Medicare and the Super Committee: Can doctors afford to lose two percent of their payments?


Medicare and other health care services could see their funds drained in any number of ways as, over the next few months, the congressional Joint Committee on Debt Reduction–better known as the "super committee"–looks for ways to reduce the national debt.

Health care interests are well represented among the big donors to the committee's dozen members. Half those members–including Max BaucusFred UptonXavier Becerra and Chris Van Hollen–number health care concerns among their top ten career donors. Collectively, health care professionals ranked fourth among those career donors, giving $9.3 million, according to an analysis of Center for Responsive Politics data by

But even with the industry's influence–health interests have already reported spending more than $247 million lobbying in 2011, more than any other, according to the Center for Responsive Politics–some cuts are virtually guaranteed to be on the menu. Sharply rising health care costs and their centrality to the political discourse make health care a certain target, in spite of the intense lobbying onslaught that's already begun.

It's not just wonks who believe it: health care stocks plunged, in many cases much further than the rest of the market, over the last couple of weeks, in part due to the looming debt battle. No one knows yet which, if any, health care programs will be targeted, although some have been repeatedly bandied about, including bits and pieces of the Patient Protection and Affordable Care Act, the health care overhaul passed in 2010.

But what happens if the bipartisan committee can't come to an agreement — or Congress won't pass their recommendations? At least one long-time Washington insider thinks it's unlikely that they will. Stan Collender, a former congressional budget staffer, told Kaiser Health News that he gives less than a five percent chance that Congress will pass any of the committee's recommendations. "In an era of hyper-partisanship have you seen any other special committee of elected officials come up with some broad-based deficit reduction package looking at tax increases and spending cuts?" he asked.

One thing is certain: if Congress doesn't pass the committee's recommendations by December 23, Medicare providers will see their payments cut by an automatic two percent. Some doctors' groups and seniors' advocates worry this will lead more doctors to restrict their Medicare practices — or to stop seeing Medicare patients altogether.

It isn't an idle worry. A spate of news articles in the last couple of years warned of a Medicare doctor shortage, especially among primary care physicians. Surveys conducted by doctors' groups seemed to bolster the concerns: the American Medical Association, among the top 100 donors to the Super committee members, found that more than 30 percent of primary care doctors in their survey limited the number of Medicare patients in their practice.

It makes sense that Medicare might be losing doctors, since the program pays health care providers an average of about 80 percent of what private insurers shell out, and has for years. But has that already started happening?

A couple of recent studies tried to answer this question, with surprising results. A recent study based on CDC surveys found that a small percentage of doctors were leaving Medicare, but not as many as were dropping private insurance patients. (Almost 93 percent of doctors still accepted new Medicare patients, the survey found, down from 95.5; private fee-for-service acceptance slipped from 97 percent to under 90 percent over the same period, 2005 – 2008.)

A recent report by MedPAC, the independent panel that advises Congress on Medicare costs, came to similar conclusions. Not only did patients with private insurance (aged 50 – 64) report more difficulty getting an appointment with a new primary care doctor in 2010 than did Medicare patients, they also were more likely to report having to wait too long for an appointment.

"Essentially, the percent of physicians taking Medicare is still extremely high," said Miriam Laguesen, a professor of health policy and management at Columbia University. "We're not at a crisis point right now."

There are a few reasons why doctors might choose to accept Medicare even though it pays less than the private companies. Researchers with the Robert Wood Johnson Foundation in 2009 found that slightly more doctors thought Medicare gave them more autonomy to make decisions and made it easier for them to get the services their patients needed.

But there might be a simpler reason. "If you're not going to take Medicare patients in the next two decades and you're not a pediatrician, who are you going to take?" said Jonathan Oberlander, a professor at the University of North Carolina, Chapel Hill, and author of the book, The Political Life of Medicare. "Most physicians cannot turn down Medicare patients simply because they're too reliant on [them]."

If doctor participation in Medicare generally remains high, the numbers among family doctors are more troubling. The MedPAC study found that only 83 percent of primary care physicians accepted new Medicare patients in 2010.

Partly, this is because these doctors make much less than specialists and have narrower profit margins to protect, even after a recent set of Medicare fixes that boosted their earnings. Specialists are also able to perform more procedures, and under the current system, doctors receive more money the more individual procedures they perform.

"It's hard to imagine [a two percent pay cut] would have much of an effect on physicians accepting Medicare patients," said Bradley Herring, director of the health economics and policy program at Johns Hopkins.

Dr. Roland Goertz, president of the American Academy of Family Physicians, said that while he thinks a two percent pay cut would cause a small number of doctors to reach their tipping point and to halt or restrict their Medicare practices, there's a much bigger bogeyman on the horizon.

Since 1997, Congress has been required to keep Medicare payments to doctors at or below the economy's growth rate. Since 2002, payments have outstripped that rate, known as the Sustainable Growth Rate (SGR), but rather than take the politically toxic step of cutting off money to doctors, Congress puts it off — every year — with something called the "doc fix."

By now, those required cuts have grown to almost 30 percent of doctors' current payments. They're worth nearly $300 billion.

Dr. Goertz said there's "no question" we'll see massive changes if this sword of Damocles falls: many family practice doctors will limit the number of Medicare patients they see or leave the program altogether, leaving seniors scrambling to find doctors. But most experts say it's unlikely that will happen any time soon.

"The bottom line is the SGR is a useful political fiction," said Oberlander, the University of North Carolina professor. "Ending the fiction is costly." Oberlander said he would be "stunned" if the super committee ended the annual doc fix. "[My] best guess is they find another patch and maintain the fiction."