NEJM Perspective - On the SGR formula for determining medicare cuts

[Agloco]

There has been some discussion on the board about physician compensations and their potential impact on the delivery of quality care. This NEJM article peels back some of the layers and delves more deeply into the worst offenders contributing to the "SGR hole" (yes, rad onc is at the top......pot shots welcome). It also sheds some light into why across the board cuts may prove to be detrimental to an industry already struggling to keep pace with demand. With full implemetation of Obamacare looming on the horizon it's essential, IMO, that we strike the correct balance between costs and compensation lest we find ourselves with a severe shortage in sub-specialties where disease incidence is on the increase.

Without further ado, I abdicate the soap box........


Recently, the Centers for Medicaid and Medicare Services announced a scheduled cut in Medicare physician fees of 27.4% for 2012. This cut stems from the sustainable growth rate (SGR) formula used by the physician-payment system. Implemented in 1998 to curb the growth in expenditures on physicians' services, the SGR formula is used to determine annual adjustments to payments for those services.

Because the super committee that was convened to address the budget deficit failed to reach agreement, physicians may face further fee cuts across the board. No one knows exactly what effect fee cuts of the magnitudes discussed would have, but because these cuts are applied evenly across all states and across all specialties and services (with the potential exception of fees for primary care), some health care providers will receive cuts in pay despite the fact that they contributed little to the increases in the volume of services delivered that resulted in the SGR-dictated cuts.


http://www.nejm.org/doi/full/10.1056/NEJMp1113059

[ElNono]

Obamacare doesn't necessarily attack costs. Which is why it's a failed piece of legislation.

[Capt Bringdown]

Obamacare doesn't necessarily attack costs. Which is why it's a failed piece of legislation.

Bingo. But what would we expect from the Heritage foundation?

[mercos]

Ultimately I believe we are going to have to go away from the fee for service model all together. Prices are out of control, and this method of delivery is simply to open to fraud.

[TDMVPDPOY]

problem with obamacare, you cant satisfy all the peoples needs....

euthanasia will solve most of obamacare problem

[TDMVPDPOY]

Ultimately I believe we are going to have to go away from the fee for service model all together. Prices are out of control, and this method of delivery is simply to open to fraud.

whether its the public or private system, i see nothing wrong with a fee system, if you have the money to afford such operations, would you prefer to be on a waiting lists? or jump the que and select who to operate on you....

then again you can always fly out to countries with cheaper prices for 3rd world operations

i guess most govt policies are hard to deal with when you have a big population and a bunch of freeloaders who use it multiple times a year compared to someone whose paid their fees each year but never use the system, wheres the fairness in that?

[mercos]

I would not prefer people do without medical care so I don't have to wait on a list. That strikes me as incredibly selfish. Getting rid of a fee for service system does not mean we get rid of fees all together. You would likely replace it with a fee for results system. In that scenario hospitals get paid for curing or fixing you not just for treating you. That would prevent doctors from ordering extra tests and other fraudulent charges.

[ElNono]

I said long ago I'm all for a mixed system. Have universal care with strict price controls, and then for those that want and can afford better/different service, then let them pay into an private insurance/system that offers those "concierge" type of services.

But if you're not addressing cost from the get go, you're not dealing with the problem.

[Agloco]

I said long ago I'm all for a mixed system. Have universal care with strict price controls, and then for those that want and can afford better/different service, then let them pay into an private insurance/system that offers those "concierge" type of services.

But if you're not addressing cost from the get go, you're not dealing with the problem.

:tu

I think we agree regarding cost and the failure of Obamacare to address this. What we don't necessarily see eye to eye on is the predominant source of those costs (or how to best attack them I'd assume). I don't claim to know the exact figures, but I can say that my participation in building 200 million dollar for-profit proton therapy facilities is not helping matters. Charging patients 50k per treatment seems, to me, a bit excessive. This report does a good job of bringing that sort of cost disparity to light.

[xrayzebra]

Whats wrong with people just taking care of themselves? Do we have to have government
tell us what we need and don't need, how doctors and hospital's should treat us or
type of treatment we can (are authorized) to have. What is cost effective and what
isn't. Treatments are too expensive and will not be provided based on age or type of
illness you have.

And, I know this will set off a storm of arguments, there are death panels under
Obamacare. And some of their decisions are already impacting healthcare in the
U.S.. Such as some chemo's have been pulled because of cost for breast cancer
treatments. They are using all kinds of propaganda now for doing away with
Prostate test.

The problem as I see it, it now literally cost billions to bring a drug to market with
all the regulation on testing. Somehow drug companies must recoup this cost and
it makes the drug very, very expensive.

Believe it or not, in my youth we made our own decisions, paid our own cost to
obtain drug treatment and also cost were much less expensive. And doctors let
their patients work out payment plans with them.

[mercos]

There are death panels now, and have been for decades. They are called health insurance companies. They did not arrive under the new health care law.