'Antibiotics' needed to cure Sustainable Growth Rate infection
The original intent of the Sustainable Growth Rate was noble, says a newly released white paper by MedeAnalytics, but the SGR problem has become infected and needs a cure.
“This issue will not go away until we deal with it,” says the white paper’s author, Ken Perez, MedeAnalytics’ healthcare policy team director and senior vice president of marketing. “It’s kind of like an infection that has to be dealt with with antibiotics.”
Over the last nine years, Congress has passed overrides when faced with reductions to physician fees. Last spring, 51 medical associations called on Congress to fix the SGR.
[See also: House committee asks doctors for ideas on fixing SGR.]
But fixing the SGR problem won’t be easy and with the focus on the nation’s debt, has only gotten knottier, says Perez. “No one looked at the (Congressional Budget Office) forecast like they do now,” he said, but now with the CBO’s budget forecasting hinging on the SGR, organizations like credit ratings agencies and investment firms are taking note. What happens with the SGR has the potential to affect the country’s credit ratings, Perez says. “We are under scrutiny, we as a country, are under scrutiny by the credit ratings agencies, who are looking at the 10-year forecasts of government revenue versus government expense.”
[See also: CBO budget offers hope qualified by big ifs.]
“Relative to the CBO baseline, which is current law baseline, we need to understand these issues beyond whether they’re right or wrong or pro-physician or anti-physician, but really in terms in how they play in the broader calculus of deficit reduction,” Perez says. “That’s a really important concept for healthcare to understand. It gets lost in the discussion. People talk about cutting Medicare, not cutting Medicare. This is a different kind of issue.”
Perez’s white paper explores three possible scenarios for handling the SGR problem: do nothing, institute another temporary fix and reform or replace the SGR.
If nothing is done, the scheduled 29.5 percent payment reduction to physicians will take effect on Jan. 1, 2012. Physicians’ organizations have said that reduction, in addition to other cuts possibly coming out of the Budget Control Act of 2011, will force doctors to close their practices or limit the number of Medicare patients they see, things that are already happening.
[See also: Desperate measures: Frustrated physicians leave Medicare.]
A reformation or replacement of the SGR could cost about $300 billion. In this budget-conscious time, even though the government is talking in trillions most of the time, “billions are still billions,” says Perez.
The most likely thing to happen, says Perez, is another override, partly because that’s how it has been handled so far and partly because of the current political climate, but another override only makes the problem bigger down the road.
“If we run away from it, if we sweep it under the rug, we’ll basically have the spectre of bigger problems and bigger cuts down the road,” he says. “That makes it tougher for the next president, whoever that may be, and that fact will never escape the credit ratings agencies purview. They know now. They know really well what’s going on in the budget. You can’t hide a $300 billion problem.”
Follow HFN associate editor Stephanie Bouchard on Twitter @SBouchardHFN.
