After 18 years, bipartisan bill may finally address Medicare flaw and stop absurdity of 'doc fix'
by Brad Holland
March 22, 2015
Source: The Waco Tribune-Herald
Conservatives should rejoice! One of the most broken parts of our federal government could actually be fixed, with news last week of a bipartisan plan in Washington to repeal Medicare’s Sustainable Growth Rate (SGR) formula.
Congress enacted the SGR 18 years ago to control Medicare costs, but it hasn’t worked. The only thing it has done is threaten physicians year after year with huge Medicare cuts — and force Congress to spend time sloppily creating short-term patches to delay those cuts. This epitomizes the proverbial “kicking the can down the road,” which our government does all too often.
I can tell you from experience, physicians are tired of this never-ending uncertainty, the never-ending threats, the never-ending need to lobby Congress on the same, never-ending problem. Our patients are tired of the never-ending fear of losing their doctor. We’ve endured 18 years and 17 patches. Enough is enough. SGR needs to be repealed.
If history is any guide, the current threatened Medicare cut — 22.4 percent due to take effect April 1 — won’t take effect if Congress puts yet another last-minute patch or “doc fix” on it. Central Texas physicians are hopeful that this time, with a good plan in place, Congress will finally act to repeal the SGR.
Unfortunately, there is opposition from “faux fiscal hawks” (as the Wall Street Journal calls them), who are threatening to scuttle the deal because they don’t like the budget numbers behind it. Let me summarize recent editorials in the Journal and Forbes, and from Americans for Tax Reform, the American Action Forum and the National Center for Policy Analysis with five solid reasons real conservatives should embrace this plan and lobby hard for its passage:
The SGR is a failed attempt at government price control: The SGR has never held down the cost of providing health care to military families and patients on Medicare. Government-imposed price controls don’t work. As conservatives know, price controls distort the free market; in this case they’ve simply forced physicians to find creative ways to bill Medicare for the services our patients need.
The “cost” of repealing the SGR is fake: As Americans for Tax Reform reminds us, “Congress has delayed the onset of SGR 17 times over more than a decade. It is blindingly obvious … that Congress will continue to not impose SGR cuts. To pretend that it will, and then demand spending cuts to ‘pay for’ repealing it, is cognitive dissonance of the highest order.”
The SGR hides the true cost of Medicare: Pretending that the SGR will someday take effect and someday hold down Medicare spending in the future makes Medicare look much stronger than it actually is. “That allowed for the Obama administration and allies on Capitol Hill to justify the creation of Obamacare (paid for in large part by Medicare cuts, incidentally) because of this rosy long-term cost scenario for government in general,” said Americans for Tax Reform.
The SGR repeal bill makes important and significant changes in Medicare financing: The package does more than eliminate the SGR; it profoundly reforms how Medicare pays physicians for health care services. The Journal describes it as a way to “reward doctors for providing more valuable care, rather than cutting the same fee-for-service check regardless of performance.” That will keep taxpayers healthier in more ways than one. Secondly, the plan pays for some of the cost of repealing the SGR with changes in Medicare premiums and Medigap coverage for the wealthiest retirees.
“Because these policies are phased in, they don’t affect Medicare much in the first 10 years,” said Douglas Holtz-Eakin, president of the American Action Forum and budget director under President George W. Bush. “But the savings will continue to rise, grow faster than physician reimbursements and on balance lower projected Medicare spending…by $230 billion over the second 10 years, 2026-2035.”
The SGR stands in the way of real health care reforms: The constant patches and negotiations over the “doc fix” bills distract Congress from the significant structural reforms conservatives want. “If you’re a conservative interested in repealing Obamacare, reforming Medicare or block granting Medicaid to the states, removing the SGR kabuki theater from the congressional agenda is absolutely essential,” says Americans for Tax Reform
As the Journal editorialized, “Congress is close to repealing a two-decade budget cheat and reforming the entitlement state for the first time in the Obama presidency.”
Conservatives should support Medicare reform to put another fiscal dagger in Obamacare and its faulty math.
Dr. Brad Holland is an otolaryngologist who practices in Waco and a Republican activist.