Medicare cuts costly

Posted: Thursday, August 01, 2002

Congress must focus on a key threat to Alaska's 40,000 Medicare beneficiaries access to health care services. Steep cuts in Medicare reimbursement for physician services mean that fewer beneficiaries will be able to access physicians' services when necessary.

Despite the increasing costs of providing health care services, the congressionally mandated reimbursement system used by Medicare reduces payments for physician services by 20 percent between 2001 and 2005.

The options for medical practices to reduce costs are limited: reducing the services offered, cutting back hours, eliminating staff, reducing the number of Medicare patients in the practice. Some practices simply close.

The number of new physicians entering Medicare-dominated specialties declined each of the past three years as residents choose other fields of medicine. Rather than working increasingly long hours, just to try to keep their doors open, older physicians are likely to retire. These two trends bode ill for Medicare patients access to care.

The House of Representatives has proposed replacing these cuts with approximately 2 percent increases from 2003 through 2005. Meanwhile, Congress must make permanent changes to physician reimbursement to account for the rising costs of providing services. The proposal also increases funding to teaching hospitals thereby ensuring the future supply of doctors.

Until similar legislation passes the Senate and White House, tens of billions of dollars will be drained from physicians in the Medicare system, jeopardizing continued access to care for 40 million Medicare beneficiaries.

Richard L. Neubauer, MD, FACP

Governor, Alaska Chapter American College of Physicians-American Society of Internal Medicine


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