• Medicare and access

    Something has been bothering me lately about the claims that FFS Medicare cuts to provider payments will lead to access problems for beneficiaries. It’s not that I think they won’t lead to access problems. In fact, I’ve written many times that if FFS Medicare payments diverge too far from payments by private plans, beneficiaries will have some access issues.

    What bothers me is that discussions of access issues always ignore Medicare Advantage (MA). Every beneficiary has access to MA plans. Those plans are not required to pay providers FFS rates. They pay them whatever they can negotiate. Maybe it’s more. Maybe it’s less. That’s the way the market works. That’s they way it’d work under premium support proposals too. Do private plan payment rates bother anyone? If so, speak up. If not, it is inconsistent to go after FFS Medicare on that issue.

    If FFS Medicare cuts too much and beneficiaries can’t find doctors, why won’t they just enroll in MA plans? Plan switching by savvy consumers is precisely what is supposed to drive the market under premium support. If it is to work under such a plan, it ought to work under current Medicare too. Sure, the price signal is not as clean since plan payments aren’t closely tied to bids. But consumers still know when they are getting a lousy product because they don’t have access to enough of the doctors they want to see, right?

    Well, I’m skeptical beneficiaries can be savvy insurance product shoppers. But those that are attacking Medicare for its access-threatening payment cuts tend to be the same ones who are not skeptical about grandma’s ability to find a good deal.

    But, I don’t mean to turn this into a snarky political point. I really just want to ask a basic question: if FFS Medicare commits suicide by pricing its way to access problems, don’t we have MA as a backstop? Isn’t that good enough? If not, why not?


    • I believe the PPACA cuts Medicare Advantage subsidies, which could therefore make the MA alternative more expensive.

    • Let’s start by recognizing that Medicare right now must pay pretty darn well, since physicians are less likely to accept a new private pay patient then a Medicare patient (http://content.healthaffairs.org/content/31/8/1673.abstract#aff-1)

      Second, let’s recognize that if most plans are doing it right, there should be some physicians who refuse to participate. The goal of any reasonable plan should not be 100% participation.

      Finally, let’s remember that there’s another backstop. Physicians can choose to become a non-participating provider, allowing them to charge more than the Medicare payment (9.25% higher) and balance bill the patient.

      Oh, yeah, there’s another backstop. Physician practices could innovate, drive their costs down, and make a profit despite the lowered fees.

      • Dshea, the average primary care practice does not have an R&D budget to figure out what that looks like. You have no clue about the financial (or emotional) price of primary care or how undervalued it is in our disease treatment industy.

        • An R&D budget is far less important for innovation than a creative mind.

          But, if you cannot keep up with the business practices in your economic sector, than you need to rethink how you run your business. That may mean becoming a bigger primary care practice or integrating with a specialty group or hospital or insurer.

          But, while Austin focuses on the fee cuts here, that’s not the only thing PPACA did. It increased payments for primary care because, as I agree, it is undervalued. And the overall change, increasing both the absolute and relative payment for primary care, while cutting it for others types of care, is likely to have many positive effects. (http://www.commonwealthfund.org/~/media/Files/Publications/Issue%20Brief/2012/Mar/1585_Reschovsky_paying_more_for_primary_care_FINALv2.pdf)

          And those that don’t like it, as noted above, do have other options.

    • Interesting concept but to build on Foosion’s point, believe that PPACA ultimately is intended to bring MA in line with “traditional” Medicare.

    • “But those that are attacking Medicare for its access-threatening payment cuts tend to be the same ones who are not skeptical about grandma’s ability to find a good deal.”

      In other industries with highly complex products and services, businesses have emerged to fill the informatoin gap between consumer and retailer / service-provider. (E.g., personal financial advisers, Consumer Reports, insurance brokerages) In healthcare, these value-add businesses are relatively uncommon, particularly when it comes to helping consumers pick Medicare D and MA plans.

      By being overly prescriptive on what Medicare dollars can and cannot fund, we largely prevent emergent solutions from forming to address problems like this.