OPINION:
Medicare is a mess. Our federal politicians need to take a hard look at the big three entitlement programs, Medicare, Medicaid and Social Security, to find reforms to those programs so our nation does not go broke.
When Congress fights over discretionary spending, they don’t talk about how health care and Social Security consume almost half of the whole federal budget — that is, almost $3 trillion in outlays per year.
Spending on entitlements with no effort to reform needs to end. Our national debt, which is approaching $33 trillion, is becoming a national security threat.
Politicians who are whistling by the graveyard are not doing Americans any favors when they trash politicians who want to reform the big three entitlement programs.
The current system punishes rural and other underserved regions, which are disproportionately burdened by the red tape being created in order to get paid for the care services they provide. Unless Congress acts, I worry that more doctors will be forced to shut their doors, sell their practices, or stop taking Medicare patients altogether.
Over the last two decades, the rate that Medicare reimburses physicians has dropped precipitously — by 26% when adjusted for inflation and practice costs. At the same time, the cost of running a physician practice has increased by 47%, while economywide inflation has risen by 73% in that time frame.
Yet a statutory freeze on Medicare physician payments means that physicians won’t receive any inflationary payment updates until at least 2026. After that point, updates will resume at a scant 0.25%, still far below the inflation rate or the cost of providing care.
On top of this payment delta, physicians are staring down yet another round of cuts. While the government’s proposed Medicare Physician Fee Schedule alluded to the fact that doctors should have gotten a 4.8% increase as a result of inflationary realities, the actual proposed rule reflects a 3.36% decrease.
Cuts are not reforms. The bottom line is that too much federal money is flooding the system, causing distortions. But again, that is not the fault of doctors and patients. As usual, with a system like the one we have, the large institutional health care providers in large metropolitan areas make the big money while the smaller, rural independent practices get shortchanged.
In other words, big-city doctors and their patients get treated better than the rural independent doctors and their patients. It’s independent practices that pay the price for this failure, particularly the small-town physician practices that already struggle to keep their doors open in the face of rising medical costs, a growing workforce shortage, and soaring inflation.
As any business owner will tell you, you can’t keep the lights on if costs exceed the money coming in. Medicare’s failure to provide adequate reimbursement will continue to push practices out of business, leading to higher rates of health care consolidation — which ultimately leads to higher costs as competition is eliminated from the market.
On top of insufficient payment, regulatory burdens imposed by the Medicare physician payment system are also undermining the stability of physician practices and posing an added threat to patient access and affordability. Complying with the overly bureaucratic, unnecessarily complex web of regulatory requirements increases practice costs and wastes hundreds of hours per physician annually.
Reforming the Medicare physician payment system to ensure greater payment accuracy should be a primary goal for lawmakers and the Centers for Medicaid & Medicare Services.
Doctors need to be paid based on the true cost of delivering care, not some opaque formula whipped up by bureaucrats.
Thankfully, recent legislation introduced by a bipartisan group of physician lawmakers in the House, the Strengthening Medicare for Patients and Providers Act, would help provide relief for physicians. If passed, the bill would put the Medicare physician payment system on a more sustainable path by providing annual inflationary updates for Medicare physician services based on the Medicare economic index, similar to the updates that other care providers already receive.
This legislation is just a Band-Aid for reforming the broken Medicare physician payment system. Addressing payment accuracy that will help protect the financial stability of physician practices is urgently needed.
Congress should pass this legislation to reform and improve the Medicare physician payment system for the long-term viability of physician practices nationwide.
It might make sense to scrap the whole Medicare system and create a new one, but that is not an option in the short term. Our nation can’t continue to pay out $3 trillion a year for government-funded health care and Social Security benefits without consequences.
Our children and grandchildren are going to pay a high price for the political malpractice of profligate federal spending on entitlements.
• Brian Darling is former counsel to Sen. Rand Paul, Kentucky Republican.
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