Given the discouraging news, should seniors be concerned that they will be forced to finance the health care overhaul and that their medical care will suffer as a result?
Medicare Advantage, a program run by private insurers and reimbursed by Medicare, costs the government 14 percent more per enrollee than traditional Medicare, according to The Washington Post's Ezra Klein. But seniors like these plans because they provide more services than basic Part B coverage.
The health care reform bill proposed by Senator Max Baucus, a Democrat from Montana, aims to trim $123 billion in payments to insurance companies that provide these premium plans. The goal seems to be to cut the subsidies to insurance companies as opposed to seniors' benefits, which Democrats suggest could be avoided by trimming the huge profit margin earned by insurance companies. It's too early to tell whether this is worth worrying about because this fight is just beginning.
Fact from Fiction
But my advice is to pay little attention to scare tactics like inflammatory ads. Instead, if you have time, do some research on Politifact.com, a web site produced by the staff of the St. Petersburg Times, to help readers separate fact from fiction in politics.
If you're really interested in saving money on health care, you can encourage doctors and hospitals to cut down on excessive tests and procedures. In addition, we need to put measures into place to shield health professionals from frivolous lawsuits. But I'll get to that in a moment.
As far as Medicare Advantage goes, it provides coverage to about 10 million seniors, one-quarter of the enrollees in conventional Medicare. The proposed 15 percent rate hike (from $96.40 to $110.50) would affect 12 million people or 27 percent of Medicare recipients, The New York Times reports. The increase translates to about $15 dollars a month, and is roughly in line with overall health care cost increases.
So if just over a quarter of the Medicare population pays $110 a month for health insurance, does it mean seniors are bearing the brunt of health care reform? I don't think so, especially since this demographic uses by far the most services.
Medicare beneficiaries are actually getting a bargain, given what the rest of us are paying and getting -- or not getting -- for our money. Their monthly premium is a paltry sum compared to the amount paid by a 30- or 40-year-old with private health insurance. This age bracket has had to contribute much more to its employer for health insurance and/or has had to pay huge increases in deductible and copay in recent years. This year a single person will pay on average $4,804 -- more than double what they paid in 1999, according to the Kaiser Family Foundation.
Doctors Opting Out
Let's keep in mind that Medicare recipients have access to the same doctors as people with private insurance. But that could change if Medicare payments to doctors are reduced further. The Medicare Payment Advisory Commission reported in 2008 that 28 percent of Medicare beneficiaries seeking a primary care physician had trouble finding one, up from 24 percent the year before. What's the use of Medicare if there are not enough available providers participating to see the patients who need care?
In some towns, the number of internists participating in Medicare is already miniscule, and I am sure that more doctors will continue to opt out if this cut goes through, since most of us are already tried of dealing with the tremendous paperwork and bureaucracy. Cuts in reimbursement will be the final blow to those providers on the fence about taking care of this expanding demographic.
That said, I would probably continue to accept Medicare, even if they cut the reimbursements. But I am still building a new practice (I spent several years working elsewhere), whereas more well-established physicians are the ones who will most likely call it quits.
Doctors who do participate will probably do what they have done for other insurers who have cut reimbursements over the year:. Either they will see the patient more frequently, because doctors get paid per visit, or reduce the time spent with patients in order to increase their volume, thus deteriorating the quality of care.
Waste in the System
The amount of money involved in paying doctors fairly -- when all their other expenses are already rising -- is little compared to the money that could be saved by cutting waste from the system. In a New Yorker article last spring, Dr. Atul Gawande compared Medicare spending in McAllen, Texas, where per capita spending is $15,000 per patient, with those near the Mayo Clinic in Minnesota, where $7,000 is spent per patient. Gawande found that medical care was "over-utilized" in McAllen. In addition, some entrepreneurial doctors there had opened a hospital, and routinely refer patients to laboratories and radiology centers where they receive a share of profits.
The opposite takes place at the Mayo Clinic, as I pointed out in an earlier column. Large groups of multi-specialty doctors work together to provide coordinated care in a cost-effective manner without consideration for cost. One way they do this is to salary doctors so there is no financial incentive to order unnecessary tests or procedures.
The thing is, the people in McAllen getting the most expensive care weren't necessarily getting better care -- a fact confirmed by numerous studies showing that areas where more money is spent on health care don't experience higher life expectancy or other health advantages. In fact, in some cases patients can end up with worse care because complications can arise from a hospital stay or from undergoing the extra medical procedures -- especially in an older population.
Don't get me wrong, my expertise is in minimally invasive surgery, and I believe that some of the new technology has made us a world leader in health care. It's also contributed to spiraling health costs. I have an ultrasound machine in my office to use at my discretion. But pregnant women don't need an ultrasound every time they come in (the recommendation is for two to three during a pregnancy with additional studies performed only when necessary).
And there is no evidence whatsoever to suggest more ultrasounds improve outcome. Yet many physicians go beyond the usual two or three ultrasounds during a patient's prenatal care to protect themselves from missing something that might lead to a bad outcome and a medical malpractice lawsuit.
Given that we are also paid for the procedures, you can guess what tends to happen. The worst case scenario is that one little Texas town can spend twice the national average on Medicare without giving better care. And it appears to be due to doctors crafting a system where every referral, covered item, test and service is owned by the doctors, creating an extreme incentive to provide as much and as many services as possible.
The fact is there are millions of dollars to be saved in health care spending if doctors would simply stop ordering unnecessary, expensive tests on people of all ages, including at the end of life. Health reform will not be effective unless we figure out a way to eliminate incentives for doctors to profiteer, and instead compensate them for giving high-quality, cost-effective care. The system can also save billions of dollars if more doctors' offices adopt electronic medical records and reduce medical errors.
Legislation or guidelines protecting doctors from frivolous suits might go far in reducing unnecessary tests and procedures. But there are many who benefit from maintaining the status quo, including insurers, pharmaceutical manufacturers, trial lawyers, some doctors and for-profit testing facilities. All of these special interest groups have a say in creating roadblocks or promoting progress towards achieving real reform. Unless this changes, it's not seniors but Baby Boomers who should be the most concerned because Medicare will be bankrupt by the time we settle into old age.
Russell Turk, M.D. is an obstetrician and gynecologist in Fairfield County, Conn.