• Reflex: November 22, 2011

    Pay cut for docs looms as debt panel flops, report Haberkorn and DoBias in Politico Pro. “If the super committee reports that it can’t reach a deal — or that it has a small deal that doesn’t include a fix — the committees will have only about five weeks to pass a bill to thwart a 27-percent cut called for by the Sustainable Growth Rate.” But the 27% pay cut is unlikely, reports Brittany Davis. “That’s why, most experts say, the chances of Congress allowing the SGR to go into effect are slim. ‘It’s never been implemented and it’s never going to be implemented,’ said Joe Baker, at the Medicare Rights Center.” Aaron’s comment: I think the experts have it right. I doubt that a 27% pay cut is ever going to happen. However, I think the 2% pay cut that the trigger might require is a real possibility.

    WakeMed and Rex Healthcare purchase more practices, writes David Bracken. Two physician practices affiliate with rival hospital systems in Raleigh, N.C. Don’s comment: A small, local story, that is just another step toward the aggregation of medical practices by hospital/health care systems. Some of my past blogging focusing on these issues in the Research Triangle part of N.C., hereherehere, a related TIE FAQ on the effect of hospital concentration on prices, and how concentration could be good.

    • -The authors on this blog consistently argue that provider concentration increases their market power and drives up prices. Seems plausible in principle and the data seem to support that claim.

      -In practice, large numbers of doctors and hospitals seem to be aggregating into larger provider/hospital blocks in anticipation of the ACA coming into force in 2014.