The Free Press, Mankato, MN

July 31, 2013

Change Medicare, and pricing

Why it matters: A bipartisan plan to bring more sense to Medicare price could save billions

The Mankato Free Press

---- — Medicare has long been used in politics of fear campaigns by both parties, so a bipartisan bill to reform Medicare and bring common sense to its pricing comes as a welcome effort.

A bill moving through Congress would change the way doctors are paid at the same time remove some of the politics from the yearly vote to stop automatic cuts to doctor Medicare payments. The proposal to reform pricing is part of a larger bill that would also begin paying doctors for outcomes instead of the number of procedures they perform.

A recent investigation into Medicare pricing by the Washington Post offered plenty examples where an antiquated pricing system just didn’t make sense. It showed there were conflicts of interest on the board that sets Medicare pricing and prompted a thorough review. Now, we must move ahead with aggressive reform.

The Post found that the board that recommends pricing was made up only of members of the American Medical Association, a group of physicians but also one of the most powerful lobbying groups in the country. They were recommending the pricing their members receive. It’s a conflict of interest that defies common sense. There are plenty of other expert groups out there that could recommend appropriate pricing, yet for years it seems only the AMA was at the table.

The Post report also found problems with the pricing model. It has long been based on how much time it takes a doctor to perform a particular procedure. In one example, the Post reports that doctors were being paid for 75 minutes of work on a colonoscopy that in reality took only 15 minutes. In another case, the Medicare rates are set as if 41 percent of gastroenterologists do 12 hours of procedures a day, according to the Post report.

The bipartisan bill to institute the reforms also addresses in part the annual debate in Congress over the so called “doc fix,” — that regular overriding of Medicare cuts to physicians that typically cost taxpayers billions.

So far, the bipartisan bill would replace the annual need for the doc fix with a more reasonable 0.5 percent increase in physician payments each year. The bill is sponsored by Rep. Fred Upton (R-Mich.), Rep. Joe Pitts (R-Penn.), Michael Burgess (R-Texas), Frank Pallone Jr., (D-N.J.), Henry Waxman (D-Calif.) and John Dingell (D-Mich.)

Rep. Jim McDermott, (D-Wash.), a physician himself, has authored a separate bill to set up a more independent advisory committee to recommend Medicare pricing. Long a critic of the current procedure, McDermott told the Post: “I’m not anti-doctor, but there has to be some reality here.”

We would also recommend that Medicare consumers have full access to the prices paid for the services they receive. Medicare and the medical establishment has long resisted opening up their books to consumers and taxpayers.

Without realistic Medicare pricing, there is no way to measure the overall cost and value to taxpayers. Unfortunately, for years, the pricing has been a kind of quid pro quo, it appears for the medical community. We have no doubt there are physician services and hospitals that are underpaid for the services they provide and that Medicare prices don’t always cover costs.

At the same time, medical service pricing is extremely complicated. Medicare assesses over 10,000 procedures. All can be done in places were doctor and hospital costs vary widely.

But we are coming into a Medicare tsunami. The people coming into the system will grow exponentially in the years ahead. The entitlement of Medicare is not likely to go away soon given its political popularity, so the reforms are badly needed.