Recent Health Reform Meeting

Representatives from the AMA met recently during a health system reform at the White House and it included about 35 representatives from medical specialties and academic health centers. There was a strong voice that stressed the need to include antitrust relief and liability reform in the health system reform effort. Also discussed was the problem associated with the Medicare sustainable growth rate issue and it was urged that officials continue pursuing efforts to replace the flawed formula with a more coherent system that provides a stable funding base. If this flawed formula isn’t fixed, physicians will not be able to make the necessary investments in staff and health information technology needed to participate in quality improvement and value enhancement initiatives that are key to health system reform. The Impacts of Medicare physician payment cuts in Indiana are as follows:

• The Medicare Improvements for patients and Providers Act of 2008 (MIPPA) replaced scheduled double-digit Medicare cuts with a 1.1% increase for 2009. However, on January 1, 2010, Indiana physicians face an across-the-board cut of 21%, producing a loss of $290 million for the care of elderly and disabled patients. On average, each Indiana physician is facing a Medicare cut of $21,000 next year.
• This 21% cut will grow to about 40% in cumulative cuts by 2016 unless Congress acts soon to replace the flawed payment update formula and reform Medicare’s physician payment system. Otherwise, by 2016 the state’s physicians will lose $4.4 billion for the care of elderly and disabled patients.
• 64,908 employees, 865,792 Medicare patients and 90,439 TRICARE patients in Indiana will be affected by these cuts.
• Compared to the rest of the country, Indiana, at 14 percent, has an above-average proportion of Medicare patients and, at 15 practicing physicians per 1,000 beneficiaries, Indiana has a below-average ratio of physicians to Medicare beneficiaries, even before the cuts take effect.
• 41 percent of Indiana’s practicing physicians are over 50, an age at which surveys have shown many physicians consider reducing their patient care activities.
• MIPPA also extended a temporary increase in Medicare geographic adjustments for certain areas which will expire at the end of 2009. In 2010, therefore, Indiana physicians face cuts of an additional 0.8% on top of the 21% cuts across the country

Other issues raised during the discussion included the need to strengthen primary care, provide adequate financing for graduate medical education, develop Medicare payment alternatives and simplify administrative requirements.