The Medicare mess

The problem with Medicare is that it spends too little on doctors:

Want an appointment with kidney specialist Adam Weinstein of Easton, Md.? If you're a senior covered by Medicare, the wait is eight weeks.

How about a checkup from geriatric specialist Michael Trahos? Expect to see him every six months: The Alexandria-based doctor has been limiting most of his Medicare patients to twice yearly rather than the quarterly checkups he considers ideal for the elderly. Still, at least he'll see you. Top-ranked primary care doctor Linda Yau is one of three physicians with the District's Foxhall Internists group who recently announced they will no longer be accepting Medicare patients.

"It's not easy. But you realize you either do this or you don't stay in business," she said.

Doctors across the country describe similar decisions, complaining that they've been forced to shift away from Medicare toward higher-paying, privately insured or self-paying patients in response to years of penny-pinching by Congress.

...Among the top points of contention is the complaint by doctors that Medicare's payment rate has not kept pace with the growing cost of running a medical practice. As measured by the government's Medicare Economic Index, those expenses rose 18 percent from 2000 to 2008. During the same period, Medicare's physician fees rose 5 percent.

"Physicians are having to make really gut-wrenching decisions about whether they can afford to see as many Medicare patients," said Cecil Wilson, president of the American Medical Association.

The other problem with Medicare is that it spends too much:

But statistics also suggest many doctors have more than made up for the erosion in the value of their Medicare fees by dramatically increasing the volume of services they provide - performing not just a greater number of tests and procedures, but also more complex versions that allow them to charge Medicare more money.

From 2000 to 2008, the volume of services per Medicare patient rose 42 percent. Some of this was because of the increasing availability of sophisticated treatments that undoubtedly save lives. Some was because of doctors practicing "defensive medicine" - ordering every conceivable test to shield themselves from malpractice lawsuits down the line.

"Then you have doctors who order an MRI for an unremarkable headache or at the first sign of back pain," said Robert Berenson, a Commissioner of the Medicare Payment Advisory Commission, an independent congressional agency. "It's pretty well documented that it doesn't help patients to have those scans done in these cases. But if you have the machine in your office . . . why not?"

Whatever the cause, the explosion in the volume of services provided helps explain why Medicare's total payments to doctors per patient rose 51 percent from 2000 to 2008.

So which is it? The answer is almost assuredly both -- welcome to the knowledge problem. Government, in this case Medicare, lacks the necessary information to know whether the amount of money it is paying to doctors is commensurate with the value they are generating. Some doctors no doubt have the patient's best interest at heart and are simply trying to provide needed care. Others surely see the patients as walking checkbooks, and cook up unnecessary procedures to pad their incomes.

Who is best positioned to tell the difference? The patient. If patients were spending their own money instead of the government's you can rest assured they would have more questions about the necessity of expensive procedures that are possibly unnecessary, and would seek out second opinions. They would also fight tooth and nail to preserve relationships with doctors who they like. Spend someone else's money and the thinking completely changes.

It's time to start thinking about vouchers.