Lowering Medicare, but not doctor pay

The cover of a booklet provided at an informational meeting on the Medicare drug prescription program in Sun City, Ariz.

TEXT OF STORY

Bob Moon: Old habits die hard in Washington. Every few years, or sometimes less, the government tries to bring down health care costs by reducing Medicare payments to doctors. Then, usually at the last minute, Congress votes to hold the cuts off until another time. That happened again today. The Senate passed a bill that temporarily spares doctors from a 21 percent cut in Medicare payments. The House will take up the bill next week. Which raises the question, once again: How do you lower Medicare costs without paying doctors less?

Marketplace's Nancy Marshall Genzer reports.


Nancy Marshall Genzer: The formula Medicare uses to pay doctors sets annual limits on doctor fees with automatic cuts. But Congress can override those cuts. And it has, for almost a decade -- usually right before the cuts are to take effect. It was so close this time, the American Medical Association launched a multi-million dollar ad campaign to prod Congress.

American Medical Association ad: Tell your senators to get back to work and fix Medicare, now.

This game of chicken has become too much for some doctors. They've stopped taking Medicare patients. Or worse.

Dave Davis: We won't quit taking Medicare patients. We'll just close up.

Dave Davis is an ophthalmologist in Albany, Ga. The doctors in his practice are considering retirement. He's moving to Arkansas, where overhead is lower.

Dr. Cecil Wilson is head of the American Medical Association.

Cecil Wilson: Congress basically is playing Russian roulette with the care and the health of America's seniors. Physicians are irritated and frustrated.

And health care costs keep going up. The health care reform law attempts to tackle that problem by changing how doctors are paid.

Len Nichols is a health care economist at George Mason University.

Len Nichols: The key to making our Medicare program solvent is to change the way we pay, to structure incentives in such a way that it is in providers' interest to deliver value, not volume.

Right now, the more services doctors provide, the more they get paid. Nichols says, the health care reform law tries to change that by giving doctors part of the savings if they reduce unnecessary tests and procedures.

In Washington, I'm Nancy Marshall Genzer for Marketplace.

About the author

Nancy Marshall-Genzer is a senior reporter for Marketplace based in Washington, D.C. covering daily news.

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