PHYSICIANS/POLICY: Where’s the outrage? by Eric Novack

Eric Novack is a bitter, twisted physician (just kidding Eric!)in fact he’s outraged! Why? Apparently he wants to be paid on time and doesn’t want to work for free! Read on:

Where is the outrage? Where are the NY Times editorials? The ACLU? In fact, Novack_sm_1anyone?

On September 22nd, 2006, the government will officially stop sending Medicare payments to physicians. The government has stated categorically that CMS will not be responsible for late charges, interest, or other penalties that could accrue during the payment stoppage. How long will the refusal to pay last? To quote CMS, it will be ‘brief’. It will just last 9 days. Payments will resume on October 2nd, 2006. Read the CMS summary yourself

Why? How could this be? I thought Medicare is the ‘solution’ to our healthcare woes, it just needs some tinkering with more technology and ‘performance incentives’?

The reality is that the much esteemed Medicare system that many THCB aficionados want for everyone is flat broke already. Not in the next 50 years, not for the next generation. Now. In the same way that we think that we will just backdate that check to our landlord, in the same way we just miss one mortgage or car payment by a week or so to wait for the paycheck to register in our account, the government is passing the bill for this year’s Medicare program onto the next year (the beauty of the fiscal year…). Math time: 9/365=2.5% (or 0.0246 for the disbelievers among you) Total Medicare Part B gross estimate (very rough) of $150 billion x 2.5%=$3.75 Billion.

Quite a ‘late check’. Except that the government refuses to pay a late fee. The government says too bad. Perhaps next year the ‘no pay’ period will last 2 weeks? 4 weeks? Perhaps the government will decide to not pay to ‘catch up’ on late payments? It is not a question of if, rather a question of when. Quoting Benjamin Rush at the Constitutional Convention of 1787: “Unless we put medical freedom into the constitution the time will come when medicine will organize into an undercover dictatorship and force people who wish doctors and treatment of their own choice to submit to only what the dictating outfit offers.”

This is a time for courage. The courage of US physicians to remove themselves from the Medicare system as it stands and demand a system that respects the rights of not just the patients of America, but also the providers.

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8 replies »

  1. By US standards, I’m financially poor, yet I refuse welfare and the rest. I don’t need it, but others may. What I do resent is the government’s intrusion into healthcare making healthcare very expensive. Medicare is mandatory at a certain age for everyone, which means that we were paying for the late Aaron Spelling’s healthcare, and he was worth BILLION$. WHY?
    I grew up when doctors made house calls — house calls in the mornings & afternoons and office hours in the evenings — when my parents dealt directly with the doctor for meds and payments. No six degrees of separation. We had no health insurance, so we didn’t run to the doctor with every sniffle & scratch, which meant that we had to take care of ourselves. We also accepted that everyone dies from something eventually. A triple bypass on someone in their mid-80s would have been considered “frivolous” back then.
    I’m not advocating returning to that system, but our present system needs competition to help right some of the wrongs. Plus, people must rely upon themselves more for their own care. They must stop demanding cradle-to-grave care. The main purpose of the national government is to protect the people, not to pay for my bp meds.

  2. A solution is to break up Medicare and give elderly citizens vouchers towards the purchase of their own private healthcare. As an economist, I will always side with competition over government administration of markets, even in the case of healthcare.

    Hmmmm. If this is a solution, I want to see a clear statement of the problem.
    If there were any hope at all that the market for medical goods and services could approximate an ideally competitive market, I’d be right there with you. But for lots of structural reasons a PhD candidate in economics who studies healthcare should be able to enumerate while drunk, it can’t approximate an ideally competitive market. And so you are siding with (large) deadweight losses and economic surplus accruing primarily to manufacturers and providers. How is this good public policy? It is hardly welfare maximizing…

  3. This is bound to happen in a single-payer system (the U.S. more or less has a single payer system-Medicare-for the elderly). Because Medicare is a monopsony, most physicians have little choice than to accept Medicare’s terms. The government is supposed to enforce contracts, yet when the federal government is a party in the contract, one cannot expect it to adjudicate fairly.
    A solution is to break up Medicare and give elderly citizens vouchers towards the purchase of their own private healthcare. As an economist, I will always side with competition over government administration of markets, even in the case of healthcare.

  4. “Anything paid for by the government and run by the government will ultimately end in fraud, waste and abuse (ie Katrina, DHS, medicare/Medicaid, AHLTA, etc, etc). When will we learn.”
    Enron, Adelphia, MCI/WorldCom, HealthSouth, etc.,etc., etc. This country is approaching a Nigerian like culture where nothing works honestly. It’s how far can we push this scam.
    “The number of registered lobbyists in Washington has more than doubled since 2000 to more than 34,750 while the amount that lobbyists charge their new clients has increased by as much as 100 percent.”
    When a highly partisan party installs its hacks, friends and pay-back supporters into positions that they have no business running, with little oversight, then you get what we have now. Add to that all the bribe money handed out by all the lobbyists and that’s why nothing works. Money driven politics, welcome to the result.

  5. Perhaps if CMS took a leadership position on rethinking how we approach expensive and often futile end of life care, it might be able to not only afford to pay its bills on time but to raise reimbursement rates for currently underpaid procedures.
    Whether it’s QALY metrics, driving up the number of seniors who have executed living wills and advance directives or changing the law so that the default protocol could be redefined from do everything to apply common sense (intervention, hospice, palliation, etc.) depending on circumstances without having to worry about being sued, I think the leadership on this has to come from CMS. Of course, reducing utilization, no matter how it’s achieved means less revenue for doctors and hospitals. If the objective is to contain runaway costs while extending comprehensive care to the currently uninsured and underinsured, I wonder if doctors and hospitals would wind up being obstacles to reform rather than contributors.

  6. Many of my colleagues are on the verge of OPTING OUT of Medicare. The tipping point is near, but I don’t think this 9 day payment stoppage will do it though. What will lead to a mass specialist/surgeon exodus from medicare will be the shrinking reimbursements, especially for surgical care. $1800 for a cardiac bypass!!! Please.
    Anything paid for by the government and run by the government will ultimately end in fraud, waste and abuse (ie Katrina, DHS, medicare/Medicaid, AHLTA, etc, etc). When will we learn.

  7. Eric–welcome to the club. State Medicaid programs have been doing this to hospitals for decades to balance the budget. A few years ago, NH ceased Medicaid payments to hospitals in April, with a June 30 year-end. Nine days is not so tough…..I agree with the post above–the Medicare program is a shining star compared to the current Administration’s legacy-to-be.

  8. “Providers need to be aware of these payment delays, which are mandated by section 5203 of the Deficit Reduction Act (DRA) of 2006.”
    “Accelerated payments using normal procedures will be considered”
    The cost of Iraq is $300 Billion and counting(failure), cost of Katrina estimated about $7 Billion(failure), cost of abuse, fraud, waste of DHS in the billions (failure). When I applied for payment of my out-of-pocket expenses for cataract surgery it took BCNS 6 months to pay – no interest or reimbursement of collection costs.
    Get over it Eric and focus on what really needs to change.