The Doctor Is In: Are seniors funding health care reform?
Filed under: Retirement, Healthcare
Senior citizens are worried. The insurance lobby recently began running ads claiming that seniors enrolled in private Medicare plans could lose some benefits. Last week brought news that basic Medicare premiums could rise 15 percent next year for some beneficiaries. Finally, the Senate voted, also last week, to allow Medicare payments to doctors to be reduced next year, which in turn could prompt some doctors to stop accepting Medicare, the U.S. insurance program for people 65 and older.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).
Ultrasound Overload
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.
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).
Ultrasound Overload
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.
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Reader Comments (Page 1 of 1)
10-29-2009 @ 3:40PM
Chuck said...
Hey seniors worried for sure, and guess what we will be gone before the real effects hit. Somebody better get hold of these people in Washington, or there won't be a country to worry about. I really am beginning to believe that is exactly what the choosen one was put there to do, and that was to destroy this country, and man is he and his firends in Congress doing a bang up job of it.
Reply
10-30-2009 @ 6:58AM
harry said...
didnt obama PROMISE no-one would have to change their policy or coverage unless they wanted to? what he is doing to advantage plans is a crime.. what else could you expect for a socialist and all his marxist friends and associates.. senors-----we're screwed.. wake up america..
10-29-2009 @ 3:56PM
Robert Billingsley said...
The writer says: "The proposed 15 percent rate hike (from $96.40 to $110.50) would affect 12 million people or 27 percent of Medicare recipients" which implies that only Medicare Advantage participants pay this monthly premium. This is UNTRUE! All Medicare beneficiaries who have part B (Doctor's services) of Medicare pay this premium! (except that higher income folks pay HIGHER premiums).
Reply
10-29-2009 @ 4:20PM
Don said...
Where has this guy been? Medicare has the same Drs as private insurance? Try finding a Dr that will take new medicare patients and you don't think it is gonna get worse? Lets get the Congress to try to get this same Drs on medicare where they should be. Talk about losing touch with reality.
Reply
10-29-2009 @ 4:39PM
fred said...
My take on this healthcare reform program is simply that it won't pass. We will continue down the same road that we are on today, which is spending about 14% of GDP for healthcare. The number will rise to 18 or 19% of GDP before a final bill will be passed (2012-2013). I do not like any part of this package but we do need some sort of program. What I see happening is like many problems in this country by the time the legislation is finally passed the entire healthcare system in this country will be in utter shambles.
Reply
10-29-2009 @ 4:59PM
vinny said...
THIS HEALTH REFORM IS GOING TO KILL THE MEDICARE MEMBERS, BY THEM ELIMENTING BENEFITS.
THESE SO CALLED PEOPLE IN WASHINGTON WITH THE PRESIDENT, ARE ALL SICK IN THEIR HEADS.
WE THE SENIORS OF TODAY MADE IT WHAT IT IS TODAY & TO TAKE AWAY SOME BENEFITS IS A CRYING SHAME.
TAKE AWAY BENEFITS FROM MEDICARE & GIVE WHAT THEY TAKE AWAY TO GIVE THE ILLIGALS, HEALTH COVERAGE IT THIS THE AMERICAN WAY.
/////////////////////////////// WHAT HAPPENED TO AMERICA //////////////////
case closed
Reply
10-29-2009 @ 5:19PM
David said...
There are many "public option" plans in other countries that seem to work well. Without insurance as a middle man and controlled costs, it should offer good care for less money. Why should company profits be between people and the basic needs of life? Part of the high cost of medical care now is the fact that hospitals are run mostly by for--profit corporations. Also,we just don't have enough doctors. Have you ever noticed how many speak with a foreign accent?
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10-29-2009 @ 6:18PM
billykopf said...
Dr. Turk: You are out of touch with the reality of Congress; The have failed to avoid the bankruptcy of Medicare, Social Security, FDIC, and most business management responsibilities and stewardship! It is not the one issue of healthcare reform, but the cumultive impact on seniors, mid-income and Drs. of Cap and Trade--energy tax passed on to consumers, Value Add Tax, which all will pay, and, the 500 billion cuts to Medicare coupled with no cost of living increases in SS--put us, all, in a worst financial position in 2010-11 than now. Politics and Special Interest can change any current legislation in a heart beat. Tell me honestly--Do you believe a TRILLION DOLLAR plan will not add a "dime" to the current deficit? Or better yet, additional cuts to Medicare and over all healthcare?? By the way, where are all the "new" healthcare providers, required to support the current Healthcare Plans, coming from?? Not from layed off auto, insurance, banking, and investment house personnel! This Administration and Congress are business tone deaf---
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10-30-2009 @ 8:40AM
judith watson said...
Our healthcare reform should start from a different perspective. Emphasis should be on health, which is how we individually should take care of our bodies. A life-style of no smoking, no drinking and possibly a life-style that includes a vegan diet. Monetary rewards should be in place for those who take care of themselves and possibly for those who spend little or no time in the doctor's office.
Reply
10-29-2009 @ 7:07PM
dinosaur said...
What happened to Obama's idea that everyone should have the same health plan that our rulers in congress have? The rulers in Washington can give trillions to crooked bankers, but cut medicare benefits. If you have a serious medical problem and can't afford care, or can't find a doctor who will take new medicare patients, there is a solution. Kill a congressman (or woman). The prison system will provide all the medical care you need. Medicare limits the days you can stay in a hospital, but the prison system has no limit.
Reply
10-29-2009 @ 7:41PM
Tom Cullinane said...
So, what else is new? The doctors are just like the insurance companies, the drug companies, the hospitals, and everyone else involved-no one wants to take a hit and give up their income. But, are they not better equipped to give up some of their income for the common good? How much income does a doctor need after his school loans are paid?
Reply
10-29-2009 @ 8:43PM
Vince Marchiondo said...
I wish all seniors could see the 60 minutes show from 10/25/09. they talked to people from medicare about all the false claims that they paid to people who pay sources for the names of medicare recipients, who then send phony invoices to medicare, that by law must be paid within 15 to 30 days. they totaled millions of dollars. medicare claims they don't have enough employees to investigate these claims. there was a woman who noticed on her "explanation of benefits" that s
they paid for medical equipment that she never had.
she notified medicare & was sent a letter thanking her for the notification.
This continued for 6 YEARS , but was never resolved. maybe Obama & his cronies can get their 100 billion
from taking care of things like this, instead of putting it on the backs of the elderly. they made a point of saying that medicare payments would not go up for 2010, but my medicare advantage plan went up $62 a month.
Obama,Congress & the Senate did a great job on the seniors. my only choice is to not have a prescription plan.
this would save me the $62 a month.
Reply
10-29-2009 @ 9:26PM
Paul said...
I am a working 72 year old. My local well qualified Doctors are all opting out of Medicare as it doesn't even cover their ofifce costs. I have complained to our local elected officials and to AARP abd no- one seems to care. Howerver, IRS is pleased to get my income tax check from my current work. This whole thing is a sham and we need to rise up in the phrase "I've had enough and wont take it any more" and through all the thoughtless, lying politicians out (BOTH PARTIES). Best to all of you who have been lied to. Paul
Reply
10-29-2009 @ 10:36PM
Jerry said...
The only thing that will be missing in any health care reform that is put into place will be the reform part. Why? Because the reformers (our honorable elected) who already have their health care needs nailed down will not do anything to kill the "campaign funds" they get from the medical and insurance industries. It is a silent source of income for them. Why should it cost millions of dollars to run for office? We now have televison. The candidates could be given 4 hours of time to present their qualifications. A lot cheaper. Todays Doctor--can't make a diagnosis without using a dozen machines (tests) and he surrounds himself with Physician Assistants and Nurse Practitioners so is he overworked? Certainly not underpaid! Look at all the commercials advertising new drugs. "See your Doctor for side effects like a 4 hour hard on. Pay another bill. Until people realize that they don't have to go to a Doctor for every pimple on their butt this madness will continue--just like the sports freaks that will pay ridiculous ticket prices. As long as your money is there for the taking it will be taken and at as much as they can get. When it is not coming in the costs will go down.
Reply
10-30-2009 @ 7:41AM
who noze said...
power to the elderly vote out the supporters of this pogam concentrated effort to defeat the smart guys to show our elderly strength , to fight back in my area it wud be schumer engel
Reply
10-30-2009 @ 7:01AM
HARRY said...
LIKE JOE WILSON SAID--------YOU LIE
Reply
10-30-2009 @ 10:01AM
Miles said...
My AARP insurance is going up for 2010, United Health Care along with my Medicare deduction out of my Social Security. (Isn't that an ironic name, "security"). ALL the insurance companies will up their premiums, just like the credit card industry is increasing the finance charges. They want to get their digs in just in case there really are going to be controls on them. Every year more and more of you will join this group of people, seniors, relying on Medicare. So, you better hope things do change. And seniors are totally being ripped off in the Medicare PArt D drug requirement. If you do not sign up for Medicare part D you will be assessed a penalty that will be deducted from SS until you start back in. We are going to continue to be used and abused FOREVER.
Reply
10-30-2009 @ 10:22AM
billfish said...
so...tom cullinane...as a physician, how much should i get paid? what is my worth to society...as much as a ceo? or perhaps a professional athlete? or a car dealer? or an attorney? what is at the heart of a good healthcare system...i mean, what makes it work. take the doctor out of the system and what is left? do you really know what my expenses are? would you really care if you did know? or is my particular profession's monetary worth to be carved out and valued by someone else. is there something morally perverse about my setting my own rates? i started private practice at age 38 after 12 years of education, with a huge debt. i had to moonlight all through residency to suppliment my income so my wife could stay home with our two children while i rarely got to see them. i now have the overhead and costs of running an expensive business with employees. how much sacrifice should i make, tom, so that you won't be inconvienced by having to pay almost as much as for that new car, so that you can have the highest quality health care in the world?
Reply
10-30-2009 @ 9:17PM
TruthUnsaid said...
You hit the nail on the head Billfish. You get what you pay for. If you want good healthcare, it requires good resources and even more a doctor with a head on his/her shoulders. If we want the smartest, best doctors to enter medical school, then we need to be sure they have the incentives to do so. Your experience is VERY typical-and you forgot to mention the HUGE debt you have incurred-enough to buy a house-to fund your education and by the time you were earning money your friends have been sacking away in their 401k for 20years. I bet you feel like you are trying to also beat the dealer in poker at the casino trying to get reimbursed by insurance or medicare-and hired a few employees to beat the system. OH and are you you seeing your children yet? because you had to stay late to see a few more patients. OH, but the drug rep, the equipment rep and the hospital mba type are much better dressed than you.....
11-02-2009 @ 7:38AM
Rick said...
In America, our"God given" right to sue is as closely held to our culture of individual autonomy and "freedom" as owning guns, smoking cigarettes, demanding abortions, same sex marriage, smoking pot, talking on cell phones while we drive, and drinking to excess. I don't think it is practical to try to limit access to public filing of lawsuits or define them on a sliding scale of "frivolousness". However, if a Physician charged with malpractice is tried by a jury of his peers in a "Hospital court", by an elder/retired, trained and educated peer group that is representative of and knowledgeable of the "community standard of medical care" then at least lawyers will pick and choose their cases very carefully before their resources are devoted to less appropriate cases. The second option is to create a private or public fund to take care of family members that lose their breadwinners unexpectedly. Medical malpractice awards are often made for survivors' social welfare considerations. Most elective medical procedures, for example gastric bypass may have a risk of death of 0.2-2%, but are we to limit access to that possibly life-saving procedure to the 99 out of 100 individuals that are morbidly obese because we as Physicians may be vulnerable to a law suit if our patient dies? It is possible to tilt the balance subtly in one direction by new legislative initiatives without "taking away" American's "God given" freedoms to "live large" and "be in charge". The tone of the language means everything in a negotiation. As adults, we weigh risks and benefits and judge disinsentives everyday in our behavioral choices. Ultimately, we make the right (most advantageous) decisions most of the time.This is no different.
Reply