Already counting down to the next physician fee cut

By Robert Laszewski

Robert Laszweski has been a fixture in Washington health policy circles for the better part of three decades. He currently serves as the president of Health Policy and Strategy Associates of Alexandria, Virginia. You can read more of his thoughtful analysis of healthcare industry trends at The Health Policy and Marketplace Blog.

Is the "medical home" a real solution?

Now that this year's fight over Medicare physician fees is all but over, it is important to turn to real solutions.

The recent Senate and House vote to kill the 10.6% physician fee cut only defers the problem for 18 months.

On January 1, 2010, the Medicare physicians are slated to get an automatic 21 percent fee cut!

More importantly, the Medicare physician fee structure is grossly out of whack with primary care docs starving under the current fee system.

In a recent post, I asked just what is the solution to this problem? I got a record number of replies from docs all along the lines that they are fed up with being underpaid by Medicare and they aren't going to take it anymore. If they have to go to a cash relationship with patients for the fees they deserve, or balance bill, so be it.

While their frustration is understandable, these aren't solutions. Collecting $350 upfront from a senior, as one doc suggested for a comprehensive visit, isn't progress.

So, we have 18 months to just keep heading toward the next cliff (this one twice as big at 21%), let the system degenerate (cash, balance bill, or a crisis in access as docs stop taking patients), or actually start taking some constructive steps forward.

It strikes me that the growing discussion over the "Medical Home" is a constructive one that we need to continue developing. The "Medical Home" isn't a new fee schedule, it's a new patient relationship structure that could be the foundation for real physician payment reform. Because the current fragmentation in the system is at the heart of the problem, I will suggest that it is structure that is more important than just fees toward the objective of better cost and quality.

In a recent post, I said it was the doctors that have to take the lead in the development in a new payment system for Medicare--and therefore the entire system since private pay is generally based on the Medicare structure. The politicians aren't going to do it until they get permission from the doctor lobby for a specific plan. As the recent House and Senate votes showed, the politicians are afraid of the docs -- but not so afraid that they have been forced to come up with a real solution. The private payers aren't going to do it because they aren't going to unilaterally develop something the doctors will accept.

It is notable that the leading primary care physician organizations -- Family Physicians, American College, and Osteopaths -- have gotten out front on this idea.

And to the health plans, you need to be encouraging real solutions because, as the recent votes made clear, the next 21% is going to come out of your hides if a real solution isn't found!

Here's a Wikipedia article on the Medical Home.

I don't pretend to be an expert in this area but Vince Kuraitis over at the e-CareManagement blog, who first pointed me in this direction, is and he has done a large number of posts on the issue. I encourage you to take a look.

But here is what I am arguably an expert on: Docs, you have 17 months, 20 days, and 13 hours until you get hit with an automatic 21% fee cut. You can throw all the tantrums you want and you will again almost certainly get the the politicians to put off the next cut. But you will still be stuck in the mud with the same out of whack fee structure.

Recent post: There Won't Be Any Health Care Reform Without Physician Payment Reform and There Won't Be Any Physician Payment Reform Unless the Docs Lead The Way