Are Doctors Better Off Without the SGR?

HealthLeaders Media Staff, July 23, 2009

The AMA's endorsement last week of the House healthcare reform bill caught some by surprise.

There were no significant caveats or conditional demands in the AMA's letters to the House committees behind the bill, despite grumblings earlier in the year about a public option. Although the country's largest physician organization has traditionally played a pivotal role in torpedoing healthcare reform, the AMA made it clear that history would not repeat itself in 2009.

Not all physicians are happy with the stance. About 17 state medial associations and specialty physician groups are drafting a dissenting letter that opposes the public option in principle and the House bill in its current form.

But there is a reason behind the AMA's acquiescence to reform: It provides an opportunity to once and for all break away from the Sustainable Growth Rate formula that keeps physician reimbursement depressed and annually on the verge of double-digit cuts.

Sure, the AMA also supports improving coverage, emphasizing wellness, and other tenets of reform. But it knows that if this effort fails, there may not be another chance to kill the SGR until 2013 at the earliest, and 2017 more likely.

As blogger Kevin Pho, MD, puts it in his own reluctant endorsement of the bill, "It's quite possible that preserving the status quo will be far worse for doctors going forward than the current proposals."

But will the new method of determining physician reimbursement levels really be better?

The Obama administration wants to create a five-member Independent Medicare Advisory Council, made up of physicians and health policy experts, that will make two annual reports dictating updated rates for Medicare providers, including physicians, hospitals, skilled nursing facilities, home health, and durable medical equipment.

Instead of making toothless recommendations that are ultimately approved or changed by Congress, as MedPAC currently does, the new council would actually have authority to enact changes, unless blocked by Congress or the White House within 30 days.

The goal is to separate politics and policy by putting reimbursement decisions in the hands of people who aren't subject to lobbying campaigns and worried about reelection. Lawmakers are often more interested in delivering more federal Medicare dollars to their districts than curbing the overall growth in spending, after all.

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