Medicare cuts—a bad thing

Look, I know no one is weeping for doctors and their complaints about payment cuts, but you should at least be concerned, and here’s why.

Some doctors are rich…very rich. Most are not. Medical education is largely financed with debt, and primary care doesn’t pay all that much. Small practices work on narrow margins, and often run “paycheck to paycheck”. For internists, a large percentage of payments come from Medicare, the national health insurance program that covers seniors. Doctors participate with Medicare voluntarily—there is no law requiring us to see Medicare patients or to bill Medicare for them.

Of course there are advantages to being a Medicare provider—in general, they pay fairly quickly; it’s easy for patients; if you are a provider, more Medicare patients are willing to see you. But there are disadvantages as well. If you accept Medicare insurance, you must follow a large set of rules, and agree to price controls. Also, you must deal with arbitrary events, such as Medicare deciding not to pay for a few weeks in order to collect interest.

Currently, a 10 percent cut in Medicare physicians fees is due to go into effect. For example, if I normally get $60.00 for seeing a patient with diabetes, hypertension, and coronary artery disease, now I will get $54.00. This ads up quickly, and makes it difficult to pay the bills.

Every time one of these cuts is supposed to go into effect, Congress reverses it. This has to due with a very long story about how reimbursement is calculated. This time, Congress is still working on it, which leaves doctors in limbo. Medicare has sent us a letter that says that they will hold off on processing payments for ten days to allow the situation to stabilize. This means an effective ten day moritorium on payments. Oddly enough, Medicare says that there will be no problem since it takes 14 days to process a claim anyway, but the idea that a ten day hold on payments won’t affect doctors is either wishful thinking or a lie.

One solution many doctors are considering is dropping Medicare. This means that they can charge what they want, make their own rules, and not be subject to the whims of CMS. Of course, they will probably lose a few patients, but they will probably survive.

But what will happen to seniors if doctors get fed up en masse and Medicare providers become few and far between?


  1. Chuck

    What will happen when Universal Healthcare works the same way as Medicare?

  2. As a physician I have been frustrated by the lack of unity in our profession. I see so many of my colleagues competing against each other without an eye on the bigger picture, which is the struggle with payors (gov’t and private insurance) for quality care and fair reimbursement. My specialty (Anesthesiology) has responded in certain parts of the country by banding together formerly independent groups in order to have more power in regional areas. In light of the furthrr gov’t involvement we will see in the future, I hope that all of us in medicine can let our independent minds see the big advantages of greater unification.

  3. PalMD

    Good question, Chuck, and that is what many of my colleagues are worried about.

    I’ve always been a supporter of single-payor health care, but with certain qualifications, such as subsidies/loan forgiveness for medical education.

  4. Chuck

    Government financed education to work at a government financed healthcare facility to dispense government financed medical procedures and government financed medications.

    Thank you comrade!

    До свидания!

  5. LanceR

    Oh noes! Teh Socialism!!1!ONE!

    Runz Away!

  6. Medical education is largely financed with debt …

    I always figured that if I went for an M.D. I would have done it in conjunction with a “loan forgiveness” program. So I spend several years working for the Navy, or in a impoverished part of the country … at least I don’t have any loans to pay back.

  7. Yep, communist countries like Canada, Japan and Germany all suffer through commie medicine. Those poor bastards. /sarcasm

  8. Luna_the_cat

    You forgot the UK. Having experienced -first-hand- the medical system of both the US and the UK, and having close relatives still using healthcare on both sides of the pond, I will say with complete conviction that although it has its problems, the UK’s NHS is considerably less broken, and although you can’t get care as good as in the US if you happen to be rich, you get better care over here if you happen to be a working class schmuck.

    And, no, I don’t actually pay more taxes over here. I keep track of that. I just have a few big taxes, you have a lot of little ones, but your lots of little ones stack up higher — and then you all have insurance on top of that.

  9. Chuck, pay attention to Brad:

    banding together formerly independent groups in order to have more power

    Whether you like it or not, socialism’s already on the march. The government can head it off by introducing sensible reforms like single payor, or you can get it after a couple of decades of labour unrest. Whatever.

  10. Chuck

    By all means, go to Germany for good healthcare. They have hit a six year low for unemployment of 9.2%. The cost of a German worker is multiple times that of other Euro countries.

  11. Chuck, bio grad school is paid for by the government, and then we get government jobs at government institutions and win government grants to do government research. I think that system is working out well.

    Im totally cool with the government paying for med school too, as long as MDs are cool with getting paid like PhDs 😉

  12. Chuck

    “The government can head it off by introducing sensible reforms like single payor, or you can get it after a couple of decades of labour unrest.”

    Government reforms into socialism, not away from it.

    How many decades of labor unrest due to medical insurance have we already endured without civil uprisings?

  13. PalMD

    Actually, we already have “socialized” medicine for a huge and growing percentage of our population…it’s called Medicare, and aside from some problems like the above, it’s worked pretty well.

  14. Chuck

    How much more growth in the Medicare/Medicaid/SSI population can the working population support without making these huge and growing problems worse?

  15. gwangung

    How much more growth in the Medicare/Medicaid/SSI population can the working population support without making these huge and growing problems worse?

    If done well, much more than you think.

    If done poorly, not too much.

    Lapsing into binary thinking is rather useless. I’m more impressed looking at real world examples. Those rampaging socialists of South Korea, Japan and Taiwan changed to a more socialistic model, and I would say they have something we could learn from.

  16. Chuck’s Objectivist Health Care System Payment Terms:

    Payments for all services must be made in advance. No payment no service.

    *Cash paid for organs. (See nurse at service entrance.)

  17. How much more growth in the Medicare/Medicaid/SSI population can the working population support without making these huge and growing problems worse?

    Easy: By ensuring all people are paying for the combined cost of healthcare, you ensure that people aren’t getting double-billed for Medicare/Medicaid/SSI as well as their own healthcare costs. You pay into the system now, and it’s there when you need it. You know, as opposed to paying into two seperate systems, then paying your co-pay (Or the entire bill if you’re between insured jobs, or the insurance company decides you don’t qualify)

    You also cut the waste of the for-profit insurance companies and the cost of recouperating unpaid funds due to bankruptcy.

  18. LanceR

    But, But, teh Socialists! They’ll do… um… BAD TINGS to us!!eleven!!


    It may come as a huge shock to Chuck, but we have lived in a socialist democracy since the early 20th century. If one actually reads the writings of our founding fathers, they envisioned a much more socialist nation than we have.

    We have done things the libertarian way. We have allowed the “free market” to run it’s course. We got the robber barons and company towns. We got Pinkertons and the army used to “settle” labor strikes with guns. Been there, done that, got the bleeding head wounds to prove it. The “New Deal” might have worked, if the libertarians and republicans hadn’t sabotaged it every single step of the way. The “Great Society” might have worked, but the same things happened.

    Socialism is not a scary thought. The alternative is anarchy or feudalism. That’s really what “free-market” types want… feudal city-states where they run everything and the peons slave for a pittance.

    Sorry, Charlie, but I ain’t willing to go back to that. Joe Hill did NOT die in vain.

  19. Chuck

    If one reads Carl Marx he more envisioned a government slowly usurping the rights, privileges, and property of it’s citizens to reach a sustainable Socialist state. So glad to see everyone applauding as your government takes away everything that you deem to be unimportant.

    К чёрту
    Он мне не очень нравится
    До свидания

  20. Chuck

    “Payments for all services must be made in advance. No payment no service. *Cash paid for organs. (See nurse at service entrance.)”

    Is that the Chinese or Russian medical plan? DO I pay in Yen, Ruble, or Euro?

  21. Chuck

    Yes, I made a typo. Karl not Carl. Going from crylic to english isn’t easy if you are out of practice.

  22. Chuck

    Joe Hill died the death that he deserved. I made dam good money walking through picket lines during strikes as a scab. Management brought in food and we made twice what the union guys would have made.

  23. Matthew L.

    Worth pointing out that a direct comparison of USA and Germany unemployment statistics is useless, because we count jobs differently.

    The article also misleads readers on the extent of Germany’s unemployment rate. It reports that the rate has fallen to 9 percent, implying Germany still has very high unemployment. In fact, this is the official German measure of unemployment, which counts part-time workers as being unemployed. The OECD measure for German unemployment (which uses essentially the same methodology as the U.S.) is 6.4 percent. Since unemployment is still concentrated in the areas that were formerly East Germany, the unemployment rate in the areas that were formerly West Germany would be approximately the same as in the United States.

  24. Randy

    There are two problems (at least!) with the US health coverage, one simple to solve and the other more complex. The simple problem is lack of universal health coverage. That could be solved overnight with any of a variety of solutions; perhaps a mixture of public and private insurance, or perhaps just a single universal public system. It’s astonishing that we don’t have it yet in the US. My thoughts are that Americans simply don’t realize how effective other health systems are. This country and its citizens also accept levels of inequality that would be unacceptable in most other developed countries, but that is another issue.

    The complex problem is that health costs in the US are much higher than other countries. If we had universal coverage, they would be even higher. It will be very difficult to get these costs under control. Our reimbursement system favors expensive interventions rather than cheaper alternatives, our patients demand levels of care that are very expensive (e.g. new technologies of questionable value, fancy hospitals that are more like luxury hotels), the atmosphere is litigious, pharmaceutical companies make large profits, etc.

    One very basic problem is the way most doctors are reimbursed: fee for service. It may seem logical that you should make more if you see more patients, but that system is an absolute disincentive to control costs. There is an arms race on reimbursements between doctors and insurance companies: the doctors come up with new ways to maximize reimbursement and the insurance companies (including Medicare) work to add new limitations to those reimbursements. I personally work in an environment where I have a fixed salary and make the same no matter how many patients I take to the OR. In my mind, that type of reimbursement is more amenable to cost control.

    My gut feeling is that if are to get health care costs under control, all of us that provide health care (MDs, drug companies, equipment manufacturers) are going to see a reduction in our incomes. The Medicare cuts are part of that. My major concern is that the cuts do not come in such a way to accentuate the factors that have led to high costs in the first place.

  25. gwangung

    Is that the Chinese or Russian medical plan?

    No, the Troll plan.

  26. Luna_the_cat

    So, Chuck, you now firmly establish yourself as someone who really does care only about himself, and actively undercuts the ability of workers to work to improve their conditions. You really are scum.

  27. Michelle Schatzman

    I’m having fun today when reading your posts. I thought that this blog was the home of staunch scientifically minded rationalists. But some of you people are really telling fairy tales!

    One of the main problems of health care is that medical care is not exactly like any other service for sale. You can have one hairdo a day, even a very complicated one, without adverse effects, but I guess that you can’t have one surgery a day, even a very simple and small one… 😉

    On to more serious discussion : being french and living in a country with a partly socialized medical system, and having also lived for extended periods in the United States, I feel that each system has good and bad points. This is not a black-and-white debate.

    A very surprising observation in the US, is that the price of medicine varies according to who buys them. I remember buying in MYC, in spring 2003, prescription antibiotics, some good old augmentin, if I remember correctly. The price per pill was above $60. In France, right now, I can get 6 grams of augmentin for 7.80 euros. Right now, the euro is very high with respect to the dollar, but it was about the same value as the dollar back in 2003.

    And now, I understand that the insurance companies negotiate the price of medicine with pharmaceutical companies, and had I been insured in NYC, the insurance would have paid much less than the above ridiculous price.

    Hence, I believe that the US healthcare situation is *not* a free market situation, and very far from it. The presence of large insurers deforms the situation into something else. More like a club where you need some kind of member card to join the fun.

    The main justification for free markets and the libertarian position is that it gives more chances to John Doe, because it removes barriers to access. Right now, this is just not true in the US. For instance, it blows my mind that no company is able to offer low grade insurance to the millions of uninsured people in the US. Say, pay for preventive care, and curative care only to people who agreed to preventive measures listed in the contract. Just off my mind, I am no expert in this area.

    I plainly know the faults of the french system, which is far from being egalitarian, but also has its very good sides. And so as to drown some fantasies, I state that my big bad cancer is taken care of by private doctors, in private hospitals. I pay the part of their fees that is above the ceiling defined by the public insurance company. I do not pay my medicines (if I did, I would probably have to empty my savings and then sell my apartment, since they cost more than my income). When I am hospitalized, I pay 15 euros a day for upkeep.

    I love this blog and this debate!

  28. Anonymous

    It figures that you would have to stoop to the Troll plan gwangung.

  29. Chuck

    No Luna,

    I only actively undercut the ability of workers who are lazy and unproductive and want an easy guaranteed paycheck that is inequitable to the actual work they perform. Anyone who supports this type of worker is the real scum of the Earth. I applaud and encourage workers who strive and achieve being more productive in their jobs, even union members.

  30. Oldfart

    A scab is a scab by any other name, Chuck. And you are a scab on humanity.

  31. Chuck

    I will fully defer to PAL for any medical corrections to my following statements.

    If a wound does not scab over, you may bleed to death.

    The unions create self-inflicted wounds that I help correct.

  32. LanceR

    Shorter Chuck: “I got mine, screw everyone else.”

    Typical libertarian a$$hole.

  33. Chuck

    If you Lance a boil, wouldn’t a shorter Lance be a prick?

  34. LanceR

    Is that really all you’ve got? (Half) Witty word play based on my name?

    “Free market” societies invariably devolve into feudal states. The richest members of the society take all they can grab, the mass of people get screwed, and a few lucky ones say “I’ve got mine, screw you.”

    Discussion? Argument? Or just more ignorant rambling?

    (Sigh) Trolls. They just ain’t what they used to be.

  35. Chuck

    It takes a good troll to judge other trolls. Continue with your ramblings.

    There is no way a Socialist government can be maintained long term because there is no way to value anything and no way to determine proper utilization of resources. Medicare is a PRIME example of that.

  36. Ray C.

    “Chuck”, in the “libertarian” utopia that you would have us all live in, you are unlikely to be one of the feudal lords. You’re much more likely to be one of those who dig coal all day in return for scrip that can only be spent in the company stores, and get cast off without a dime to their names when they get black lung disease.

  37. Chuck

    I don’t where all of these “libertarian” viewpoints are coming from because I’ve never claimed to be “libertarian” and all of these viewpoints about it are crap. IWW supporters are Socialist libertarians. Ray, if you are a feudal lord in the Socialist world you would probably also be a feudal lord in the “libertarian” or the “Capitalist” world as well. So enjoy being cast off from whatever world you live in.

  38. LanceR

    Chuck, Umm… reading for comprehension? You’re doing it wrong.

  39. Chuck


    Maybe you don’t understand what you have written. I understand what I have written. I have written about the problems of Socialism. You have voiced you opinions about everything else.

  40. Chuck

    Look Lance,

    If all you are going to do is Ad Hominem attacks because there is nothing constructive to add to you discussions, let me know now.

  41. Ughh, Chuck is such a troll and he doesn’t even know it. Stop feeding him guys.

  42. Michelle Schatzman

    Can we go back to my observation that medicines in the USA are prices according to who buys them? Indeed, their price depends on whether you are insured or not, and probably also on which insurance you got. Similarly, the price of surgery seems also to depend on the kind of insurance you got.

    How is this as a market situation ? How does this qualify in terms of elevating the barriers to access for those who are not players, because they are not insured?

  43. Ray C.

    I don’t where all of these “libertarian” viewpoints are coming from because I’ve never claimed to be “libertarian” and all of these viewpoints about it are crap.

    If it looks like a duck, walks like a duck, and quacks like a duck, chances are it’s a duck.

    IWW supporters are Socialist libertarians.

    Umm…who mentioned the Wobblies?

    Ray, if you are a feudal lord in the Socialist world you would probably also be a feudal lord in the “libertarian” or the “Capitalist” world as well. So enjoy being cast off from whatever world you live in.

    WHOOSH! goes the point over Chuck’s empty head.

    We tried things your way, around 1890 or so. It was a great time to be alive if your name was Vanderbilt or Rockefeller. For the rest of us, not so much. All the things you term “Socialism” are what has wrested a bit of breathing room for people named Smith or Rodriguez.

  44. Chuck

    “chances are it’s a duck”

    Chances are what you take in Vegas. Sorry, you just rolled craps and lost.

    “Umm…who mentioned the Wobblies?”
    LanceR in reference to Socialism.

    Lets get back on track with Medicare Cuts:

    The current Democratically controlled congress just hit a historic low in approval ratings of 9% according to a recent Rassmusen poll. Given some of the gross incompentencies in Medicare

    Do you think it is likely that congress is capable of doing the right thing and are you naive enough to believe that they will do it?

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