More maydays for a Medicare meltdown

AMA Leader Commentary. By Ronald M. Davis, MD, Dec. 17, 2007.

AMA LEADER COMMENTARY

A few words about current events in medical practice

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A message to all physicians from AMA President Ronald M. Davis, MD.

Thomas R. Saving, a public trustee of the Social Security and Medicare system, published a guest column in The Wall Street Journal on May 9 in which he predicted a "Medicare meltdown." He wrote that the meltdown will occur in the coming decades, unless huge reforms occur, because Medicare is consuming a relentlessly increasing proportion of the federal budget.

Missing from his essay was any mention of the looming crisis in Medicare payment to physicians -- a 10% cut in Medicare payment beginning on Jan. 1, 2008, and projected cuts totaling about 40% through 2016. Meanwhile, physician practice costs will increase 20% during that time period.

These cuts are being driven by a flawed formula -- the sustainable growth rate formula -- which the AMA and many others have urged Congress to abolish. If the SGR cuts occur, huge numbers of seniors will face severe problems accessing physicians, and the meltdown predicted by Saving will happen much more quickly.

When the U.S. House of Representatives approved legislation on Aug. 1 to reauthorize the State Children's Health Insurance Program, it included a provision to replace Medicare physician payment cuts totaling 15% over the next two years with a 0.5% increase in each year. The House bill captured funding to reauthorize SCHIP and avert the SGR cuts by eliminating overpayments to Medicare Advantage plans and increasing federal excise taxes on tobacco.