Tuesday, November 2, 2010

SGR Cuts for Physicians

Unless Congress intervenes, cuts in December and January will lower the average Medicare physician reimbursement by about 30%. Primary care physicians will see a small increase.

Dropping Medicare rates down toward Medicaid rates will do severe damage to some practices. Given the fixed/variable cost structure of physician practices, short term the only practical cuts are in staffing (and that is tough) and physician incomes. Are some physicians gaming the system? Sure.

Conspiracy theorists believe the administration wants to destroy most private practices and drive docs into hospital employment relationships. This could have some benefits, but could also do severe damage to quantity and quality of care, not to mention many hospitals do a lousy job of managing physician practices. This sort of integration can be done fast or right, but not fast and right.

Yes, we need health care reform. Fast and stupid is not the reform we need.

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