At some point, reducing the rates Medicare pays to health care providers will reduce Medicare beneficiaries’ access to health care. Nobody denies that. But the fact of the matter is that Americans pay higher per unit costs for health care than do the citizens of basically every other country in the world. Consequently, I have to believe that it’s possible to reduce payments to health care providers (as will be done if the super committee “trigger” is pulled) without harming patients in a proportionate way.
Sarah Kliff has an item in which she rounds up some evidence that beneficiaries really will feel the pinch but a lot of it seems speculative and somewhat hazy to me. This, for example, is not a super-persuasive argument:
Medicare providers have repeatedly threatened to pull out of the program if they saw big rate cuts. According to a recent AMA study, 17 percent of doctors already say they restrict the number of Medicare patients largely because of the low reimbursement rates. The same study found that a big pay cut could see many pulling out of the program all together.
This reminds me that I sometimes wonder how different health care politics would look in the United States if the AMA renamed itself “the American Doctors’ Union, AFL-CIO” or some such. I mean of course the AMA says that if doctors get paid less the world will end. But will it? Medicare is able to get away with low payment rates because it has such a giant customer base. There are a lot of old people out there, and they consume a lot of health care services. It’s hard to make a living as a doctor without serving those clients. If the rates get cut further, surely some doctors will try to get along without them, but how many will really be able to do so?
The basic shape of the problem, however, is just a reminder that health care solutions ought to be systematic. If you cut Medicaid payment rates, providers will try to get by only seeing Medicare patients and patients with “private” health insurance. If you then try to cut Medicare rates too far, providers will try to get by only seeing patients with “private” health insurance. But even the “private” health insurance benefits from hefty government subsidies through the tax code and, in the future, through the health insurance exchanges. By moving toward all-payer rate setting we can cut excess expense while leaving providers with nowhere to run.