June 7, 2002

June 7, 2002 | Commentary on Health Care

Healing Medicare

Doctors are giving up on Medicare.

More and more of them aren't accepting new Medicare patients. Some physicians are withdrawing from the government health-care program for seniors altogether -- even though, in the words of one orthopedic surgeon, it "breaks my heart."

"These are the patients that I love to see the most," Dr. Abraham Rogozinski of Jacksonville, Fla., told The New York Times. "They bake you poundcakes for Christmas because they are so happy with the care that you give them."

The reason for the physician flight: Medicare's complex pricing system. Doctors have seen their reimbursements cut by 5.4 percent this year, even as they're forced to comply with a growing pile of practically incomprehensible regulations. Even the pay hike Congress will consider soon is a stopgap solution.

In many cases, the reimbursements don't begin to cover the cost of providing care to Medicare patients. And even if they did, there are the regulatory hurdles: A recent American Medical Association survey of doctors found that more than one-third spend an hour completing Medicare paperwork for every four hours of patient care.

The symptoms of deep discontent are unmistakable. More than eight out of every 10 health-care professionals say they don't consider Medicare's fee schedules "fair," according to a survey by Yankelovich Partners, a California-based research firm. And 71 percent said the reimbursement schedules don't ensure quality care. No wonder 17 percent of family doctors, according to the American Academy of Family Physicians, are refusing to take new Medicare patients. This is a bad omen, especially since America's population is aging rapidly. (The 77-million baby-boom generation will start retiring in less than 10 years.)

Worse, America's doctors are being held hostage by Washington's high-stakes politics. The American Association of Retired Persons (AARP), for example, opposes increased payments to doctors in Medicare unless Congress first agrees to provide a "meaningful" prescription drug benefit -- meaning one that would cost about $750 billion over 10 years. That's almost twice as large as the leading Senate Democratic Medicare drug proposal, and it would guarantee a sharp increase in the program's rapidly rising costs. Seniors and taxpayers alike would pay a high price.

How could Medicare's condition have deteriorated so badly? Its problems are built into its bureaucratic structure. We're talking, after all, about a system of central planning and price regulation in which bureaucrats control nearly all aspects of the financing and delivery of medical services. Congress and the Centers for Medicare and Medicaid, the federal agency that runs Medicare, dictate which benefits, medical services, treatments or procedures will -- or will not -- be made available to seniors.

This means that with every benefit change, medical breakthrough or technological innovation, members of Congress and the Medicare bureaucracy -- not exactly a rapid-response bunch -- have to change the law or regulations to make the needed changes and keep up with the times. Medicare patients often must wait while patients with private health insurance enjoy quicker, more reliable access to new medical services and technologies.

The doctors who refuse to see new Medicare patients are reacting, understandably, to the system's most inescapable features: mountains of red tape, sluggish and inappropriate payments for services provided, fears of retaliation for even accidental book-keeping mistakes. That's why a short-term pay hike, however welcome, isn't enough. Policy-makers must address the problems at their roots with genuine reform.

Fortunately, a model for such reform already exists. It's called the Federal Employees Health Benefits Program (FEHBP). It's a patient-centered, consumer-driven system that covers members of Congress, federal workers and retirees, and their 9 million family members. FEHBP members select the health coverage they want from a wide variety of competing plans, all of which offer solid prescription-drug benefits.

Congress should use the FEHBP -- the health-care program they designed for themselves -- as a blueprint to remodel Medicare. A renewed system, based on patient choice and a competitive market, would enhance the quality of health care for the rapidly growing number of senior citizens and improve the working environment for their physicians.

In the short term, Washington policy-makers should boost payments to doctors in Medicare (at the very least reversing the latest cut). They should also intensify their review of the regulatory burdens facing doctors and other medical specialists in the Medicare program and give them timely relief from senseless red tape.

In the long term, though, forget about giving Medicare a facelift. For America's retirees, their health-care program needs to be fully rejuvenated. Our seniors -- and the doctors who desperately want to serve them -- deserve nothing less.

Robert Moffit is director of domestic policy studies at The Heritage Foundation (www.heritage.org), a Washington-based public policy institute.

About the Author

Robert E. Moffit, Ph.D. Senior Fellow
Center for Health Policy Studies

Related Issues: Health Care

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