With a $600 billion down payment on the critical need to expand access and coverage, the President’s budget (and Congress’ reaction to it) indicates nobody knows where the beef to fund health care reform will come from. The total cost of the president's budget is estimated to be about $900 billion more, at $1.5 trillion over 10 years. In fact, the beef over how to fund reform is the toughest part of the challenges ahead this summer and fall. 

ACC Blitzes the Hill
About 15 ACC member leaders from around the country blitzed the Capitol last week to discuss the budget, the SGRrrr, imaging, the Quality First campaign, and the need for delivery system and payment reforms. We visited more than 40 members of Congress and clearly made an impact. Congress doesn’t hear about specific ways in which costs can be reduced by systematically improving quality, only the other way around. Starting first with cost containment and having quality as a secondary goal will not reduce costs and will have other catastrophic consequences.

Talking about the SGRrrr
Fixing the SGRrrr is one issue that must be resolved for health care reform to happen. The SGRrrr itself will require a $200 – $300 billion fix simply to eliminate cuts without providing increases over the next 10 years for doctors (what a deal!). It is shocking by comparison that it would only cost $7 billion per year in total to add 10 percent to all Medicare physician reimbursements. Being over $250 billion in the hole is no fun. And it’s certainly not the fault of doctors. Weird that Congress expects physicians and other providers to be grateful when they apply band aids to the mess they have created.

During the Fly-In, we heard encouragement from the House members that they want to pony up the money to actually eliminate the SGR deficits and move on; but we heard concern from the Senate that they don’t know where the money will come from to do that. The Dems have proposed reducing what some feel are obscene bonus funding going to those Medicare Advantage insurers (the fee-for-service models) to bring their per capita equivalent reimbursement down to equal fee-for-service (FFS) Medicare funding — which seems only fair. That would save over $200 billion! These cuts don’t affect all Medicare Advantage (MA) plans as severely as they do the FFS versions of it, but Medicare Advantage in general would be affected and some large providers -- like Kaiser Permanente and the big integrated systems would be affected.

However, the 85% percent of the Medicare program not in these large systems is being underfunded -- mainly through the SGRrr. Of course this is controversial. Most Republican offices told us the cuts would be an assault on private insurance (MA) — they say it is the secret agenda focused on the creation of a single-payer government system. But imagine if that MA $230 billion cut drops off the table: It will mean physician payment budget cuts and a failure to go after the SGRrrr. This ain’t fun.

There were some very optimistic things proposed by the President in the budget, and there are some optimistic projections coming out of Congress as well to promote quality of care, new payment incentives, comparative effectiveness and to reduce disparities, but none of that good stuff is going to happen until these ugly mega-issues get resolved. There will be a lot of beefing over this ahead. 

P.S. -- Some of you newer readers have asked what the “SGRrrr” is: SGR stands for the (Un-)Sustainable Growth Rate (SGR) physician payment formula in Medicare, which all doctors hate. SGRrrr is simply the SGR expressed as a growl. 

*** Image from Flickr (Charles P.) ***

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