  5. Joseph C. wrote:

    “the technology is not yet ready-for-primetime”

    Part of the reason health care software is so horrible is because docs are clearly on the wrong side of the “digital divide”. I’ve watched many a little health care software start up with good ideas crash and burn from complete lack of interest from the technophobic health care industry. Heck, I even worked at such a company.

    Posted 06 Sep 2008 at 11:09 am
  6. TJones wrote:

    Here’s how I think Obama’s health care reform will work. Cuts for medicare payments to healthcare providers will cause (and have caused) public hospitals who treat the uninsured in emergency room to go bankrupt. The DP and GOP pols in the regime wont agree on anything beyond that because they support the health insurance industry, as the Clinton’s did and still do. In my work in insurance I’ve already seen how healthcare gets rationed out in the system we have. You already have two systems of healthcare, one for the poor and another for the very rich. Obama’s “reform” will simply codify this state of affairs. Rural people, the poor, the elderly, minorities, veterans (and their families) stand to get hurt bad by this “reform”.

    The difference between conservatives and liberals is that liberals say nice things before they do the same things the conservatives would have done. Just last October the Democratic Party was denouncing McCain for being prepared to gut Medicare, and Social Security. Now the denouncers are planning on doing just that. Settling for simply calling them hypocrites would be an insult to hard-working hypocrites everywhere.

    Posted 22 Jul 2009 at 1:30 pm

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