Most folks have heard that a large part of the purported savings in the House version of the healthcare bill comes from cuts in Medicare, specifically the Medicare Advantage program.
Another part of the savings are supposed to come from reduced reimbursement rates to providers. These reduced rates are already penciled into the bill and account for over $200 Billion of the savings.
Problem is, it's all smoke and mirrors. Every couple years this issue comes up because of the current medicare law.
Because Doctors and Hospitals are only breaking even or losing money on Medicare patients, further cuts are untenable. Providers and their lobbyists tell Congress that they will have to stop accepting Medicare patients.
So every couple years the Congress does what's called the 'Doc Fix', reinstating the reduced reimbursements.
The current Doc Fix was introduced (and passed in the House) as a separate bill, distinct from the 2000 page doorstop that is going to the conference committee. If they had been combined the health insurance bill would immediately be $210-247 Bil. in the hole. GAAP this is not.
First up a November story from Fox on the Doc Fix:
House OKs Democrats' Medicare 'Doc Fix' Over GOP Objections
The plan passed by a vote of 243-183 with only one Republican voting for it. But the bill is essentially dead on arrival since the Senate failed to pass its version it last month.
The House on Thursday approved the so-called "doc fix," a $210 billion plan to keep doctors who treat Medicare patients from experiencing severe cuts in their annual federal reimbursements.
The plan passed by a vote of 243-183 with only one Republican voting for it. But the bill is essentially dead on arrival since the Senate failed to pass its version last month. The House vote and public opposition from Republicans amounted to little more than political maneuvering as both sides sought to win the support of doctors in the health care reform debate.
The "doctor fix" would be paid by more federal borrowing for Medicare, a program already steep in debt. The plan would also add to the federal deficit, which hit an all-time high of $1.42 trillion in the fiscal year that ended Sept. 30....MORE
And what is the reality of health care financing? From Bloomberg:
The Mayo Clinic, praised by President Barack Obama as a national model for efficient health care, will stop accepting Medicare patients as of tomorrow at one of its primary-care clinics in Arizona, saying the U.S. government pays too little.
More than 3,000 patients eligible for Medicare, the government’s largest health-insurance program, will be forced to pay cash if they want to continue seeing their doctors at a Mayo family clinic in Glendale, northwest of Phoenix, said Michael Yardley, a Mayo spokesman. The decision, which Yardley called a two-year pilot project, won’t affect other Mayo facilities in Arizona, Florida and Minnesota.
Obama in June cited the nonprofit Rochester, Minnesota-based Mayo Clinic and the Cleveland Clinic in Ohio for offering “the highest quality care at costs well below the national norm.” Mayo’s move to drop Medicare patients may be copied by family doctors, some of whom have stopped accepting new patients from the program, said Lori Heim, president of the American Academy of Family Physicians, in a telephone interview yesterday.
“Many physicians have said, ‘I simply cannot afford to keep taking care of Medicare patients,’” said Heim, a family doctor who practices in Laurinburg, North Carolina. “If you truly know your business costs and you are losing money, it doesn’t make sense to do more of it.”>>>MORE
If you have any solutions, please send them to:
1600 Pennsylvania Avenue NW, Washington D.C. 20500
You may want to address it to President Barack Obama or Current Resident, this mess is going to take a while to fix.