HealthLawProf Blog

Editor: Katharine Van Tassel
Concordia University School of Law

Tuesday, April 8, 2008

Medicare Future Solvency and Access to Care

AmNews reports on some new numbers for Medicare and its future - it doesn't sound too rosy:

Medicare is facing a long-term financial meltdown, but health policy experts said Congress is not likely in this election year to take the broad actions needed to keep the program sustainable.

Both the physician and hospital portions of the program are in trouble, according to the 2008 Medicare trustees report, released late last month. Part B, of which spending on physician services constitutes about 30%, does not face insolvency because it automatically is funded by general tax revenues and beneficiary premiums.

But it does face rapid growth and will consume an ever-larger portion of the nation's economy, the trustees said. The report predicts that Part B spending will climb from $187 billion this year to $325 billion by 2017, driven in part by the first wave of retiring baby boomers in 2010. . . .

President Bush called for cutting Medicare spending by $12.2 billion in his fiscal 2009 budget plan. Among the proposed reductions were scaling back inpatient hospital care by $4 billion and cutting billions more from other hospitals, home health care, skilled nursing facilities and hospice care . . . .

The trustees report projects that Medicare Part B will increase by an average of 6.2% through 2017. This estimate assumes that scheduled physician pay cuts of about 40% over the next nine years will happen. But the trustees expect Congress again to prevent the reductions from occurring. The first, a 10.6% cut, would take effect July 1.  If lawmakers use the same legislative devices to prevent the cuts that they have since 2003, this would add to program spending. Part B expenditures would grow by an annual average of 8%, much faster than the 4.8% growth expected in the U.S. economy, as measured by the gross domestic product.

But physician organizations warn against cuts in doctors' Medicare payments. "Trying to save Medicare money by slashing physician payments will ruin the physician foundation of Medicare for current and future generations of seniors," said Edward L. Langston, MD, chair of the American Medical Association Board of Trustees.   An AMA survey found that 60% of physicians say this year's cut alone would force them to limit the number of new Medicare patients they can treat, Dr. Langston noted. "Couple this fact with a physician shortage and the huge influx of baby boomers soon to enter Medicare, and the outlook for Medicare patients' access to care is grim.". . . .

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