The Good Old Days

Monday marks the day that Medicare payments to physicians are to be cut by approximately 21%.

With all this wrangling over health care reform, our Congress has, so far, refused to take action that might reduce or stop this fee reduction.  These payments to doctors have been scheduled to be reduced annually over the past several years, but Congress has always found a way to change the law that requires such reductions.  Now that ‘piper’ is about to be paid.

This is all about how our government makes promises and sets up far-reaching changes that will make it look as though the budgets are being reduced or at least kept in balance.  In the end, on this issue, those promised reductions in doctors’ fees paid were delayed and delayed and delayed.  Delayed until next Monday, apparently.

Debates can be had over whether the scheduled reductions were or are appropriate.  It seems that whenever we inject government into things such as this, we get unintended consequences.  The Medicare program is today what our private sector health care plans could be in the next decade, if the massive (and in my opinion ill-founded) health care reform effort is passed by the Democrat-controlled Congress as is now threatened.

Doctors have already made decisions to reduce the numbers of Medicare patients being seen since their costs of providing services are not covered by the reimbursements they receive.  This 21% reduction, if it is permitted to occur, will simply speed that process for seniors.

When doctors and other health care providers are under-paid for one segment of their business, they either get out of that business segment or they pass their unreimbursed costs on to the other segments of their business that are paying them sufficiently.  This is known as “cost shifting” and has been ongoing since government made itself a player in health care financing.  That is part of the reason for the high rate increases being experienced in private sector health care plans.  Insulation from knowing the real costs is another.

Over the course of time, demand outstrips the government’s ability to tax and pay, and we have the situation we now face with Medicare. 

We are, unless Congress suddenly comes to its senses, which is unlikely, about to embark on another such journey to financially precarious health delivery for all citizens, not just seniors, in the name of health care reform.

Over time, the end-result will be the same: reduced numbers of doctors, reduced levels of service, increased wait times for appointments and a generally degraded American health care system.  The private sector will have been largely driven from the health care arena since the return on its investment will not be sufficient to warrant being in that business. 

That, by the way, will impact both for-profit and not-for-profit organizations.  No matter the form of an organization, none can exist by spending more than it takes in, and then government has to become an even greater driver of health care.  Eventually, we will have gotten to the place that many progressives desire us to be today; we will have no private sector health care.

And…we will look back on the good old days!