Search This Blog

Thursday, September 17, 2009


This is the cruelest and most effective way to ensure that doctors are forced to ration care for their senior citizen patients. It takes the telltale fingerprints from the government: instead of bureaucrats directly specifying the treatment denials that will mean death and poorer health for older people, it compels individual doctors to do the dirty work. It is an outrageous way to "reform" health care – by taking it away from America’s senior citizens.
National Right to Life Committee Executive Director David N. O’Steen, Ph.D.

Senate Finance Committee Chairman Max Baucus’s “Mark,” released September 16 and due to be considered in committee beginning Tuesday, September 22, contains a provision penalizing doctors based on how much medical treatment they direct for senior citizens on Medicare. It establishes that for at least five years (2015-2020), Medicare physicians who authorize treatments for their patients that wind up in the top 10% of per capita cost for a year will lose 5% of their total Medicare reimbursements for that year.

This means that all doctors treating older people will constantly be driven to try to order the least expensive tests and treatments for fear that they will be caught in that top 10%. Note that this feature operates independently of any considerations of quality, efficiency, or waste – if you authorize enough treatment for your patients, however necessary and appropriate it may be, you are in danger of being one of the 1 in 10 doctors who will be penalized each year.

Moreover, the penalty for Medicare doctors creates a moving target – by definition, there will ALWAYS be a top 10%, no matter how far down the total amount of money spent on Medicare is driven. Say that in 2015 the top 10% is anything over $10,000 per patient. In 2016 most doctors will scramble to hold down the treatments they authorize to avoid breaking that limit – with the result that the total amount spent will drop, so that the top 10% might then be, say, anything over $9,500. As the process repeats, the next year it might be anything over $9,000, the year after that anything over $8,000, and so on.

It's like a game of musical chairs, in which there is always 1 chair less than the number of players -- so no matter how fast the contestants run, someone will always be the loser when the music stops.

The disincentive to provide treatment for senior citizens the penalty creates is determined purely by cost, without any assessment of balancing cost with benefit. It will create a constant sense of uncertainty in doctors, since none can know in advance precisely what the cutoff for a given year will be – resulting in ever-increasing pressure to limit treatment and diagnostic tests to the bare minimum.

The provision to which this blog entry refers is as follows ( from documents available at ).

On pages 80-81, in the "Expansion of Physician Feedback Program" in Title III, Subtitle A, Part I; specifically, at the top of page 81: "Beginning in 2015, payment would be reduced by five percent if an aggregation of the physician's resource use is at or above the 90th percentile of national utilization. After five years, the Secretary would have the authority to convert the 90th percentile threshold for payment reductions to a standard measure of utilization, such as deviations from the national mean."

On page 80, the Chairman's Mark states, "In preparing feedback reports, the Secretary would be required to make appropriate data adjustments to (1) account for differences in the demographic characteristics and health status of individuals so as not to penalize those physicians who tend to serve less healthy individual [sic] who may require more intensive interventions, and (2) eliminate the effect of geographic adjustments in payment rates."

While these adjustments may reduce the degree to which physicians are disproportionately penalized if they have sicker patients or work in high-cost areas, they do not change the fundamental danger of this provision, which (as explained above) is to create continual pressure on doctors to make ever-increasing reductions in the treatments and tests they order for their patients so as to avoid being in the penalized top 10%.

CBO rates this as taking $1 billion from Medicare payments over a period of 6 years. See CBO 9/16/09 letter to Chairman Baucus, Table, page 3 of 7.

1 comment:

  1. I linked to this article in my blog. Thanks! Got the link from my NRLC e-newsletter.