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Doctors Got Schooled On April Fools

Well, it’s official. Again. The big Medicare slash continues. Today is April Fools Day. It’s also the day that grandma’s insurance payments to physicians got cut over 20%.  Again. That’s in addition to the greater than 20% cut physicians have already experienced in the last decade of stealth inflationary cuts. Way back in December of […]

Well, it’s official. Again. The big Medicare slash continues. Today is April Fools Day. It’s also the day that grandma’s insurance payments to physicians got cut over 20%.  Again. That’s in addition to the greater than 20% cut physicians have already experienced in the last decade of stealth inflationary cuts.

Way back in December of 2007 I gave my first take on the whole sustainable growth rate formula and predicted this exact scenario would be playing out today. At that time I predicted that a burger flipper would make more money than a primary care doctor under the current financial rules of the Medicare National Bank.

Fast forward two years and here we are. Last month I gave my comments on the looming government hatchet job and subsequent reversal one day later and said it was time for physicians to take a stand and let granny get screwed. After the Congressional reversal on March 2nd, 2010, the reduction (delayed until March 31st), was supposed to be delayed until October 2010 in the jobs bill, but that never made it out of Congress. Congress has now recessed and the over 20% decrease in Medicare reimbursement stands. Again. And that’s no April Fools joke.

I say good. Let it stand for good. It’s not going to matter because the cuts coming down the line dwarf anything that SGR ever stood for. I hope it stands and I hope physicians take notice. The AMA and the ACP just got played like little girls. They put all their eggs into the SGR basket and lost. Too scared to stand up for what’s right, they caved in an orgy of liberal hallelujahs. In the end they got stooled on by lawyers much smarter than them. They got no SGR fix and they got the greatest physician payment cut in the history of medicine passed in the health care bill. Don’t believe me? Read on.

This health care reform bill passed with incredible political grandstanding and the across the board Medicare rate reduction went into effect all in a glorious 10 day period of self congratulatory back slapping and high fives. Congratulations people. You have accomplished nothing for physicians and certain death of the Medicare National Bank . It’s LOSE-LOSE. I hope you’re proud. There are no winners here except the government and their role as bread winner.

I am the antithesis of politics. Politics is about power, not about doing what’s right. The reality is, Medicare cannot sustain itself. Not under the current rules. And certainly not under the fairy tale economics of this health care law. With the bill now signed, the scam is now in full effect. The coffin has been nailed shut and physicians (and eventually Medicare patients) got the royal screw job of the 21st century. Instead of doing the right thing, we got the greatest political bribe of the new millennium.

But you know what. I say good. It has to happen. Medicare is like an alcoholic who hasn’t yet hit bottom. Until they do, they have no way of fixing themselves. Medicare has yet to hit bottom. This bill will guarantee it happens. The writing is on the wall. The great physician walk out has been carved in stone. And that is the only thing that will accelerate real reform..

You see, without physicians, having Medicare is like putting all your 401K into Zimbabwe dollars. You might as well be uninsured. Until physicians walk out, no meaningful reform will happen. The death march toward bankruptcy has just been signed in stone. Until that bottom is reached, nothing changes. Why am I convinced of a mass exodus of physicians out of Medicare?

Starting in 2013, an independent advisory board will make recommendations to keep Medicare spending at no greater than 1% over GDP, recommendations that go straight to the President and Congress for immediate consideration. What are the restrictions placed on this Medicare advisory board? They cannot recommend

  1. Rationing of care
  2. Increasing revenue or changing benefits
  3. Changing eligibility requirements
  4. Increasing cost sharing arrangements
  5. And hospitals are immune from recommendations in cost cuts until 2019

That doesn’t leave a lot of room to control spending. Of all the players, only physicians are expected to take the brunt of the cost control measures. The bill raises taxes to delay the bankrupting of the Medicare National Bank. It ain’t going to work. Not now. Not ever. Those who believe otherwise lack fundamental economic knowledge. If you tax something, anything, you get less of it.

Do you remember what the GDP was in quarter 4 of 2008? Almost -5%. What this law says is anytime we have a recession physician pay will be cut. All the smart economists know that future American GDP growth will be highly muted by rising debt and persistent unemployment. What that says is payment for health care growth will be muted as well. In the real world, people lose their jobs during a recession. For physicians, they’ll have to quit to survive. And cash will be king.

I say often that the only way to control spending is to stop spending. It looks like your Congress has decided that the only way to balance Medicare is to raise taxes and reduce the payment to physicians for care provided. With hospitals immune for a decade, there is only one group left to slash, and those are your doctors. What your Congress has just guaranteed is failure.

There is no incentive on the Medicare population to stay healthy, no benefit changes based on life expectancy, no increased cost sharing. The only way to reduce Medicare costs will be to reduce payment to doctors and and eventually hospitals. (who earned themselves immunity from this Biggest Loser challenge). Politics and economics do not mix. This bill is proof positive. Medicare is a giant unfunded entitlement that has become the political prize of a generation of proud Washington Sugar Daddys ready to provide their bacon through any means possible.

I am the voice of truth. I’m here to tell you Medicare cannot be saved under the current entitlement rules. The economics are a scam. The AMA and the ACP have been played like little girls in the greatest April Fools joke of all time. They got nothing accomplished except a guarantee of massive physician cuts for years to come. And they thought repealing of the SGR was the Holy Grail. How could they be so naive.

They did their best. I suppose I should congratulate them for a job well done. They have guaranteed a mass exodus of physicians from the Medicare National Bank. The economics say so. And that’s exactly what we need to get the politics out of the economics.

originally published at The Happy Hospitalist

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