Saturday, July 13, 2024

Op-Ed: Congress must fix Medicare physician payment system

by BIZ Magazine

By Daniel Erspamer | The Pelican Institute for Public Policy

My mother called me last week for what I thought would be a friendly catch-up. It turned into an extended rant about the frustrations she has with her new doctor and how hard it is to get proper care.

It seems my parents’ previous primary care physician – with whom they had a longstanding relationship – left and was very blunt about why: Medicare reimbursements had forced her practice to consolidate with a major hospital system. “You’ll never get the level of care you’re used to under this system,” she said.

For many, building a long relationship with a physician you trust can make a huge difference in care outcomes, particularly for those who live with complex and chronic health conditions. And even for folks, like my parents, who have been blessed with relatively good health, the system doesn’t serve patients well. It took more than three months to get a simple chest X-ray scheduled for my father late last year. He eventually gave up.

Too many families here in Louisiana and across the country are dealing with the worsening doctor shortage.

Louisiana ranks in the bottom half of states for primary care and physician availability, with 60 of 64 of parishes listed as an official Health Professional Shortage Area. This dire situation threatens the physician-patient relationships that bring comfort and continuity to so many Louisianans.

Furthermore, it risks patients losing access to care close to home, which could cause their conditions to worsen and require more intensive (and expensive) services in the emergency department.

It’s a complex issue, but one that hits home for more people with every passing month. As we’ve long argued, government’s intervention into the medical marketplace has caused great harm.

Reversing course, however, is a monumental task, so what can be done to serve patients better in the near term, especially for the Medicare recipients who’ve paid into the system their whole working lives?

Right now, policymakers in Washington have an opportunity to ensure that medical practices – particularly those in rural areas – can keep their doors open to patients.

One common-sense reform to Medicare currently under consideration in Congress would tie reimbursements to inflation. Not surprisingly, right now the costs of providing care far exceeds the reimbursement doctors receive. The consistent result of this mirrors my parents’ maddening experience.

Legislation like the Strengthening Medicare for Patients and Providers Act (H.R. 2474) would ensure physicians are being compensated fairly for the critical services and care they provide. That should include annual payment updates that more accurately reflect rising inflation, just like the kind every other Medicare provider type receives.

If levelheaded lawmakers don’t make this modest fix to Medicare’s broken payment system, then folks like Bernie Sanders will gain the upper hand.

Here’s the problem this thoughtful legislation seeks to solve: For years, physicians have received dwindling payments through the flawed Medicare Physician Fee Schedule.

According to the American Medical Association, when adjusted for inflation, payments through the MPFS have actually declined by 29% from 2001 to 2024. That’s because, unlike hospitals or nursing homes, community doctors do not receive any sort of annual payment updates to account for rising inflation.

Here in Louisiana and across the country, physicians are reeling from years of Medicare cuts, and 2024 is no exception. This, coupled with increasing medical costs and high inflation, are worsening an already dire financial situation for many physician practices, particularly smaller, independent ones.

This can force physicians to scale back services or staffing, stop taking new Medicare patients, or, like my parents’ physicians, force private practices to accept buyouts from larger hospitals and health systems.

Without action, these trends will fuel growing consolidation, leading to spiraling health care costs that undermine the stability of America’s health care system.

If policymakers don’t reform the broken system now, these consequences are likely to give supporters of socialized medicine the ammunition they need to push risky schemes like “Medicare for All.”

Medicare may not be an ideal program, but ensuring its long-term stability – and considering other long-term reforms – is a dramatically better alternative than full-blown socialized health care, which would ration care, increase costs, limit patient choice and restrict innovation.

To avoid this worst-case scenario, conservative leaders in Washington must address the fundamental flaws in the MPFS.

Seniors like my parents are angry, and they paint a clear picture of why reform is so desperately needed. She’d be the first to tell you that the constant drumbeat for “Medicare for All” and other socialized health care schemes are worst case scenario. Let’s do the simple things well and make common-sense reforms to help our seniors and those with disabilities before it’s too late.

Daniel J. Erspamer is the CEO of the Pelican Institute for Public Policy, which advocates for free market principles.

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