Sustainable Growth Rate

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Kaiser Health News reports:
The House GOP leadership’s agreement to a Senate proposal averts a 27 percent paycut to doctors scheduled to take effect in January. The deal delays the cut until March 1, and lawmakers hope to hammer out an agreement on a longer-term fix to the payment formula before then.

As I previously noted, this delaying the cut to physician payment is not a long term fix. Either Medicare should remove the sustainable growth rate (SGR) provision and acknowledge the fiscal impact of paying doctors more or they should impose the SGR or (more likely) a modified SGR.

The current two month delay makes it seem as if Congress will cut Medicare payments to physicians by 27 percent on March 1, 2012, even though this will of course not happen.

With respect to the ‘doc fix’ issue, more transparency is needed.

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The Healthcare Economist is going on vacation for the next week.

In the meantime, I pose to you, my reader, a bet.  Do you think the ‘doc fix’ gets passed?  Before you read on, make your predictions in the comments section below.

Healthcare Economist’s Prediction

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In 1998, Medicare enacted the sustainable growth rate (SGR) which would slowly bring down Medicare physician compensation.  However, each year, it gets reversed by Congress. Now, instead of a gradual decline, the implementation of SGR would  result in a 21.2% pay cut for Medicare docs.

Before the Thanksgiving holiday, however, Congress once again reversed the SGR.  Megan McArdle gives some solid reasons of why the reform of the SGR should be included in any health reform bill.


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