Yes, there seems to be some level of agreement between Republicans and Democrats on one very important issue.
We all know the SGR formula for physician Medicare payments is broken. We are all tired of the twisted Kabuki theater that takes place at the end of every year, the net result of which is the cuts are postponed, dollars are wasted fidgeting with claims processing only to get about what we thought we were going to get anyway, and the elephant just gets kicked further down the road.
We also all know that now, after years of elephant kicking, the problem is so huge that it is easier to kick it again than to actually solve the problem.
But, both parties have their teams of high ranking people, healthcare policy wonks, and nerds with spreadsheets working on a real fix to the SGR problem. The fact that the ‘S’ stands for ‘sustainable’ is wickedly ironic.
We might be sneaking up on real action, but is Washington. However, we are getting little glimpses behind the curtain on the thinking of the two groups and, while there are differences, there is enough commonality on some big things that we could be relatively safe in assuming something like these ideas might be part of the actual solution.
First, you can assume that Medicare will be essentially flat for another ten to twelve years. And yes, I am discounting any increase that starts with 0.x%. Yep, after about that many years of basically flat already, we are likely to see that repeated. So, you have 20-25 years of cost increases (we call that inflation) with virtually no increase in revenue. That means…well, you know what it means because what it means because it has shown up in your wallet.
And you know that increasingly your commercial contracts are tied to Medicare, so this basically means the best case scenario is that your ‘per unit’ reimbursement is flat for the next ten years.
I hope you are not reading this over breakfast as I don’t want to ruin your cornflakes.
We’ve been saying to our clients for a long time that they better gear their operations and personal lifestyle to work at Medicare levels of reimbursement. Kudos to those of you who find a way to beat that benchmark, but that is still generally sound advice.
The second idea that both sides seem to like, though with variations in the execution, is some form of pay for quality. This is likely to be something like a 5%+/- swing, based on your results.
So, if you are below average (and since physicians are like children in Garrison Kellior’s Lake Wobegon, that means almost no one is below average), you could lose up to 5% of that already flat reimbursement. And if you are above average, you could get up to 5% more.
We’ll be watching to see how this plays out. Logic says we have to tackle this beast at some point and with healthcare the only thing that seems to matter in Washington these days, why not now? I remain a little skeptical and continue to keep my eyes open for pachyderm’s tumbling down the trail. But, if there really is agreement that reality is reality and flat is all we can afford, then it wouldn’t be a total surprise to see some action here in this general direction.