Medicare in 2006: Bah, humbug!

December 16, 2005

Outlook

'Tis the season to be jolly . . . except, perhaps, for doctors and their patients frustrated over Medicare.

For patients, the new prescription drug benefit, which will begin in January for those who've enrolled by then, was supposed to allay anxieties over the high cost of medicines. In time, it could well prove skeptics wrong and do just that. But in the short term, Medicare Part D, as it's also known, has unleashed a whole new set of anxieties.

Apart from the complexities of the benefit itself, the sheer number of drug plan choices has left many older Americans scratching their heads. Pre-enrollment surveys anticipated as much. On Nov. 10, five days before sign-up began, the Kaiser Family Foundation released the latest of its surveys tracking seniors' views of the upcoming benefit. When asked about having multiple drug plans to choose from (the government predicted at least 40), almost three in four respondents said that that would make it more confusing and difficult to pick the right one.

Ignorance of that late fee, says urologist B. Dan Witt of Hoisington, KS, is a time bomb waiting to explode. "Many of my farmers out here think they're being patriotic by not using a service they don't need right now," says Witt. "But when they find out what that delay will cost them, their reaction won't be pretty." Witt has voiced his concerns to Kansas Rep. Jerry Moran, who's said that he's "looking into legislation to repeal the penalty provision."

Doctors have their own beefs with Medicare, of course.

At the top of that list is the 4.4 percent pay cut scheduled for 2006-the first in a series of reductions that, if left unchecked, would reduce physician pay rates by roughly 26 percent by 2011. Adding to doctors' woes is the ripple effect such cuts are likely to have on what they earn in the private insurance market, since many health plans peg their own fees to what the Feds pay. Meanwhile, the cost of doing business for doctors is expected to rise 15 percent over the next five years, according to a report released earlier this year by Medicare's trustees.

Congress could very well stage a last-minute rescue, as it has in the past. (At press time, the fate of several bills was unclear.) But however things turn out, doctors are getting tired of going hat in hand each year to Capitol Hill. They want a permanent fix, especially if the administration continues its push toward performance-based pay. Without that fix, says policy guru Bob Doherty of the American College of Physicians, some doctors will retire early, others will limit the number of Medicare patients they see, and "none will be in the mood to look into EHRs and other things needed to do quality measurement and reporting."

No wonder, then, doctors and their patients are feeling a bit Scrooge-like this Holiday season-and why, when it comes to Medicare, their stocking stuffer of choice could well turn out to be a colorfully wrapped lump of coal.