We can't go on like this
The early months of 2009 have drawn us much closer to the heart of our nation's looming Medicare crisis. President Obama alluded to this fact when he recently spoke to a Joint Session of Congress, "To preserve our long-term fiscal health, we must also address the growing costs in Medicare..." This statement echoes previous comments made by our president in January when he told reporters for The Washington Post, "The big problem is Medicare, which is unsustainable....This, by the way, is where there are going to be very difficult choices and issues of sacrifice and responsibility and duty." The president and his advisers are looking at a wealth of recent data illustrating both a deepening of the challenges facing Medicare and a hastening of what some have called our "day of reckoning". Our current recession has reduced both our country's economic output and the tax dollars upon which both Medicare and Medicaid are based. In addition, the cost of medical care has continued to grow relentlessly and now threatens to overwhelm the ability of our nation to continue to provide care to tens of millions of our previously insured citizens, among them the poor and elderly.
Medicare was enacted in 1965 at a time when only about half of the elderly had any private health insurance, and this insurance generally only covered inpatient hospital costs. At the time of its creation, it was quite affordable and an excellent value for the nation. However, its relative cost to the country has risen inexorably. This rising torrent of spending is graphically illustrated to the left. (The pink line represents Medicare spending--the Hospital Insurance Trust and Supplementary Medical Insurance Trust-- while the blue line represents Social Security spending.)
Medicare's Hospital Insurance (HI) Trust Fund is financed primarily by payroll taxes, and these are woefully inadequate to keep pace with spending. Since 2008, HI has been spending more every year than its annual revenue, and the projected date of exhaustion of the HI Trust Fund is as early as 2016--or just 7 years from now. As of that date, dedicated revenue will only cover 78% of expected costs, and the percentage covered will decline annually thereafter. The harsh math of the situation is that the program can only be brought into balance by an immediate 134% increase in the payroll tax from 2.9 to 6.78% of payroll or an immediate 53% reduction in program spending to hospitals or some combination of the two.
The situation for physician spending by Medicare is no better. Physician payments are made by the Supplementary Medical Insurance (SMI) Trust Fund. This fund is financed by general federal revenue and enrollee premiums. Therefore, while there is no fear of trust fund exhaustion, the SMI continues to require an ever larger share of the federal budget. In 2007, the federal government paid $178 billion into the fund, and this amount is expected to balloon to $415 billion by 2017. This figure assumes that the federal government will cut physician payments by 21% in 2010 as required by the sustainable growth rate formula of federal law. (The AAOS and most other physician advocacy groups oppose this cut, and if it is not made, the problem will only become that much worse.) Even assuming this scheduled sustainable growth rate cut is made, the expected annual 6.5% increase in physician spending is, of course, well in excess of likely GDP growth or federal tax revenue growth, and as a consequence, Part B Medicare financing will consume an ever larger portion of the federal budget.
Current efforts in Washington to solve this pending Medicare disaster involve a complete overhaul of our nation's health care system. For example, President Obama stated in his February speech to a Joint Session of Congress that he hopes to solve the Medicare funding problem as part of a larger effort to solve our country's systemic health care crisis. The magnitude of this crisis, too, cannot be overstated. Last year, in 2008, per capita health care spending crossed over the $8000 threshold for the first time, and unless changes are made, this spending is expected to reach $9700 by 2013 and over $13,000 by 2018. Total spending, without changes to our system, will rise from $2.4 trillion in 2008 to an unimaginable $4.4 trillion in just 9 years. These accelerating costs are already profoundly impacting the health of our nation. According to a new Kaiser Family Foundation poll, 53% of Americans say that their household has cut back on needed health care over the past 12 months. Detailed findings reveal that over a third of those studied went without what they felt was a needed doctor's visit, one in five did not fill a prescription, and 15% said that they cut pills or skipped does to make their prescription last longer. A plurality of the public responded with cost concerns when asked what "health care reform" meant to them.
The issue for us then becomes our response to the economic crisis facing Medicare and our health care system. Some physicians advocate and societies recommend that we flex our muscles--refuse to treat Medicare patients--unless the government finds a way to keep paying us as at least as richly as it currently is. While we strongly doubt that most practicing orthopedists could afford to engage in such a job action, our society's response to such an idea is that it is both irresponsible and unreasonable. As this and other posts on our website clearly demonstrate, current payment practices cannot continue. Over time, not only will they bankrupt our country, they will drain money from every other government service. We cannot expect to receive an ever greater share of America's GDP for our work. As in any zero-sum situation, as we take more and more, less is left for everyone else. Furthermore, as is amply demonstrated on the post, An Historical Perspective, we, as orthopedists, continue to enjoy incomes far above the historical average for our profession. If inspirational historical figures in orthopedists could enjoy their profession for lower average salaries, so can we. While we take no comfort or joy in our outlook for health care financing, a cold look at current medical finances at both the state and federal levels convinces us that change is coming. We wish to advocate strongly that our primary duty during this period of tumult is to protect our patients; we must continue to put their needs first in any decisions regarding our professional lives. Our patients must continue to enjoy access to quality health care, and, therefore, we, as surgeons, must continue to provide that health care. We oppose any organized effort to use limited physician access as a lever or tool to extract greater income from the government. We support health care strategies, including those that limit provider income, that maintain access to quality health care for as many people as possible while the states and federal government work to resolve our looming and difficult health care crisis.