You see, the Center for Medicaid and Medicare Services, or CMS, has to figure out every year how much it’s going to pay for things. The SGR is supposed to ensure that as fees for everything in healthcare go up, the rate of increase does not outpace the growth of GDP. In a complicated middle-man maneuver, CMS sends a report to the Medicare Payment Advisory Commission, which in turn advises Congress on how much medicare spent last year and how much it’s targeted to spend next year. There is a conversion factor that adjust payments based on how much over or under the target cost was the previous year. The SGR is that conversion factor, and believe me unless you have the beautiful mind of John Nash you don’t want to know how it’s calculated. The SGR was formulated in 1997 and, put simply, is a way to control costs.
So the SGR is a formula to control Medicare costs. OK. So what’s the problem? The problem is that as healthcare spending has outpaced GDP, every year since 2002 physician reimbursement has gone down. The SGR demands it, because every year cost is over the target. And every year Congress, under the heavy lobbying of the AMA, passes short-term overrides to prevent these cuts. And why is THIS a problem, since everything Congress does these days is emergency short-term fixes? Money. The gap between what the SGR says we should pay for medicare and what it actually costs is about $300 billion. The gap will get bigger and bigger. But what’s the alternative? Here’s what the Society for Hospital Medicine blog says:
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“To earn greater or equal revenue, we will need to achieve prespecified process of care and health outcome targets (VBP or value-based payment) on top of the old reimbursement chassis. Additionally, participating in alternate payment models (APM’s), e.g., patient-centered medical homes, will garner increased rewards. A caveat, APM’s work for ambulists, but not for hospitalists—and SHM has responded to CMS with proposals. The same goes for VBP mismatches.”
What? I have no idea what most of that means but, as a physician, the phrase “we will need to achieve pre- specified process of care and health outcome targets” strikes fear into my heart and puts ice into my veins. You see, what Congress is suggesting is that instead of tying medicare payments to GDP, they should link the payments to quality measures or performance-based incentive programs. That would be great if there were anything like actual meaningful quality measurement metrics. Quality measurements have to be things that are easily understood numerically. Number of people counseled on smoking. Number of flu vaccines. Number of people getting pre-operative antibiotics. Number of time-outs before surgery. Number of people tested for prostate cancer. These are NOT measure of quality. They are measures of compliance by physicians who must blindly check boxes in order to ensure that their “quality” matches what a panel of experts say is quality. Not only do quality measures not measure quality, they impose the increasingly onerous documentation requirements physicians face every day.
According to Forbes, the AMA thinks this is a great idea:
“(Thursday’s) strong, bipartisan votes by the Senate Finance and House Ways and Means committees, following similar action last October by the House Energy and Commerce Committee, shows that there is overwhelming, bipartisan support for ending the SGR in a fiscally responsible manner and closing the book on the annual cycle of draconian Medicare physician payment cuts and short-term patches,” said Dr. Ardis Hoven, president of the American Medical Association. “This long-overdue policy change provides the stability that physicians need to pursue delivery innovations that help improve patient care and reduce costs for American taxpayers.”
I suspect Dr. Hoven hasn’t practiced medicine in quite some time.
(Medicare / shutterstock)
