The Medicare man: Answers for the future

When it comes to Medicare policy, Glenn M. Hackbarth wields influence with lawmakers as MedPAC chair. Here he shares his views on the program's general health.

By David Glendinning, AMNews staff. May 2, 2005.

Congress this year is debating several Medicare issues that could have a major impact on physicians -- from reimbursement cuts to pay-for-performance.

When Congress needs help tackling such matters, it turns to the Medicare Payment Advisory Commission, an independent panel of health experts that makes recommendations to lawmakers.

Given the importance of Medicare topics in the legislative spotlight this year, the commission's work is of particular interest to medicine. AMNews recently spoke about some of these issues with MedPAC Chair Glenn M. Hackbarth.

Question: The commission is calling for a Medicare rate increase for physicians next year. If Congress follows your advice, doctors will see a roughly 2.7% boost. Why does the panel feel that physicians need this update?

Answer: We see two basic flaws in the current system. One is that it disconnects the prices paid to physicians from changes in their costs for providing the services. And the second, while billed as a volume-control system, it logically cannot have any positive effects on decisions of individual physicians about volume. Because the cuts are applied across the board, every physician is treated the same regardless of whether he or she controls volume or inappropriately increases volume.

Since there's no reward for good performance, the system can't alter behavior in a constructive way. For those two basic reasons, we think the system is fundamentally flawed, and we ought to have a basic mechanism that looks at the appropriate price increase each year based on available data.