• Medicare access – ctd.

    A sharp reader wrote me, “If you cut FFS reimbursements *and* you cut Medicare Advantage (MA) reimbursements, which Obamacare does, I think your argument loses some force.” (Follow the link if you haven’t read my prior Medicare access post.)

    I was ready for that one. The reader is correct, but the follow-up arguments are:

    1. The vast majority of Medicare beneficiaries (and maybe still all of them) will have access to an MA plan even with payment rates cut substantially. Nobody is talking about cutting all of them below FFS cost when you factor in the bloated quality bonus program.
    2. Sure, as FFS cost falls, so will MA payments. But, encouraged by insurers, Congress has long had the ambition to find ways of providing MA access to all beneficiaries. I expect they’ll keep doing that. This is, in part, why the bonus program has become bloated.
    3. If FFS access becomes bad enough, beneficiaries who can will want to pay more for better access. That’s a profit opportunity for a premium-charging MA plan. Under the “utility maximizing, savvy shopper” assumption, we must expect the market to meet beneficiary demand.
    4. Under premium support, the hypothesis has been that plans in many areas are cheaper than FFS because they pay providers less. Seems like there must be some room for payment cuts in that case.
    5. Having said all that, you can’t cut to zero. There is some lower bound where things become untenable. Do we know where that is? No. Is it worth finding out? You bet. And with MA plans in the wings, it seems like beneficiaries have some options. So what’s the big deal?


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    • The answer to better access is to have more doctors. Relaxing immigration limitations and licensing restrictions would greatly increase the supply of doctors, alleviating the problem.

      MA has the potential to exacerbate the problem. With many people in Medicare, it’s hard to turn away Medicare patients. Siphoning people out of Medicare to MA reduces Medicare’s bargaining power with providers.

    • Maybe it’s time to stop assuming that the answer to every access problem is more doctors. Maybe it’s more NPs. Maybe it’s more PAs. Maybe it’s widening practice parameters for providers other than doctors. Maybe it’s making physician practices more efficient in their use of resources. There are thousands of alternatives, and I don’t know what the right one is.

      • All of the above – more doctors, more PAs, RNs, etc. Relaxing immigration restrictions and licensing requirements would help in all of these cases, as would more teaching facilities.

    • Which licensing requirements do you propose eliminating? Graduating from an accredited medical school, passing a licensing exam, and 1-3 years of accredited graduate medical education are the norms for most states. I would be very interested in hearing your ideas on how these requirements could be modified to increase the supply of providers while protecting the public. (I personally think the fourth year of medical school could be safely eliminated, but I think that the exam and resident training are hard to argue with)