Maybe it was too good to be true. A rare bipartisan health care reform proposal backed by leaders of three major House and Senate committees is foundering because Republicans and Democrats can’t agree on how to pay for it. The irony is that the measure, which would change the way Medicare reimburses doctors, would slow the growth of health care spending and taxpayers’ costs. Lawmakers should stop the partisan bickering and start working in good faith to find a way to enact the long-overdue and much-needed reform.
Congress adopted the “sustainable growth rate” formula in 1997 to require physicians’ fees to be cut when spending on Medicare’s insurance plan for doctor bills (“Part B”) grew faster than the economy. But lawmakers have repeatedly postponed those reductions in response to opposition from physicians, who argued that the lower rates would lead them to stop treating Medicare patients. Instead, Congress has spent nearly $154 billion on higher fees. The formula clearly isn’t the solution to the very real problem of rising health care costs, and policymakers have known it for years. They just haven’t been able to find a better one.
That changed last month, when top Republicans and Democrats on two House and one Senate committee agreed on a proposal to replace the formula with a set of financial incentives for doctors to do higher-quality, more efficient work. The new system would wean Medicare off of its current “fee for service” payment system and usher in new systems that motivated doctors to control costs.
The Congressional Budget Office estimated that the bipartisan bill would cost $138 billion more over 10 years than sticking with current law. But that’s based on the assumption that Congress could have been counted on either to enforce the existing formula, which it simply will not do, or find another way to pay for the growing cost of Part B. The reality is, the proposal would save taxpayers money, not cost them, by prompting doctors to fix some of the many inefficiencies in Medicare.
Sadly, that doesn’t seem good enough for many lawmakers, who are more fixated on paper savings than real ones. And in the absence of a realistic way to offset the $138 billion, the House approved the one proposed by the GOP: delaying for five years the Affordable Care Act’s requirement that all adult Americans obtain health insurance. The new chairman of the Senate Finance Committee, Democrat Ron Wyden of Oregon, has responded by trying to persuade his colleagues to offset the bill’s costs by counting imaginary savings from the end of U.S. combat operations overseas.
The current formula is scheduled to cut doctors’ fees by about 25 percent on April 1. With Congress unlikely to settle on a replacement any time soon, some members want to pass yet another stopgap bill waiving the formula and imposing some other cuts, punting the issue until after the election — and possibly into the next Congress, when Republicans may control both chambers. But such a move risks losing the bipartisan support for difficult but much-needed reforms. A better alternative is to use money already set aside by Congress to suspend the formula just for a few months. That would give lawmakers time to come to agreement on additional ways to make Medicare more efficient and less expensive — assuming that Congress continues to insist on offsetting the cost of a bill that will save the taxpayers money.