Medicare Conundrum

I highly recommend reading an article http://www.ama-assn.org/amednews/2010/08/16/gvl10816.htm published in AMA NEWS entitled, "Medicare trustees' upbeat outlook relies on big pay cuts for doctors, Aug. 16, 2010."
In the 2010 Medicare trustees report the trustees said Medicare savings that are included in the overhaul will extend the insolvency date of Medicare's hospital trust fund to 2029, 12 years beyond the point that last year's report said Part A would run out of money.Medicare Part B does not face insolvency because it is funded by a combination of general tax revenues and beneficiary premiums. Expenditures on outpatient care grew at an average annual rate of 8.3% during the past five years, exceeding gross domestic product growth by 4.2 percentage points annually, on average. Projected annual spending growth for Part B is estimated to average only 5.3% during the next five years, about the same as the GDP growth rate, the report said. But this assumes deep physician pay cuts will take effect. Unless Congress steps in, physician rates are scheduled to decline 23% on Dec. 1, an additional 6.5% in January 2011 and 2.9% in 2012.
Medicare Part B spending now approximates 1.5% of the GDP, the report said. Last year's report projected that figure would increase to 4.5% by the end of the trustees' 75-year projection. With the new law, it is now projected to reach only 2.5% of GDP by the end of the long-term window.Preventing rate cuts to doctors would increase that estimate, as would a failure to realize long-term savings envisioned under reform.
What does this mean for physicians?

* We need to focus on the implementation of new care models, such as patient-centered medical homes, accountable care organizations.
* We should expect and prepare for payment bundling and pay-for-performance.
* We should deploy and apply systems that help us to measure, optimize and improve productivity.

Unfortunately, many of us will prefer to resist and protest the inevitable change. In my opinion responsible physician leaders should prepare their membership for and guide them towards meeting the new challenges of a more complex healthcare delivery system by using finite (financial) resources.


Yours
Bernd