Wondering why the AMA supports Obamacare? Here’s the answer.
After nearly a century of opposing health care reform of any kind, the American Medical Association has shocked the nation by coming out in support of the House health care reform package introduced last week.
You already know it must have something to do with money, but you may not know exactly how America’s docs will benefit under the proposed legislation.
The big win that brought the AMA to this historic moment is the proposed scrapping of an arcane piece of law entitled the Sustainable Growth Rate (SGR) Formula – the calculation that determines the rate of reimbursement physicians receive each year from Medicare.
The SGR was first put in place in 1997 as a means of lowering Medicare reimbursement rates to physicians until a sustainable level of payment could be reached. The thing is, the law has never really had much of an impact as physicians’ lobby groups have, year in and year out, managed to convince Congress to override the reductions.
However, with a reduction of 21% set to go into effect for calendar year 2010, to be followed by additional annual decreases of 6% for the two years following, the ability to avoid these earth shattering reductions was not something that could any longer be taken for granted by the AMA. After all, a 33% reduction in Medicare payments over three years is nothing to sneeze at.
The new House Bill solves that problem for the doctors by simply wiping the SGR off the books.
Not surprisingly, it is this very provision that has led some to question Obama’s commitment to reducing health costs while, for others, it is proving to be one of the few areas of bi-partisan agreement as Republicans have long stood up for the pain and suffering of AMA members.
We have yet to hear from the Senate Finance Committee, although they have previously indicated that while they may be prepared to bail out the doctors for the next few years, they are not necessarily ready to do away with the formula just yet. Speaking last month on the topic, Finance Committee Chairman Max Baucus said,
We’ll patch it up these first three years, but after that we’ll modify it and let some of the reduction in SGR match the curve, but then physicians will be compensated by the cost-sharing gains we’ll receive from some of these other reforms.
VIA MEDPAGE TODAY
Of course, that was before the AMA decided to come on-board.
There are some additional benefits contained in the House bill that sweeten the pot for the AMA while addressing a serious national issue – the growing shortage of primary care physicians. As some of you who read this post may know, I have long advocated for such an improvement. Primary care physicians, while the backbone of the medical system, have been on the decrease in every region of this country for many years. Because they don’t make anywhere near the money the medical specialists earn, medical students have been staying away from this area of the medical profession in droves. The result is a dangerous shortage that only inflicts more difficulty on those in the greatest need of assistance.
The House bill provides incentives that could truly help turn the situation around. Here are the key elements;
- Increased Medicare payments to primary care physicians by 5%
- An additional 5% pay boost for primary care doctors in designated “health shortage” areas
- A restructured formula for calculating Medicare reimbursements each year
- Enlargement of the National Health Service Corps by “an amount sufficient to eliminate 40% of the estimated shortfall in primary care providers”
- New scholarships for medical students who choose primary care as a specialty
While the physicians stand to benefit greatly from the rescission of the SGR formula, the public stands to benefit from these incentives designed to increase the ranks of primary care doctors.
We should not minimize this contribution and must hope that the incentives for the development of primary care physicians survive whatever final legislation may emerge. Further, we need to push state governments to do more to bring incentives to primary care physicians willing to make a commitment to practice in those states willing to offer them a hand.
Here in California, I have been advocating for a state tax benefit for primary care physicians willing to provide services to those who are going to be losing their safety net coverage in the current California financial crisis. But even that is not enough. The states must follow the lead and the example set by the House legislation and do their part to solve this very serious problem.
There will be debate over whether or not the ending of the SGR formula is too much of a price to pay to gain AMA support for health care reform. Personally, I don’t think so. Yet, however it comes out, we cannot allow the incentives proposed to grow the ranks of primary care physicians to be lost in the final legislation. It is far too important to our long-term health care needs.