Like office workers talking around the water cooler after a big game, many physicians are doing their own Monday morning quarterbacking on health care reform, especially as it relates to the Medicare sustainable growth rate (SGR) formula.
Some argue that organized medicine, including the American College of Physicians and American Medical Association, should have demanded repeal of Medicare's SGR formula as a condition for support of the broader health care reform bill. They believe that organized medicine's “failure” to get Congress to deliver on the SGR demonstrates ineffective advocacy and diminished clout.
Such second-guessing has intensified with Congress' latest failure to enact a long-term solution. In June, Congress allowed a 21% cut to go into effect for three weeks, and then passed a stop-gap measure to increase payments by 2.2%, retroactive to June 1. But the reprieve is temporary. On Dec. 1, physicians will face a 30% cut, unless a post-election, lame-duck Congress passes something to avert it.
I appreciate why many well-meaning physicians are attracted to the notion that doctors could have demanded repeal of the SGR in exchange for support of health care reform. They have every reason to be angry at Congress. But trading SGR repeal for health care reform would not have achieved the desired goal. Instead, it would have sullied medicine's reputation by saying to the public that medicine's support for health care reform was up for bid.
An inherited mess
We should start by remembering that the health reform bill didn't create the SGR problem, nor did it solve it.
The SGR was enacted by a Republican-controlled Congress and signed into law by a Democratic president, Bill Clinton, in 1997. It triggers cuts whenever Medicare spending on physician services exceeds growth in the overall economy, as measured by per capita gross domestic product (GDP).
In 2002, Congress allowed a 5.4% SGR cut to go into effect. Every year since then, physicians have faced annual scheduled cuts, and each time, Congress has stepped in to enact a temporary reprieve, sometimes for a few weeks or months, sometimes for a year or two. But Congress pretended to pay for each temporary reprieve by requiring even deeper cuts in future years. As a result, not only has the annual cut gotten bigger, the cost to the federal budget of reversing each one also has soared. It would now cost more than $230 billion over 10 years to eliminate the SGR cuts and keep physician payments at current rates.
The SGR, in other words, is the failed legacy of six consecutive Congresses, three administrations, and both political parties over 13 years to address the need to repeal the SGR, replace it with a better system, and honestly account for costs. Health care reform clearly didn't create the problem, but could it be the vehicle for solving it?
The SGR and health reform
For SGR repeal to have been part of the health reform bill, a majority of the House of Representatives and at least 60 U.S. Senators would have had to agree. The House of Representatives, in November 2009, voted to repeal the SGR, separate from the health reform bill itself.
With every Republican in the Senate opposed to the Democrats' health reform bill, however, the SGR repeal could have survived as part of the legislation only if every single Senate Democrat agreed to it.
But at least a half-dozen Senate Democrats, mainly fiscal conservatives already concerned about the legislation's cost, were unwilling to spend hundreds of billions more from the federal treasury to incorporate SGR repeal. Plus, increased spending on the SGR would have required offsetting tax increases or cuts somewhere else in Medicare.
It is wishful thinking, then, to believe that demanding repeal would have brought each and every Democrat on board or persuaded at least one Republican to vote for the health reform bill. More important, it would have been the height of cynical deal-making, the kind that the public rightly decries, for organized medicine to trade health reform for SGR repeal.
ACP supported health care reform legislation because it advanced ACP policies to provide almost all Americans with affordable health insurance coverage, to end insurance practices that deny people affordable coverage because they have a pre-existing condition or lose their jobs, to create incentives to train more primary care physicians, to pilot-test innovative payment and delivery models like the patient-centered medical home, to fund research on comparative effectiveness of different treatments, and to cover preventive services with no cost-sharing.
Without health reform, the Census Bureau estimates that more than 60 million people, one out of five residents, would lose health insurance over the next decade. With it, 96% of legal residents will have coverage, resulting in 32 million fewer uninsured persons.
Yes, the endless cycle of Medicare payment cuts created by the SGR endangers access for many of the 35 million people whose access may be at risk as a result. Congress needs to live up to its promises to beneficiaries by repealing the SGR, once and for all. But this need not be at the expense of the tens of millions of people who will benefit from enactment of the health reform law.