As we explained in a Concord Coalition press release today:
The Senate is expected to consider a bill this week that would permanently increase physician reimbursement rates relative to the current Medicare “sustainable growth rate” (SGR) formula and exempt this “doc fix” from pay-as-you-go budget rules (PAYGO). This exemption would increase federal deficits by roughly $250 billion over 10 years.
Concord said that changes in the payment formula should be included and paid for as part of comprehensive health care reform. The issue of how Medicare reimburses physicians is central to the broader effort to get Medicare and health spending in general onto a more sustainable path…
“…If policymakers believe that the current SGR formula is unrealistic, they should replace it with a more appropriate policy and pay for the change in keeping with their pledge to reform health care in a deficit-neutral way. If paying for this SGR change means there would be fewer offsets on the table to pay for expanded coverage, then policymakers would be forced to appropriately weigh their priorities and make the necessary tough choices–either scale back other costs in the health reform package or find more ways to pay for the larger bill,” said Concord Coalition Executive Director Robert L Bixby.
If it seems odd to you that this “doc fix” is not being considered as part of the “health care reform” bills in Congress, well, you’re right. It’s actually ironic and clever at the same time. The irony is that the doc fix represents one big way in which federal policymakers want to “bend the health cost curve” in the wrong (upward) direction. (See Figure 2 in this CBO issue brief that although a few years old still well explains the SGR situation today; what Congress wants to do is follow the curve shown as “Option 3″–without offsetting the cost relative to the current-law baseline.) The cleverness is that Congress wants to keep this “fix” separate from the rest of health care reform to make it easier to keep the combination of policies that do fall under the official “health care reform bill” deficit neutral, and they know that a deficit-financed “doc fix” in a stand-alone bill will be easier to pass than a paid-for “fix” in any other bill.
This does not bode well for our ability to bend the health cost curve in the right (downward) direction in the future, especially when so much of the longer-term “bending” seems to rely on the idea of a commission forcing Congress to actually make the as-yet-unspecified, put-off-to-the-future tough choices. As my boss, Bob Bixby, puts it:
“The current SGR payment formula was originally enacted as part of the 1997 balanced budget agreement to slow the growth of physician payments. Exempting a change in that formula from PAYGO would undermine the credibility of promises now being made to restrict provider payments in the future. Why should anyone believe that Congress will enforce future promises to limit provider payments when it cannot summon the political will to enforce the limits it has already enacted?” Bixby said.
I keep wondering if some day maybe 10 to 20 years from now we’ll be dealing with the “health care reform commission fix” and still searching in vain for the external mechanism or rule that would bring us effective fiscal discipline–when the only thing that would really work is a lot more personal courage from our politicians, and a lot more encouragement and praise and votes for courageous politicians from the public.
UPDATE/Addendum: Forgot to point out that Monday’s lead editorial in the Washington Post echoes Concord’s sentiment (or we echoed theirs). I especially like their emphasis on the many “fiscal time bombs that will need defusing soon… [most significantly,] the Bush tax cuts…[which involve] huge costs…that the administration would, for the most part, prefer to assume away.”