Help for the Docs. What About the Patients?

by Jonathan Cohn | October 16, 2009

Congress is about to write a very big check to America's doctors, apparently without blinking. It may or may not be the right thing to do--more on that in a second. But it does make you wonder why they find it so hard to write a very big check to make sure everybody can get affordable health insurance.

The issue here is what's known as the Sustainable Growth Rate, or SGR. Under the terms of a law passed in 1998, Medicare is supposed to keep its payments in doctors in line with the SGR. In years when physician payments are below the SGR, Medicare is supposed to start paying the doctors more; in years when physician payments are above the SGR, Medicare is supposed to pay them less.

Predictably, physician payments tend to end up on the high side. And, perhaps just as predictably, physicians aren't too keen on that. They complain and, for the last few years, Congress has responded by "postponing" the reduction. It's become an annual ritual of sorts, although it sometimes features high drama. Or high farce, depending upon your perspective.

Nobody thinks this is a good situation.

Among other things, imposing the now-steep cuts really could have some serious effects on physician income--and, as a likely result, access to medical care. That's why many experts think it's time to start over. As the argument goes, we should just admit that Congress will never let those past SGR adjustments take effect, effectively wipe the slate clean, and start over with some new system that tries to control spending on physicians in a less crude, more politically realistic way.

Ideally, it would be a method that actually pushes physician care in the direction of more quality. (Pay more for primary care and less for specialists, encourage the creation of integrated group practices, and so on.) That's very much what health care reform, in an ideal world, would do.

And that's more or less what's going to happen, from the looks of things. This week, Senator Debbie Stabenow introduced a proposal that would, in effect, eliminate the SGR. The Senate is supposed to take it up next week and, according to various sources, the measure should pass with bipartisan support. Surprised? Don't be. Doctors have lots of Republican friends, too.

The only catch here is that the official Congressional budget assumes the SGR is real and that it will take effect. Wipe it away, and you've blown a $240 billion hole in the budget.

Senate Democrats seem determined to pass it anyway, without offsetting savings or revenue. The House, meanwhile, has signaled its intent to do the same thing.. (Note that the administration, in its own budget, did assume SGR repeal and budgeted accorindgly, which is why its deficit figures seemed a bit higher.) I'll have more to say about this isue next week--including the very reasonable question, put forward by conservatives, of why we should believe any promises of future fiscal responsibility when Congress is so obviously unwillingly to let previously enacted spending cuts take effect.

But put that aside for the moment, and consider this. If Congress is so willing to spend an extra $240 billion helping doctors, without even paying for it, why is it so hard to find enough money to boost the subsidies and affordability protection in health care reform?

Keep in mind that adding even $100 billion to the Senate Finance bill, less than half being allotted for the "doc fix," would bring it line with the more generous House bill. And, unlike the SGR fix, there are no shortage of ideas on the table for offsetting the extra spending. Congress could bump up the excise tax on high-end insurance policies, adopt the income tax surcharge on millionaires that's now part of the House reform bills, impose a tax on sugary sodas, and on and on. (Come to think of it, Congress could just as easily use these to offset the SGR fix.)

Admittedly, the Democrats happen to have a clear political motive here. Passing the SGR fix is critical to keeping physician organizations on board with reform--something that matters even more now that the insurers seem to have declared war.

But the question still stands: If it's so easy to find money for doctors, why not for their patients, as well?

Note: I went back and thinned out the item a bit, just to make a bit less confusing.

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