THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Wednesday, October 18, 1995 TAG: 9510180009
SECTION: FRONT PAGE: A14 EDITION: FINAL
TYPE: Opinion
SOURCE: By OSCAR E. EDWARDS, M.D.
LENGTH: Long : 111 lines
Physicians face a dilemma in commenting on the current proposals in Washington to cut $450 billion from Medicare and Medicaid over the next seven years. By speaking out critically, we can be accused of acting purely out of self-interest. By remaining silent, we abandon our responsibility to our patients and the public health and our roles as educator and advocate for our patients. I cannot remain silent.
The massive cuts proposed by Congress have little to do with health-care spending and the solvency of Medicare and Medicaid and everything to do with budget and tax goals. While balancing the budget and reducing taxes are admirable, they should not be accomplished at the expense of patients, hospitals and Eastern Virginia Medical School. Representatives Owen Pickett and Norman Sisisky and Sens. Charles Robb and John Warner should consider the following issues as they affect our communities and our families.
Congress plans to excise $270 billion from Medicare. Would most Medicare patients be able to absorb higher co-pays, deductibles and premiums in addition to the cost of prescription drugs and long-term-care expenses? According to 1993 Census data, the average household income of those 65 and older is $17,751. A recent Rand Corp. study showed that the typical American pre-retirement family (age 51-61) has acquired only $17,300 in assets, which wouldn't pay for even a half-year in a nursing home. The typical Medicare patient now pays 21 percent of income for out-of-pocket medical expenses. Under the proposals in Congress - which double premiums over seven years and could raise deductibles - seniors on average would spend a full one-quarter of their household income on out-of-pocket medical expenses.
In Medicaid, Congress plans to cut $182 billion over seven years (a 32 percent cut, based on expected growth in Medicaid) and take away the guarantee of coverage for eligible individuals. Program responsibility and funding will be transferred to the state with few strings attached. No one has ever shown how the states will be able to absorb the huge reductions without simply eliminating more of the poor and elderly long-term patient care. With only one-third of Medicaid expenses used for the non-elderly non-disabled poor population, this most-vulnerable population will be most targeted for cutbacks in medical care. Additionally, important federal standards for nursing-home care, which enjoyed bipartisan support, are eliminated by the congressional proposals.
The Medicare and Medicaid cuts will increase the number of uninsured individuals in the community and further tax our hospitals and emergency rooms. Hospitals are already struggling to cope with reduced payments from managed care and reduced ability to provide care for the uninsured. Nevertheless, hospitals are cut drastically in the congressional proposal. Inner-city and rural hospitals, especially, will be jeopardized, and these institutions often provide the only health services to undeserved populations. Severe cuts to teaching hospitals will impact their ability to train new physicians, provide care to high-cost complex patients, care for those without insurance and maintain world-class medical care.
Will physicians limit the number of Medicare and Medicaid patients they accept, and will this create or exacerbate problems for these patients? Physicians are under multiple and unrelenting pressure from both private and public insurers in a rapidly changing health-care-delivery system. Purchasers and payers of health coverage demand discounted fees and other cost reductions. Another round of budget cuts on top of reductions already enacted by Congress in 1993 will make it especially difficult to cover the cost of providing care to Medicare patients. Medicaid patients already have severely limited access.
What is the potential impact of cuts in Medicare and Medicaid on American families and businesses? A recent study by Lewin-VHI, on behalf of a national business, labor and health-provider coalition, showed that the congressional proposals are likely to create a $90 billion hidden tax on corporations and families as a result of shifting medical costs from the government to private payers. This cost-shift will occur despite the growth in managed care, which diminishes cost-shifting ability, the study predicted. Employees will realize the ``hidden tax'' in the form of increase contributions for health coverage and reduced wages, as firms pass on increased costs. Some firms will likely drop health coverage altogether.
What about the Medicare Trust Fund? Are $450 billion in cuts needed to help keep it solvent? The Medicare Trust Fund, financed through payroll taxes, pays for Medicare Part A - hospital care. Most of the congressional Medicare cuts are made to Medicare Part B, which pays for nonhospital services and is funded by beneficiary premiums and general revenues. Increases in patient out-of-pocket costs and large cuts to nonhospital services do nothing to extend the solvency of the Medicare Trust Fund. According to the Health Care Financing Administration, only $89 billion, less than a third of the congressional proposal, is needed to extend the life of the trust fund for 10 years. Clearly the funds are going to some other ``cause.''
The American College of Physicians - the nation's largest medical-specialty society and second-largest medical organization - opposes the massive budget cuts in Medicare and Medicaid because they serve the goals of federal budget balancing and tax reduction, not health-care-cost containment needs. Clearly the rate of spending in Medicare, both Part A and Part B, must be slowed, but reforms must be carefully planned and implemented. Massive, arbitrary cuts made with little regard to standards of quality and appropriateness place patient care at risk.
The American College of Physicians advocates long-term Medicare and Medicaid reforms that are consistent with and lead the way to broader health-system changes. Genuine reforms should expand, not contract, quality health care; avoid cost-shifting, reduce excess capacity and unnecessary utilization of health services and institutions; fully exploit administrative savings; increase cost efficiency in health-care delivery through initiatives such as centers of excellence, outcomes research and case management for high-cost services; and confront the difficult issue of prioritization of health-care services for all populations, not just the elderly and the poor.
Our representatives in Congress can do better than a huge package of arbitrary budget cuts. My patients are counting on it. MEMO: Dr. Edwards, a member of the Sentara Medical Group, is chair of the
board of governors of the American College of Physicians.
by CNB