President Obama and some members of Congress assert that, in cutting Medicare and Medicaid, they can whack health care providers while protecting beneficiaries. But experts say it is not so simple.
Experience, they say, shows that some cuts in payments to providers hurt beneficiaries, as more doctors refuse to take Medicaid patients or limit the number of new Medicare patients they will accept. Hospitals curtail services. Beneficiaries may have more difficulty getting therapy services after a stroke, traumatic brain injury or hip fracture.
By contrast, the experts say, other cuts force health care providers to become more efficient, saving money for beneficiaries, taxpayers and the government.
Marilyn Moon, a health economist and former trustee of the Medicare program, said that “you have to be vigilant” in cutting Medicare payments to health care providers because “there is no bright line” between cuts that affect beneficiaries and those that affect only providers.
The need to make such distinctions came into sharp focus this week as Mr. Obama and a bipartisan special Congressional committee intensified their search for ways to squeeze hundreds of billions of dollars out of federal health spending.
In his recommendations to Congress on Monday, Mr. Obama proposed cutting health spending by $320 billion over 10 years: $248 billion from the projected growth of Medicare and $72 billion from Medicaid and other programs.
The Congressional panel is expected to seek similar savings in health programs, or more, as it looks for ways to reduce federal budget deficits by a total of $1.5 trillion over 10 years.
Even some of Mr. Obama’s allies said his Medicaid proposals could harm beneficiaries.
“The Medicaid cuts in the president’s proposal shift the burden to states and ultimately onto the shoulders of seniors, people with disabilities and low-income families who depend on the program as their lifeline,” said Ronald F. Pollack, executive director of Families USA, a liberal-leaning consumer group.
Matt D. Salo, executive director of the National Association of Medicaid Directors, representing state officials, said, “You would have a hard time cutting significant amounts from Medicaid payments to states without hurting beneficiaries.”
States, experiencing severe fiscal problems in recent years, have reduced Medicaid payments to doctors, hospitals, nursing homes, pharmacies and other providers and have cut back services, including dental and vision care for adults.
Beneficiary advocates express fewer qualms about cutting federal payments to drug companies or insurance companies, which manage care for millions of people in Medicaid and Medicare.
John C. Rother, president of the National Coalition on Health Care, which represents consumers, employers and providers, said the new health care law “showed that it is possible to slow the growth of Medicare costs without hurting beneficiaries.” On the other hand, Mr. Rother said, “Medicaid shows that if you starve a program and provide inadequate reimbursement, access to doctors will be at risk.”
It is possible to save money and provide better care at the same time — for example, by reducing the number of patients readmitted to hospitals within a few weeks after they are discharged, Mr. Rother said.
Sometimes, cuts backfire. Medicare payments for home health care plummeted in the late 1990s, forcing many patients to spend more time in hospitals and nursing homes.
When Congress cut Medicare payments to private insurers as part of Mr. Obama’s health care overhaul last year, Republicans predicted that insurers would increase premiums or pull out of the program. But the administration said last week that premiums for the popular private plans would decline in 2012 while enrollment was expected to rise.
Doctors’ offices and hospitals say their finances are more precarious. Be “careful what you cut,” says an advertisement being run by teaching hospitals. “Reducing the deficit is important,” it says, but “cutting federal support for doctor training and medical research is a bad idea that would hurt everyone.”
The Medicare Payment Advisory Commission, an independent federal panel, has recommended increases of just 1 percent in Medicare payments to doctors and hospitals in 2012. It weighs many factors in deciding how much of an increase, if any, is needed.
For several years, the commission has said that hospitals under financial pressure — because of competition or other factors — tend to reduce their costs. And the lower costs, it says, allow efficient hospitals to make money on Medicare patients without compromising the quality of care.
In a recent report to Congress, the commission said that “profit margins on Medicare patients remain negative for 64 percent of hospitals.” But, it said, the supply of hospital beds appears to be adequate, and more hospitals are offering specialized services like robotic surgery and cardiac catheterization.
Likewise, the commission said that most Medicare beneficiaries had “good access to physician care,” but that some, including minorities, reported problems, particularly when they were looking for new doctors. Doctors and health policy experts said these problems could quickly increase if Medicare freezes or cuts payments to doctors as part of a deficit-reduction plan.
The jury is still out on a new system of competitive bidding that Medicare is using to buy home medical equipment like wheelchairs, walkers and oxygen tanks. The Obama administration says the lower payment rates have saved billions of dollars for taxpayers and beneficiaries. But suppliers say the changes have disrupted service to some beneficiaries.
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(Link last retrieved September 23, 2011)
