Controlling Medicare Costs By Asking the Correct Question

July 6, 2013

(Editor’s Note: Stephen Schimpff has been a member of our Advisory Board since the very beginning. He has given us numerous exclusive posts; here is his latest!)

(Editor’s Note: Stephen Schimpff has been a member of our Advisory Board since the very beginning. He has given us numerous exclusive posts; here is his latest!)

Is there a good solution to the Medicare cost and quality issues? Setting aside either the Democrats’ approach to basically enact price controls by ratcheting down reimbursements or the Republican’s plan to re-structure Medicare to a defined contribution plan, albeit not for ten years, are there approaches that could be instituted now that would have an immediate impact on improving quality of care and thereby reducing costs? There are, but first we need to understand some of the issues facing Medicare today.

First and foremost, primary care physicians (PCPs) have been marginalized by Medicare for decades with low reimbursement rates for routine office visits which has led to the 15-20 minute office visit with 10-12 minutes of actual “face time.” A 10-12 minute interaction means no time to truly listen, no time to prevent, no time to coordinate and no time to just think. This has in turn meant that whenever a patient has a slightly more complex issue, one that is not easily recognized in a short time frame, then the PCP is quick to refer to a specialist. It is this very act that dramatically drives up expenditures with added tests, imaging and procedures along with the specialist’s fees. Medicare has been exceptionally short sighted in this regard and as a result is the prime culprit in the rapidly rising costs of care. Further, this lack of time being reimbursed means that two critical quality care needs area left largely unattended. The first is offering extensive preventive care and the second is coordinating the care of the patient with chronic illness. Recall that 85% of Medicare enrollees have at least one chronic illness and 50% have three or more. These are mostly the result of years of adverse behavior patterns but it is never too late to begin preventive care so time spent here is valuable for better health quality and ultimately reduced costs. And those with a chronic illness need to have their team of caregivers coordinated – every team needs a quarterback and the PCP is the obvious choice. But Medicare does not reimburse for this critical function which when done correctly means less reliance on specialists, tests, procedures and prescriptions. The result of this low reimbursement for routine visits and lack of reimbursement for either extensive preventive care or chronic care coordination over the years is a PCP shortage, many current PCPs no longer accepting Medicare, and the remaining PCPs trying to see 24 to 25 patients per day, each for 15 minutes despite the patient’s complex problem list. And this means less than stellar patient care in many instances.

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The result is a real problem facing Medicare right now – the rapid loss of primary care physicians (PCPs) who will no longer accept Medicare; this on top of the shortage of PCPs across the country with no end in sight. The ACA does include an extra 10% increase to primary care providers but this will probably too little, too late. And if the mandated 27% across the board physician cut in reimbursement is ever implemented by Congress (it probably never will be but Congress refuses to clarify itself) then it is reasonable to expect that there will be a mass exodus from accepting Medicare reimbursements by all physicians, not just PCPs.

The next post will highlight some specific recommendations for Medicare to enact that would improve quality and reduce costs.

 Stephen C Schimpff, MD is a quasi-retired internist, professor of medicine and public policy, former CEO of the University of Maryland Medical Center. He chairs the advisory committee for Sanovas, Inc. and is a senior advisor to Sage Growth Partners. He is the author of The Future of Health Care Delivery- Why It Must Change and How It Will Affect You from which this post is partially adapted.