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September 22, 2014

Big changes needed for Medicare, expert says

Big changes needed for Medicare, expert says
by Shelley DuBois | The Tennessean | Sep 22, 2014
Medicare must change, and that will be painful.

That was the condensed version of the message from Mark Miller, executive director of Congress’ Medicare Payment Advisory Commission, when he spoke to members of the Nashville Health Care Council on Friday.

Medicare is under a tremendous amount of pressure.

The U.S. population is aging, which means more people will need the government-sponsored insurance program in the coming years. Medicare funding comes from the federal budget, which is already stressed. The country’s debt will be more than 100 percent of its gross domestic product by 2039, according to the Congressional Budget Office’s 2014 Long-Term Outlook.

So Miller and his team of 35 people have the unenviable job of wrestling with these problems and trying to advise policymakers on how to solve them. Miller’s talk was loaded with information about the difficulty of managing Medicare, but a couple of points shone through.

First, the commission, known as MedPAC, strongly believes Congress must fix the Sustainable Growth Rate formula. The SGR is supposed to tell the government how to determine reimbursement rates for Medicare – but it doesn’t work. “The SGR kind of brings the Congress to its knees on an annual basis,” Miller said. For 17 years now, Congress has had to pass a “doc-fix” bill to avoid drastic cuts in payments to physicians.

Miller wants to effect real change.

He said MedPAC is considering ways to even out pay for different types of doctors. “The current reimbursement is not going to drive medical care into primary care-type specialties,” he said.

That’s a problem. One of the main tenets of health care reform is that primary care doctors become the main point of contact for patients. The idea is that one central caretaker will manage a patient’s records. Also, hopefully, people will reach out to primary care physicians before allowing a medical problem to progress to a costly emergency.

But primary care doctors generally make less money than specialists do. MedPAC wants to figure out how to change that and to create incentives to attract more young, smart people to pursue careers in primary care. Because the Medicare budget is finite, paying primary care doctors more probably would mean paying some specialists less for certain services. That change would cause some pain.

Miller also indicated his team is looking at ways to deal with the fact that the same procedure costs much more at a hospital than it does at an off-site location. There’s a reason for that – hospital care costs more because those facilities must be ready for any potential problem, which is expensive. But MedPAC may advise Congress to shrink that cost differential as well.

However, advising Congress to do something is very different than getting it done. Miller is the first to admit that policies look different going in that they do coming out of Congress, if they survive at all.

But the commission is wrestling with big questions and working with solutions that could trigger drastic changes. Those changes would ripple through the health care industry, and because of Nashville’s economic makeup, they would certainly have a big impact on business in Music City.

Reach Shelley DuBois at 615-259-8241 and on Twitter @shelleydubois.

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