Medicare Physician Reimbursement System Requires Changes, Opinion Piece States
July 27th, 2008 | by admin |The Medicare law enacted earlier this month to delay for 18 months a 10.6% reduction in physician reimbursements “fails to address the problem with the Medicare payment system, which is not the amounts doctors are paid but the way their payments are calculated,” Peter Bach, a physician at Memorial Sloan-Kettering Cancer Center and former senior adviser to the CMS administrator, writes in a New York Times opinion piece. Medicare reimburses physicians for specific services, with each payment “meant to reimburse the doctor for time and skill he or she devotes to the patients,” but “it is also supposed to pay for overhead,” which “is where the problem begins,” according to Bach.
Under the current system, the “best way for a doctor to make money … is not to spend time with patients but to use equipment as much as possible,” which “means moving the maximum number of patients through the practice and spending the minimum amount of time with each one,” Bach writes. He adds, “This is part of the reason that spending on physician services nationwide has risen every year since 2000 by about $25 billion.”
In place of the current system, “doctors should be given a stipend for each of their patients” for their time, with larger payments for “patients with complicated medical conditions,” and those payments “should not be influenced by the number of services or tests a doctor orders,” Bach writes. For the overhead costs, “doctors should be paid an amount that covers the typical cost of tests and treatments needed to address a patient’s condition,” he adds.
Such a system “offers no incentive to run unneeded tests, and it has been credited with substantially slowing the growth in Medicare payments to hospitals,” Bach writes. According to Bach, without changes to the current system, the “fights in Congress over raising or lowering payment rates will continue,” and “doctors will still have no financial incentive to do what is most important: spend more time with their patients” (Bach, New York Times, 7/24).
Reprinted with kind permission from http://www.kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation.
© 2008 Advisory Board Company and Kaiser Family Foundation. All rights reserved.
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