The Senate voted 45-52 yesterday to oppose the $140 billion so-called “extenders bill” (HR 4213). The Hill is reporting that Sen. Max Baucus (D-MT) is going to offer a slimmed down version for consideration as early as today. Two key health provisions of the bill are expected to be a continued bailout of state Medicaid programs and a temporary Medicare ‘Doc Fix’.
The Sustainable Growth Rate (SGR), initiated in 1997, links the increase in Medicare reimbursement rates to growth in GDP. Since medical costs historically increase at a rate more than twice GDP, the SGR reduces the real payments physicians receive. A temporary “fix” has happened nine times in nine years to increase Medicare rates above SGR levels. Temporary fixes are the easy way out for politicians because they appear less costly to budget.
The Hill reports that Senator Baucus is going to use a budgetary trick by paring down the “doc fix” from 19 months to 6 months. Of course, this means that the budgetary cost of the bill will appear smaller, but in reality the only difference is that Congress will have to revisit this issue in 6 months instead of 19 months – kicking the can down the road once again.
Instead of providing a permanent fix to this on-going problem, the President and Congress decided to prioritize increasing spending on Medicaid expansion and on subsidies for insurance in the Patient Protection and Affordable Care Act. A permanent Medicare doctor fix was not included in the final legislative package because it would have added $300 billion to the ten-year cost estimate. So, doctors were left, yet again, to depend on the uncertainty of continued temporary fixes for the problem.
The real national problem, however, is that the President and Congress are so willing to spend today at the expense of our country tomorrow. They are increasing our debt to such a great amount that our country is at a heightened risk of reduced future prosperity.
The following figure shows the growth in federal spending between the years 2000 and 2010. Between 2000 and 2010, federal expenditures have more than doubled from $1.8 trillion to $3.7 trillion. In the first two years of the Obama Administration, Congress has increased federal expenditures by 25 percent. And yet even with this stunning rise in government expenditures the President and Congress tell us we must spend more and more.
Consider that a permanent doctor fix would cost about $30 billion per year or about three-quarters of one percent of federal expenditures. If this is a priority for our nation’s leaders, then they should find $30 billion to cut elsewhere and avoid laying the burden for this additional spending on future generations with more deficit financing. This should actually not be that hard since – as the table indicates – federal expenditures have increased by over 30 times this amount in just the past three years.
Adjusting the doctor reimbursement rates is necessary to avoid reimbursement cuts and limits to patient access. However, fiscally responsible members of Congress should insist that the PAY-GO rules apply and that an equivalent amount of other federal spending is reduced now to pay for the fix. An amendment introduced by Senator John Thune includes most of the central provisions of the Baucus bill – except for the continued Medicaid bailout. And it does so with common sense measures – such as $38 billion from cutting unobligated stimulus funds and $15 billion from selling certain government properties – that actually would produce a bill that reduces the deficit. Bundling the ‘doc fix’ with measures that reduce the deficit is certainly the direction the Senate should go to preserve access while maintaining fiscal prudence.