The President’s Health Care Proposal: Trying To Get Blood From A Stone

by Dr. Elaina George

If the goal of the President’s proposal was to drive doctors into hospital based practices or community health centers, or if it was to break the spirit of providers and bend them to the will of the government that holds the threat of criminal prosecution over their heads if they are found to be Medicare cheats, or if the goal was to dumb down the practice of medicine by ramping up the power of the HHS secretary and the evidence-based medicine posse, then the President’s proposal for health care reform was successful.

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However, we as physicians are individuals. There are approximately 890,000 doctors currently practicing in the US. Those of us who want the autonomy to practice medicine the way we were trained, those of us who run a private practice who are entrepreneurs at heart, those who are tired of being pitted against our patients and other physicians (the specialist vs. primary care physician meme), and those who are just sick and tired are NOT going to take this. Those of us who can will retire or leave medicine all together. Those within the system will simply opt out.

The President’s summit on Thursday amounts to nothing more than six hours of theater. Not one physician in Congress has been invited to attend. The physicians for single payer have also not been invited. It is his chance to hear from the people on the front line, and it is obvious this bill is NOT about the health of our people. It is about raising revenue, controlling the medical industrial complex completely. How else can you explain the proposal for the government to a) take over control of the cost of insurance premiums; b) limit provider medical decisions based on cost, and c) control what is medically covered for the patient. Under the proposed health care reformed, the government will control how much an insurance company can charge, decide what is covered medically, and sanction the provider for deviating from the norm.

These are some of the proposal highlights that concerned me the most:

Delay and Reform the High-Cost Plan Excise Tax.

Part of the reason for high and rising insurance costs is that insurers have little incentive to lower their premiums.  The Senate bill includes a tax on high-cost health insurance plans.  CBO has estimated that this policy will reduce premiums as well as contribute to long-run deficit reduction. The President’s Proposal changes the effective date of the Senate policy from 2013 to 2018 to provide additional transition time for high-cost plans to become more efficient.  It also raises the amount of premiums that are exempt from the assessment from $8,500 for singles to $10,200 and from $23,000 for families to $27,500 and indexes these amounts for subsequent years at general inflation plus 1 percent.  To the degree that health costs rise unexpectedly quickly between now and 2018, the initial threshold would be adjusted upwards automatically. To ensure that the tax affects firms equitably, the President’s Proposal reforms it by including an adjustment for firms whose health costs are higher due to the age or gender of their workers, and by no longer counting dental and vision benefits as potentially taxable benefits.  The President’s Proposal maintains the Senate bill’s permanent adjustment in favor of high-risk occupations such as “first responders.”

  • Unintended consequence, this can have an adverse affect on people with chronic illnesses who often have expensive policies because the insurance companies deem that they are very expensive to underwrite. It is adding insult to injury to have to pay 40% more for an insurance policy that is a lifeline. Those who can’t afford the premiums will be forced to choose lower cost premiums on policies with less coverage and restricted services with resultant restriction of access to care.

Comprehensive Sanctions Database

The President’s Proposal establishes a comprehensive Medicare and Medicaid sanctions database, overseen by the HHS Inspector General.  This database will provide a central storage location, allowing for law enforcement access to information related to past sanctions on health care providers, suppliers and related entities.   (Source: H.R. 3400, “Empowering Patients First Act” (Republican Study Committee bill))

  • This has a chilling effect on doctors and other healthcare providers who run afoul of government. There is no mention of what steps exist for the appeals process before you are put on the hit list. Moreover, allowing ‘law enforcement to have access to information’ will have the intended effect of making providers obey the system without deviation because of the threat of criminal prosecution. .

Modify Certain Medicare Medical Review Limitations

The Medicare Modernization Act of 2003 placed certain limitations on the type of review that could be conducted by Medicare Administrative Contractors prior to the payment of Medicare Part A and B claims.  The President’s Proposal modifies these statutory provisions that currently limit random medical review and place statutory limitations on the application of Medicare prepayment review. Modifying certain medical review limitations will give Medicare contractors better and more efficient access to medical records and claims, which helps to reduce waste, fraud and abuse.  (Source:  President’s FY 2011 Budget)

  • Providers will be subject to more random reviews at the pleasure of the government. This has the potential to waste productivity and adds to the stress that providers already experience in dealing with Medicare. Providers are already subject to a 10,000 fine per occurrence for committing fraud (Fraud extends to overbilling AND under billing Medicare). Providers will be looking over their shoulder even more then they do now. With audits and criminal prosecution looming, it will only drive more providers out of Medicare further decreasing the Medicare patient’s access to care.

Broaden the Medicare Hospital Insurance (HI) Tax Base for High-Income Taxpayers

Under current law, people who earn a salary pay the Medicare HI tax on their earned income, but those who have substantial unearned income do not, raising issues of fairness.  The House bill includes a 5.4% surcharge on high-income households to improve the fairness of the tax system and to support health reform.  The Senate bill includes an increase in the HI tax for high-income households for similar reasons, an increase of 0.9% on earnings above a specific threshold for a total employee assessment of 2.35% on these amounts. The President’s Proposal adopts the Senate bill approach and adds a 2.9 percent assessment (equal to the combined employer and employee share of the existing HI tax) on income from interest, dividends, annuities, royalties and rents, other than such income which is derived in the ordinary course of a trade or business which is not a passive activity (e.g., income from active participation in S corporations) on taxpayers with respect to income above $200,000 for singles and $250,000 for married couples filing jointly.  The additional revenues from the tax on earned income would be credited to the HI trust fund and the revenues from the tax on unearned income would be credited to the Supplemental Medical Insurance (SMI) trust fund.

  • Increases and extends taxes

Medicaid for Working Families

Beginning in April of this year, States will be allowed to expand Medicaid eligibility to more individuals.  Starting on January 1, 2014, all low-income, non-elderly and non-disabled individuals will be eligible for Medicaid.  This includes unemployed adults and working families – all people with income below $29,000 for a family of four (133% of poverty).

The Federal Government will support States by providing 100% of the cost of newly eligible people between 2014 and 2017, 95% of the costs between 2018 and 2019, and 90 percent matching for subsequent years.

All states will be treated equally and will not receive any special matching rates under this provision.

  • Great, except it does not address the problem of access to physicians who take Medicaid.  The number of providers has been dropping every year and those that still take it are stretched beyond their capacity.

Investing in Primary Care

The Act invests in grant programs that support the training of primary care providers, including family medicine, pediatrics, general internal medicine, and physician assistantship.  It also provides payment bonuses to primary care physicians.

  • In fact there is a shortage of doctors in general – both primary care and specialists. Good medical care dictates that a patient has access to both for comprehensive care. There are times that the primary care physician must refer a case to the specialist. If this system is implemented, it will be harder to find one who 1) will not have an available appointment for months, or 2) one who will be within the system. The reform effort has made specialists superfluous, and because of that a two level system will likely result. Those who have the means will leave the system to get specialty care, and/or individualized patient centered care (concierge, fee for service).

It is clear why there is an emphasis on training and expanding the workforce by adding additional, health care providers like the physician assistants and nurses. There will be an exodus of physicians from this system and they will have to have someone to replace them


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Posted Feb 24th 2010 at 7:29 am in Congress, Economics, Healthcare, Obama, Politics, Uncategorized | 146 Comments