WASHINGTON – A bleak report on the long-term financial health of Medicare issued by the program’s federal trustees signals a pending collapse of the payment structure used to reimburse physicians.
Such was the stance the American Medical Association took in a letter to Congress several days after the Medicare Trustees’ report was published.
The group is concerned that the report projects a “looming meltdown” of the Medicare physician pay system. Despite several “stop-gap fixes” enacted by Congress, the letter said, physicians face a 10 percent cut to their Medicare reimbursements in 2008 and cuts of up to 40 percent by 2015.
“Physicians are the indispensable linchpin of our healthcare system and stability in their Medicare payments is essential to maintaining the care promised to America’s seniors,” said the letter, signed by Michael Maves, MD, AMA’s executive vice president.
AMA Board Chairman Cecil Wilson, MD, said the AMA is concerned that Medicare may increasingly reduce physician payments as a way to slow the drain on Medicare’s trust funds.
“Arbitrary, drastic payment cuts to the physicians who are the foundation of Medicare are not the answer,” Wilson said in a press release.
Because it is the second consecutive report to project that program costs would exceed 45 percent of funding revenues, trustees attached a “Medicare Funding Warning” to the report.
And although they pushed back the projected date when funding for Medicare could run out, trustees indicated that the program is increasingly unaffordable.
As healthcare costs continue to rise, expenditures for the program exceeded $408 billion in 2006, accounting for 3.1 percent of the total gross domestic product, the report said. In 75 years, spending is likely to jump to 11 percent of the GDP if substantial changes to the program are not made.
Health and Human Services Secretary Michael Leavitt said the report highlights the need to act quickly on Medicare reform. He said the federal government is finding the balance between long-term financial solvency and up-to-date care for senior citizens, but the report “shows us that we have a long way to go.”