OPINION:
A broken Medicare physician payment system, exacerbated by Biden administration cuts and ignored by our presidential candidates, could trigger a doomsday scenario in our already dire national doctor shortage. With the U.S. needing tens of thousands of new doctors to enter the workforce in the coming years, failure to strengthen the supply of physicians will undermine access to high-quality health care for tens of millions of disabled and older Americans.
Our leaders in Washington must pay attention and work together on market-based solutions if we want to prevent our country from following others that have embraced a fully nationalized health care system and are plagued by doctor shortages.
One might think the two leading presidential candidates would weigh in on this, but so far we have nothing to go on. The GOP platform language “vow(s) to strengthen Medicare for future generations,” whatever that means. Democrats haven’t really said anything about Medicare, but Vice President Kamala Harris seems OK with the Biden-Harris administration’s “accomplishments,” including its record at the Department of Health and Human Services, which includes cuts.
A new white paper released by the Pacific Research Institute gets to the heart of the problem: Artificially low Medicare payments to physicians are exacerbating physician shortages and can lead to reduced health care access for vulnerable patients. This doesn’t surprise anyone with a basic grasp of economics: Nationalizing health care “creates adverse incentives that worsen the quality of services” and leads to counterproductive price and income controls.
As the report’s author, Wayne Winegarden, says, you don’t have to look far to find examples of how socialized medicine and reduced rates doctors receive under such systems exacerbate physician shortages worldwide.
In Canada’s nationalized health care system, for example, nearly one-quarter (22%) of Canadians lack a family doctor or nurse practitioner they can consult when they need medical care. There is a serious physician shortage in Germany, which has a mostly socialized health care system. This will only get worse, as more than 41% of practicing doctors and 28% of specialists were over 60 years old as of 2023 — and an estimated 5,000 to 8,000 doctors’ practices are expected to close over the next three years, largely due to retirement.
While the growing shortage of doctors can be attributed to several factors — including difficult working conditions, long hours, increasing retirements and growing burnout — inadequate compensation is a driver of the crisis. That is especially true in countries with nationalized health care where governments are “imposing increasingly uneconomical price controls on physicians” to help control broader health care costs. In Britain, for example, junior doctors’ pay has been cut by more than one-quarter since 2008 despite workloads and waiting lists being at record highs. Predictably, such pay cuts mean fewer people want to become doctors, ultimately exacerbating the shortage.
Our country has not fully fallen into the socialized medicine trap, but Medicare plays an outsized role and is implementing policies that are eerily familiar to failed experiments abroad. Consider how the U.S. continues to devalue and underpay doctors for the essential services they provide.
Medicare habitually pays doctors for their services well below the true cost of care and has slashed reimbursement rates year after year after year. Medicare physician payments have declined 29% in real terms since 2001 while inflation has surged.
Whereas the free market is best equipped to determine the cost of performing medicine, Medicare’s price caps set an artificially low level of reimbursement. This gives physicians less incentive to accept Medicare beneficiaries and in the long run deters students from wanting to enter the medical profession. This is a major loss to society on both fronts.
Yet the bleeding continues.
Since President Biden took office, his administration has cut Medicare physician payments each year — and that will continue if a newly proposed 2.8% cut to physician payments in 2025 is established before he leaves office. These cuts and the lack of inflationary updates are only worsening America’s growing doctor shortage, forcing smaller, independent practices that cannot absorb these costs to either stop seeing Medicare patients, scale back staff and services, accept buyouts from larger hospitals and health systems, or close.
Fortunately, all hope may not be lost. As a first step toward long-term reform, a bipartisan group of physician legislators has introduced a bill called the Strengthening Medicare for Patients and Providers Act that would help put the Medicare physician payment system on a more sustainable path.
Once passed, the bill would help ensure Medicare physician payments reflect the true cost of providing care by tying reimbursements to the Medicare Economic Index, an important measure of inflation. While larger structural changes are needed to Medicare, the measure would go a long way toward creating a more level playing field for physicians, protecting and strengthening patient access and preventing our country from following nations with socialized health care systems that struggle with access issues and doctor shortages.
America’s physicians and patients deserve better than the system we’ve got. That’s why it’s important for Congress to pass this bipartisan bill as a step toward a stronger and more stable health care system.
• Christian Josi is a veteran public affairs and media relations professional as well as a globe-trotting singer. He writes often for a variety of publications.
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