It’s sad—really, really sad—that U.S. doctors have been reduced to groveling.
Each year they must return to the federal government, hand outstretched, hoping, begging for a little increase in the Medicare reimbursement rates.
“Won’t Congress please—PLEASE—bump up what Medicare pays for physicians’ services so we docs can make a living?” they ask.
And the government’s usual response amounts to: “Tough tourniquet. You work for us, and we will pay you what and when we choose.”
In 1992, Congress passed the Resource-Based Relative Value System (RBRVS). Or, as those of us who aren’t trying to muddy the policy language call it: price controls. Basically, Medicare determines what it will pay doctors for their services to Medicare recipients.
Far from giving the docs an increase every year—even just to cover inflation, etc.—Medicare frequently wants to cut the reimbursement rates. The American Medical Association has successfully fended off those cuts for the past few years, settling instead for a freeze on rates.
But the AMA has been working for months, so far unsuccessfully, to eliminate a 5 percent payment cut scheduled to go into effect in 2007. House Ways and Means Committee Chairman Bill Thomas (R-CA) reportedly offered to give the docs a slight increase of about 2 percent or a little more to those who start reporting quality information.
The AMA reportedly said no deal, in part because only a small percentage of doctors are able to do that.
The reimbursement rate is immensely important to physicians, not only because many of them do a lot of Medicare business, but because the Medicare reimbursement rate becomes the de facto benchmark price for private sector insurers.
Of course, the fact that Medicare has effectively placed a freeze on reimbursement rates means the doctors try to offset those costs elsewhere, by cost shifting to the private sector.
Naturally, the private sector tries to fight those efforts, but to the extent that it occurs, it allows people who want a government-run health care system to say: See, we could save a lot of money by putting everyone in a Medicare-type program.
It’s one of those perverse results of price controls. And the other? American's well-trained and highly skilled physicians groveling for just a few more pennies.