Behind Georgia Tuttle are 25 years of practicing medicine.
In front of her are career questions she never figured on asking.
"At 51, I feel that I'm in my prime," said Tuttle, a private practitioner in New Hampshire. "I could practice another 20 years. But now I'm looking at a new computer system for my office and wondering `Should I invest in that?' I love my Medicare patients, but I'm asking, `Should I keep taking Medicare patients?' "
Tuttle's fears are similar to those expressed by the American Medical Association about a federal plan to cut Medicare reimbursements to doctors by more than 4% in 2006 and by 26% through 2011. The cuts would come as expenses related to operating medical offices continue to rise, physicians say (See editorial, p. 30).
According to data from the Medical Group Management Association, 66% of income at the average physician practice today goes to overhead, including rent, liability insurance, office staff salaries and medical supplies and equipment. Roughly 34% of income goes to the physician's salary.
"As physicians' overhead costs increase by 15% (over the next five years), Medicare payments are scheduled to be cut by almost twice that," AMA President-elect J. Edward Hill said last week as the AMA kicked off a lobbying campaign to stop the planned reimbursement cuts. "This is unsustainable for a physician practice."
CMS Chief Actuary Richard Foster has said numerous times that the payment cuts aren't real, at least not yet. "In real life, I don't think that's going to happen," Foster told a recent forum on Medicare at the American Enterprise Institute. In fact, in the past two years, the AMA has succeeded in stopping similar cuts before they went into effect.
But the AMA isn't taking any chances.
During its National Advocacy Conference in March, the AMA had 600 physicians from around the country come to Capitol Hill to talk with lawmakers about reimbursement cuts and medical liability reform. More recently it has been urging doctors to lobby Congress to stop the pending reimbursement rate cuts. Members of the AMA are also asking their patients to get involved by writing and calling lawmakers.
Literature and posters are being distributed for placement in doctors' waiting rooms.
"We will be devoting substantial resources to lobbying, grassroots activities, media relations and advertising," an AMA spokeswoman said last week. "We will likely intensify our activities once we have a bill (reversing the cuts) introduced, which we are hoping will be soon."
To push its point, the AMA conducted a survey of its members in February and March, asking them what they planned to do if the payment cuts begin on Jan. 1, 2006. A total of 5,486 doctors responded to the survey, which showed that 57% would spend less time with Medicare patients (See chart). Nearly half said they would stop providing some services.
"More than one-third of physicians (38%) told us exactly what we feared, that they would be forced to decrease the number of new Medicare patients," Hill said.
Some argue that increasing Medicare reimbursements to physicians will result in higher premiums for the seniors who rely on the program. Premiums for Medicare Part B coverage are scheduled to increase to $89.20 next year, about a 34% increase from two years ago (April 4, p. 12). "Seniors cannot tolerate much more" in premium increases, said AARP Policy Director John Rother.
Medicare officials have said they too are concerned about growing costs. They blame an increase in patient office visits, along with more tests and minor procedures.
Doctors say they are being penalized for improving patient care.
"But don't take my word for it," Hill said. "Medicare's trustees said when releasing their report that one of the principal reasons that per-capita healthcare costs have gone up is that new medical treatment techniques improve the quality of or prolong life."
At a briefing last week, Hill said the vast majority of physician practices are small businesses that do not have the resources to absorb losses or steep payment cuts.
"I won't defend physicians' incomes; we make a good living," he said. "But we're talking about small businesses. There's a staff to take care of, facilities and equipment to update. All the money isn't going into the doctor's pocket."
Tuttle said many friends and colleagues have left or are planning to leave their practices.
"Some are going back to business school, others taking different careers," she said. "It's real. And what I fear, too, is that the bright kids who would normally be interested in a career in medicine are going to other fields because of what they see happening to us, the ones who are in medicine."
Even physicians who have given up private practice and have taken on jobs as employed physicians will feel the pinch of the cuts, Tuttle said. "If their employer isn't getting paid, then they won't get paid either."
Tuttle has met with members of Congress and has been on Capitol Hill "four or five times in the past couple of years," she said. "I think they hear what I'm saying, but there's a lot of passing the buck back and forth between CMS and Congress."