For the elderly and disabled, catching up on the daily news during the latest Beltway brinkmanship—the deal to extend payroll tax cuts, unemployment benefits and current Medicare doctor fees—could be an exercise in frustration. Dodging persistent (and justified) rumors of forthcoming Medicare cutbacks, politicians and the medical lobby controlled coverage of 2012’s first serious budget debate, while the 47.5 million dependents of that program were left to eavesdrop from the wings.
Lack of press scrutiny during the scramble for a payroll tax compromise meant typical Medicare users learned nothing about billions of dollars in program reductions slipped into the package bill to pacify deficit hawks. The reductions offset the cost of shielding Medicare physicians from an automatic 27 percent pay cut this year—and they mean those doctors’ neediest patients could find it harder to get co-payment debts forgiven, or be treated at some hospitals.
The so-called “doc fix” to prop up Medicare fees is a ritual performed periodically by Congress to evade a cost-containment formula it passed in 1997. When doc fix renewal became entangled with the controversial payroll tax “holiday” last December, legislators put off a vote on the package until February. At that point, the Medicare angle dropped off the corporate media radar.
Coverage of Medicare’s budget struggles this year has been perfunctory and shallow. The Washington press corps all but overlooked a key January meeting (1/12/12) of the Medicare Payment Advisory Commission (MedPAC), at which commissioner Thomas M. Dean called the program’s financing “deeply flawed,” “poorly targeted” and “filled with perverse incentives.” When the deadline for renewing the doc fix neared, politicians debated tying financing reforms to the bill, but these often-technical discussions stayed behind closed doors.
As in previous Congressional sessions, reporters who examined the doc fix tended to limit themselves to the potential fee cut’s “disastrous” (L.A. Times, 12/14/11) impact on providers, not patients. Or, like NPR’s Julie Rover (2/16/12), and the Washington Post’s N.C. Aizenman (12/23/11), writers interviewed physicians—their confidence Aizenman described as “eroded” by “hair-raising” negotiations—who threaten to turn Medicare users away if the doc fix isn’t resolved permanently. “Disgruntled is probably just too soft of a term for this,” one told Rover. “It’s really devastating to try to run an office in this environment.”
Both Rover and Aizenman expressed some skepticism. As Aizenman noted, for “all the anxiety” over the plight of doctors, government numbers show no significant fall-off in Medicare acceptance. Indeed, the medical industry is unlikely to abandon roughly a fifth of its market. Although total U.S. doctor visits dropped during the recession (IMS Institute, 4/11), MedPAC (1/12/12) estimates the number covered by Medicare will grow 4 percent this year.
As soon as the doc fix made it to a vote, CNN (CNN.com, 2/16/12) repeated without comment the House leadership’s claim any cuts “would not affect patients.” Other media followed in the same vein. One daily, though, expressed surprise that a bill “heralded as a bipartisan nod to working families” (Boston Globe, 2/28/12) would also slash funds for local medical providers.
The “nod” to America’s families would cut close to $10 billion in Medicare funds for bad-debt forgiveness and lab tests, plus money for rural hospitals and those that treat large numbers of the poor. It also axes a third of a $15 billion preventative and community health program praised by Democrats as a singular achievement of the 2010 healthcare law (Senate Finance Committee press release, 2/16/12). The initiative is designed to help not only seniors with chronic illnesses, but the same struggling families targeted by the tax cut and unemployment extensions.
However, those families weren’t featured even in that front-page Globe story, titled “Tax Deal Reduces Funds for Hospitals.” The deal, wrote Tracy Jan, “has Massachusetts hospitals reeling over a little-noted section that will cost them tens of millions of dollars.” No word yet on how their patients feel.
Now that the doc fix is in, battle lines are shifting to budget cuts. Perhaps calls of “Medicare for all” from left-leaning pundits—as well as cries of “Medicare waste” on the right—inadvertently painted an all-too-rosy picture of those who already qualify: Fiscal pruners see them as low-hanging fruit this season. Not many in the press have questioned that assumption.
In his 2013 budget, Barack Obama has proposed a 26 percent funding hike for the Centers for Medicare & Medicaid Services. Almost all of the increase, however, would go to help states implement his 2010 healthcare act. Responsibility for Medicare would gradually shift toward beneficiaries. Obama wants to tack new co-pays, deductibles and premiums onto numerous benefits, such as visits to help the frail elderly remain at home. Commenting on the shift, a Washington Post blog (2/13/12) stated blandly: “Research suggests that the more individuals pay for health services out of pocket, the less likely they are to consume unnecessarily expensive care.”
In fact, a review of existing research on the effect of co-pays by Jonathan Gruber of the Massachusetts Institute of Technology (Kaiser Family Foundation, 10/06) concluded that raising so-called cost-sharing reduced use of low-cost but important preventative care, such as pap smears and immunizations. Most ominous for Medicare users, half of whom made less than $22,000 in 2010, Gruber found higher co-pays led to a “significantly higher risk of dying” and “a sizable increase in adverse events and emergency room utilization” among sicker and poorer patients.
Moreover, Medicare patients are already paying more out of pocket than workers with private insurance; one in four enrollees pays 30 percent or more of their income (Kaiser Fact Sheet, 9/11). Medicare users contribute at least 20 percent of outpatient bills alone, plus doctors are allowed to charge 15 percent more than Medicare’s fixed-rate ceiling for any procedure, effectively raising co-payments to 35 percent. And despite reforms still being phased in, this year Medicare will cover just 55 percent of mental health costs, leaving some patients bearing 70 percent of the load.
This is on top of charges for drug coverage, deductibles and monthly premiums ($100 to $320) based on income. In addition, Medicare does not cover dental care, most vision care and many preventive and long-term health services.
Some try to control out-of-pocket expenses by purchasing private “Medigap” policies. As Robert Pear pointed out in the New York Times (9/20/11), Obama actually plans to penalize those seniors with a roughly 30 percent hike in their Medicare premiums. (This method of reducing costs seems paradoxical if you consider—as the article did not—that Medigap and employer plans cover a quarter of the average Medicare user’s annual health expenses, helping reduce the government’s share to half.) Like the later Washington Post blog and an AP budget summary (2/13/12), Pear repeats the administration’s claim that, in essence, irresponsible consumers are inflating costs because they don’t pay enough for care. Once again, no specific supporting evidence is cited.
Granted, convoluted regulations don’t make snappy copy. But media shortchange the public if they fail to note the insulated position providers enjoy in a time of cutbacks. Patients can’t choose to pay less. Doctors can charge more than the Medicare scale or prescribe costly diagnostics. The American College of Physicians says doctors order perhaps $250 billion annually in unneeded tests (Reuters, 2/16/12), and fear of such bill-padding helped spur the original doc fix (New York Times, 2/22/12).
Covering the doc fix impasse in noteworthy detail (2/7/12), the Times’ Pear discovered another fee-raising tactic. During negotiations, Republicans attempted to bring Medicare reimbursements to outpatient hospital clinics in line with those for private practices. MedPAC has advised legislators that some higher hospital rates—80 percent more for an office visit, for example—are unjustified.
Now private doctors are signing contracts with hospitals, entitling the physicians to charge those higher prices, too, whether or not their offices are anywhere near a medical center. It’s a crisis for federal planners—and even patients are being hurt by ballooning co-pays and premiums, Pear acknowledged . . . in the last half of his final sentence.