Here we go again. Washington policymakers are gearing up once more to squeeze physicians and other healthcare providers in the name of greater patient choice. Meanwhile, they are failing to address fundamental issues of solvency and fairness in Medicare.
Medicare risk plans were created with sound intentions -- to provide more options in health coverage for seniors. But congressional leaders also have used the so-called expansion of choice as a way to drive down costs, slashing more than $120 billion in Medicare spending over five years -- $22.5 billion from Medicare HMOs -- under the Balanced Budget Act of 1997.
The paltry 2% reimbursement rate increases they received last year led some 100 health plans to scale back or eliminate their Medicare risk products. As a result, nearly half a million seniors were forced to switch coverage, sometimes to less generous fee-for-service plans.
And the future doesn't look much better, especially with Republican members of Congress intent on renewing efforts to push for a tax cut. Next month, when HCFA issues capitation rates for 2000, another round of skimpy rate hikes is expected, which likely will lead more HMOs to exit Medicare.
The Clinton administration is calling for an additional $11 billion in cuts to Medicare HMOs over five years.
Now Medicare choice problems may be compounded by early deliberations of the National Bipartisan Commission on the Future of Medicare. The commission was established because unless changes are made, the Medicare Hospital Insurance Trust Fund is expected to go bankrupt sometime around 2010. At about the same time, 77 billion baby boomers will begin entering the Medicare program, significantly increasing the demand for services.
So why were commission members last month considering what could amount to a $20 billion expansion in Medicare prescription drug coverage? The expansion would amount to a huge congressional give-away without tackling the question of how to pay for what beneficiaries already receive. No wonder physicians are annoyed, the public is confused, and managed-care companies are voting with their feet.
Congressional leaders need to commit to revamping Medicare's reimbursement methodology and addressing the program's overall funding woes. Physician executives know expanding Medicare choice and services without assuring program solvency and fairness will only aggravate the difficulties now faced by organizations trying to serve seniors in need of medical care.