Doc Fix Deal

The Senate is apparently nearing a year long update of the SGR payment formula for how Part B of Medicare pays physicians (aka doc fix). I haven't read the text of the deal and don't exactly understand the pay for as it is described. The article linked says that around $19 Billion will be gotten from a tweak in the formula that determines how subsidy people will get to purchase health insurance beginning in 2014 in the exchanges. More specifically, it seems to be linked to how consumers would pay back subsidies if their income rises during the year in which they received a subsidy. This would effect people who got bonuses that push them out of eligibility or who were unemployed for part of a year but then got a job. Bottom line, it is some sort of reduction in the subsidy available to persons with incomes between 133% and 400% of poverty in 2014 to purchase insurance, but the details are sketchy. A few thoughts about this:

• The ongoing saga of the 'will the cut take place' while everyone knows it won't is a bit tiresome. The Congress really needs to develop a new policy and move away from these short term fixes.
• This is a one year fix, which is longer than any fix in the past couple of years. Maybe this will give them some space and time to develop a better long range policy.
  
• In developing a new Medicare physician payment policy, it is easier to figure out what is wrong (a fee for service based system that incentivizes doing more and not paying for quality) than it is to figure out how to transition to a better payment policy.
• Improving physician payment policy is made all the harder by the 'repeal' mantra that continues, has now morphed into the 'death by a thousand cuts' approach to hamstringing reform. The Republicans have little incentive to work constructively toward a revised payment approach because that would seem like momentum toward transitioning the health care system toward a better place.
  
• At the same time, lets say the Affordable Care Act were repealed--then you just lost your pay for that delays the SGR cut.
• Working out a reasonable and sustainable revision to how Medicare pays physicians needs to be a chief goal of the next Congress and the Administration. Think of it as a down payment on proving that we have some hope of implementing health reform, or any other imaginable health reform.
  
• In addition to addressing Medicare physician payment policy, we have got to also begin to address cost inflation in the private insurance sector as well as in Medicare. If the pay rates in Medicare diverge too widely from private insurance, it will cause access problems for Medicare beneficiaries....not what the baby boomers who are getting ready to move into eligibility have dreamed about.
• More and more I think Joe Newhouse (here via Austin Frakt) is correct that the only way to address cost inflation while maintaining access is all payer rate setting. Perhaps at some point in the past this wasn't true, but now I am not so sure there is another way....