No Time Like the Present
for Tackling Some
Hard Issues
Ronald Szabat, J.D., L.L.M., Director
Governmental and Legal Affairs
here is something in the air. Or is it in the water?
Either way, the seamless change to a second term for
President George W. Bush has occurred, and the new
faces and regrouped forces in the 109th Congress in
Washington are dead-set on re-examining many important
issues, some dormant for decades.
In a few cases, the status quo is a given, at least
for now. On many other issues important to all Americans,
and particularly those relating to so-called “entitlement
reform,” however, change is coming very soon.
The questions anesthesiologists and ASA need to ask
are: “How will physician-given medical care
be affected, and will we be ready?” Emphatically
the answer to the second question needs to be: “Of
course we will!”
It is that first question that will be harder to answer!
And everywhere there are storm clouds forming. So
there is soon to be something flowing forth upon us!
Among the obvious warning signs, there is bold language
emerging from sources as close and related but distinct
as the General Accounting Office (GAO), the Congressional
Budget Office (CBO) and MedPAC. The President’s
budget also is a sobering reminder that stringent
deficit reduction is coming even as America’s
need for governmental programs for the aged, disabled
and unhealthy continues to grow.
According to recent GAO pronouncements, “[a]bsent
reform, with the drug benefit in effect in 2006, [Medicare]
program spending growth will be unsustainable over
time — increasing from an estimated 3.4 percent
of GDP in 2006 to 7.7 percent by 2035, and to 13.8
percent by 2078.” With regard to Medicaid, the
GAO said that “the program accounts for more
than 20 percent of states’ total expenditures
and is projected to double in spending in a decade.”
In like manner, CBO’s recent “Budget Outlook”
said that “Medicare spending is expected to
grow to $766 billion annually by 2015,” and
this year, “the program is expected to rise
by 9 percent, of which 40 percent of this upswing
is attributed to legislated updates in hospital, physician,
home health and skilled nursing care. The 2003 updates
to the physician payment sustainable growth rate (SGR)
of 1.6 percent and 2004-05 updates of 1.5 percent
will result in cumulative spending of $20 billion
in excess of the SGR ceiling. Unless a physician payment
update is legislated this year for 2006 and beyond,
the SGR formula will automatically correct the $20
billion dollar excess by drastic reductions in physician
payments starting in 2006.”
And speaking of the SGR, which, as above, will act
automatically to cut all Medicare physicians starting
next year, the CBO speaks almost reverentially about
it in the same piece, noting that “the projected
acceleration of Medicare spending would be even more
dramatic were it not for [its] formula used to establish
a fee schedule for physicians’ services.”
Tough words, indeed, in a year when physicians are
rightfully asking for fairer rewards for treating
the nation’s disabled and increasingly elderly
population.
Even MedPAC, which has consistently advocated for
sensible Medicare physician updates and reform of
the SGR, is expected to indicate that its suggested
“tools” for Medicare reform cannot sufficiently
solve the budgetary dilemma worsened by the SGR.
None of the above is an accident or wholly unexpected.
In talking to and with physician audiences, our committees
and policy-making bodies, ASA and all of organized
medicine need to be aware of the bigger politic dynamic
that is starting to unfold and play out in Congress
and the states.
Put most simply and in response to what President
Bush has called an “ownership” society,
policymakers and legislators are starting to grapple
with what were long considered “sacred cows.”
Congressional Democrats, predictably, are generally
skeptical and very cautious to embrace any such changes,
despite calls in the last decade from New Democrats,
including former President Bill Clinton, for more
social and personal responsibility (although such
rhetoric did not generally go beyond Medicaid entitlement
program reform). Republicans, eager to hold on to
their majorities in both the House and Senate, are
mixing caution with support.
At the same time, with record deficits and red ink
actually hampering spending choices across all of
government and threatening overall economic growth,
Republican leaders are actively exploring whether
we, as a nation, can continue Medicare, Medicaid and
Social Security without fundamental changes.
In examining the battle over Social Security changes,
if in fact they occur, medicine would be wise to examine
the President’s broader vision and learn lessons
that will inevitably be applied to Medicare and beyond,
based on prior enactment of the Medicare Modernization
Act (MMA) in 2003.
In some respects, the foundation is already in place
as Medicare begins a transition to Medicare Advantage
plans in 2006; again, building on the framework enacted
in the MMA. As this process unfolds, along with further
cries for belt-tightening in all federal spending
in years to come, the best thinking of anesthesiology
and other physician groups will be indispensable.
Our own Task Force to Study Payment Methodology may
in fact find its work and conclusions at the center
of a larger pitched legislative battle in the near
future. We must be ready.
Such is the path ahead. Beware of the storm clouds.
return to top