American College of Physicians: Internal Medicine — Doctors for Adults ®

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Debt deal could hurt programs crucial to internal medicine

From the September ACP Internist, copyright 2011 by the American College of Physicians

By Robert B. Doherty

Politicians often choose to wait until the absolute last minute to strike a deal on difficult decisions. Never before, though, has the brinkmanship involved a potential default of the United States' legal obligations to pay its bills—the debt ceiling.

This year Republicans vowed to use the debt ceiling, which authorizes more borrowing to meet the United States' already authorized legal commitments, to force an agreement to reduce future spending. Although President Obama and most Democrats initially resisted tying the debt ceiling to a deficit reduction plan, they later came along.

Throughout the debt ceiling debate, ACP advocated for several priorities. First, the College urged that an agreement be reached in time to prevent a potential disruption of Medicare and Medicaid payments to physicians. Second, ACP advocated that a permanent solution to the Medicare Sustainable Growth Rate (SGR), which causes annual scheduled cuts in physician payments, be included in a debt ceiling agreement, noting that the budget cost of fixing the SGR and preventing further cuts has increased each year that Congress has failed to enact a solution. Third, ACP agreed that federal health spending needs to be reduced, but urged continued and adequate funding for critical programs, including Medicare graduate medical education (GME) and other programs to train more internal medicine specialists. Finally, the College recommended that reductions in federal health spending be achieved by working with the profession to target key cost drivers, such as reducing marginal and ineffective care, basing coverage on clinical effectiveness with consideration of cost, and providing physicians and patients with information on comparative effectiveness. Realistically, though, ACP and other interest groups had very limited ability to influence the final agreement that was negotiated behind closed doors by congressional leaders from both parties and the president.

Meanwhile, House Republicans, Senate Democrats and the White House strongly disagreed on how to reduce the deficit. It wasn't until two days before the projected default date of Aug. 2 that they reached a compromise. The final agreement gives President Obama the authority to increase the debt ceiling in two stages through 2012, but with conditions. Congress must enact $900 billion in cuts to discretionary spending programs (including defense and domestic programs) over the next 10 years. Future spending is capped to ensure that the required savings are reached. This is where the danger lies for the future of primary care.

A “super-committee” of Congress, made up of an equal number of House and Senate Democrats and Republicans, will identify another $1.5 trillion in additional savings from entitlement programs such as Medicare and Medicaid. The super-committee will make its report in November, and Congress has until Dec. 23 to cast an up-or-down vote on its recommendations. If the super-committee can't reach an agreement, or if Congress votes its recommendations down, another $1.2 trillion in across-the-board cuts, split equally between domestic programs and national defense, would be triggered, including cuts in Medicare payments to clinicians (but with no cuts in benefits); Medicaid and Social Security are exempted. The trigger mechanism is intended to put pressure on the super-committee to come up with the necessary savings and for Congress to agree to them, the thinking being that Republicans would not want to see defense spending cut and Democrats would not want to see Medicare and other domestic programs cut.

How does the agreement measure up? It prevents a default situation where the federal government might have had to suspend Medicare and Medicaid payments to physicians. It does not mandate any immediate GME cuts, but it also doesn't include a solution to the SGR.

The real impact of the agreement on internists and their patients, however, won't be known until Congress decides how to reach the required savings. Mandated cuts in discretionary programs could result in underfunding or even eliminating programs aimed at addressing a growing shortage of internal medicine specialists and other primary care physicians, such as Title VII primary care training grants, National Health Service Corps scholarships and loans, and grants to help physicians become patient-centered medical homes. Medical and health services research and the ability of the Centers for Disease Control and Prevention and the Food and Drug Administration to protect the public from preventable diseases and unsafe drugs and foods could be compromised.

Congress' super-committee could recommend major changes in Medicare, including structural changes like increasing the eligibility age and requiring that higher-income beneficiaries pay more. It could also impose cuts on GME funding for internal medicine training programs, cut pay for high-cost procedures, or even try to force physicians into untested new payment models. And Medicare payments to physicians could be subject to across-the-board cuts if the trigger mechanism is invoked, as if the SGR wasn't enough for physicians to worry about.

As Congress goes about its work of finding the required savings, ACP will continue to urge it to focus on the true cost drivers behind increased health spending, such as the hundreds of billions spent on overutilization of marginal and ineffective care, instead of slashing reimbursement to internists or cutting spending on critical programs to improve care access and quality and address physician workforce shortages.

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