[misc.handicap] Medicare Reform Will Hit Elderly

John.Covici@f460.n101.z1.fidonet.org (John Covici) (06/25/91)

Index Number: 16448

Medicare `reform' will  hit the elderly

by Steve Parsons

On May 31, U.S. Medicare officials announced the most
sweeping changes in reimbursements for physicians since
the inception of the program in 1965, and the changes will
be a disaster for the 34 million elderly and disabled now
covered by the program.
   The new fee schedule, which will go into effect Jan.
1, 1992, will standardize reimbursements throughout the
country for more than 4,000 services, thus abolishing the
traditional method of reimbursing ``usual and customary''
fees, which have increased far beyond the average rate of
inflation and have been much higher for urban areas. The
new schedule is touted as key to staunching the doctor
drain from rural to urban areas, by reducing the monetary
advantage that urban physicians have had over rural
practitioners--especially if private insurers follow the
Medicare schedule, which they undoubtedly will do.

           - Specialized health care suffers -
   The new schedule is also supposedly designed to
lessen the imbalance between ``excessive'' fees for
specialist practices and procedures--including
ophthalmology, anesthesiology, diagnostic services, and
surgery--and relatively lower fees for internists and
family and general practitioners engaged in more
``preventive'' medicine.
   The revised fees, however, permit only a modest and
totally inadequate increase for general practitioners and
internists, while slashing reimbursements for more
sophisticated medical practices. By 1996, reimbursements
for general hospital and office visits will increase
26-27%--which amount to perhaps 15% more than would have
been paid out under current fee policy. This doesn't come
close to offsetting nearly 40% in cuts by 1996 in
virtually all the more specialized areas.
   For example, Medicare would pay physicians who
performed coronary bypass surgery only $1,925 in 1996,
compared to $3,181 this year; cataract surgery would only
get $832, against $1,342 this year; radiation therapy
would receive $99, against $162. Although fees in future
years will be increased for an inflation factor, Congress
has set that factor at less than 4%, meaning that the 40%
cuts will actually amount to well over 50% by 1996.
   That means an enormous increase in the number of
doctors who will refuse to treat Medicare patients, or
reduce treatment, unless these patients pay the difference
out of their own pockets. When the private insurance
companies follow suit, countless other patients--and
doctors--will wind up in the same boat.
   Furthermore, as the American Medical Association
points out, these reductions signal that the Bush
administration is ``nullifying payment gains for many
rural and primary-care services,'' contrary to the intent
of Congress. In fact, according to Dr. Robert Graham,
executive vice president of the American Academy of Family
Physicians, ``Some family physicians could lose money on
some services.'' The only major difference in urban and rural
physician costs that Medicare will now cover is higher
``office costs,'' the largest component of which is higher
office rents. This means {de facto} Medicare subsidies for
the collapsing real estate and banks' mortgage debt.

                - Disguised budget cuts -
   Even though, under the revised fees, Medicare payouts
to physicians will rise from this year's $32 billion to
$50 billion in 1996, that is $3 billion less than
projected under the current system. This $3 billion
``savings'' is actually a cutback, charges Dr. Graham, ``a
budget-reduction strategy, not the congressional intent of
physician payment reform,'' which mandated a more
equitable distribution of Medicare payments across the
professions, while fostering higher remuneration for
``primary care'' and rural physicians. That $3 billion
is what the AMA and other physicians' organizations believe
should go for family physicians. This would have given
them a 30% real increase instead of the 15% now proposed,
and resulted in better preventive care.
   The government responded that the savings was just by
chance, due to ``technical factors'' in setting the fees,
with no intent to cut the budget. That's pure hogwash. In
fact, the fee revisions reflect the cost-accounting
numerology of the gnomes at Medicare's Health Care
Financing Administration (HCFA). With total disregard for
any of the intangibles in competent medical treatment,
these bureaucrats set fee ``values'' on 4,000 medical
treatments, assigning values from 1 to more than 110.
These numbers are based on ``studies comparing the time,
effort, and stress it takes to perform'' different medical
services, reports the {Washington Post}--but actually
reflect the budgeting decision ``that surgery and other
complex procedures have heretofore been too highly valued
relative to consultations and office visits.''
   That's not all. HCFA then chose a magic
number--$26.87--to be the ``conversion factor.'' This is
the base number that is then multiplied by the numerical
``values'' of the various procedures, to get the Medicare
reimbursement fees. By simply reducing this magic number,
and assigning lower ``values'' to procedures, the entire
fee schedule can be cut.
   These are the ``technical factors'' that just
happened to result in a $3 billion ``saving,'' and will
undoubtedly be used to slash more and more from Medicare,
and all health insurance, in the future.

>From EIR V18, #23.

--
Uucp: ..!{decvax,oliveb}!bunker!hcap!hnews!101!460!John.Covici
Internet: John.Covici@f460.n101.z1.fidonet.org