Health Care Reform Update: Blue Dogs Do Some Things Right
by Alta Price, M.D.As health care reform bills move through Congress over the next few weeks, different factions will negotiate changes to make the bill more beneficial to their constituents, or, in some cases, their donors. We progressives reflexively assume the Blue Dog Democrats will try to weaken or eliminate the public insurance option. I believe that some of the changes the Blue Dogs want in the public option are good for Iowa, other rural areas, and more fair than what some progressives demand. And I don’t believe I hold this view just because I am an Iowan or a physician. In fact, I have heard Howard Dean state several times that he thinks the Blue Dogs have improved HR 3200. Howard may be a physician and from a rural state, but no one has done more to champion our cause or to lead the fight for a strong public option.
The whole problem stems from the fact that Medicare unfairly underpays rural physicians. Many Blue Dog Democrats come from rural areas and their constituents suffer under this system. Tying provider payments in the public option to Medicare rates makes a bad problem even worse.
I have touched previously on the shortage of physicians in rural areas. The issue is complex and I want to give you a basic understanding, so I am going to oversimplify this somewhat. Also, although I am going to only talk about doctors, rural hospitals and other providers have similar problems with Medicare.
Medicare pays doctors a fee for services, and this fee varies from area to area. This variation in based on an estimate of “practice costs” – Medicare pays more to doctors in areas where it costs more to practice. In theory, that is. In reality, the formula Medicare uses is based heavily on what it costs to rent office space in an area, but that is only a small part of practice costs. Medical equipment, supplies, and malpractice insurance are at least as expensive in rural areas. In fact, medical economists have consistently found that it actually costs more to practice in a rural setting than in urban or suburban settings, even though Medicare pays rural doctors about 30% less. Meanwhile, 20% of our population lives in rural areas, but only 9% of doctors are willing to put up with the low reimbursement and hectic life style of a rural practice. Compounding the problem for rural doctors, a higher percentage of their patients are on Medicare, at least in Iowa (and I presume in other rural states).
Doctors in these areas have been trying for years (even decades) to correct the flawed formula that Medicare uses to calculate practice costs. But since rural areas have fewer representatives in Congress, efforts to correct the problem have been unsuccessful. Why? If we are getting an unfairly low amount, doctors in urban areas are getting an unfairly high amount. Representatives from urban or suburban areas don’t want to cut Medicare payments to their districts’ doctors.
So along comes HR 3200, a good bill in general, but not perfect. Not only is there no fix for the flawed Medicare payment formula for rural doctors, now the public option payments and Medicaid payments are all going to be based on Medicare rates. I actually think it is great to tie Medicaid rates to Medicare, because in far too many states Medicaid pays so little that providers won’t take Medicaid patients. One good thing about Iowa is we pay reasonable rates for Medicaid (even though it is less than Medicare). Illinois, on the other hand, pays very little to providers who care for its Medicaid patients.
Now as my good activist friend, Karen Metcalf, points out, “someone has to be 50th in reimbursement for Medicare.” But we both agree that it is not fair for the same doctors to be last in Medicare, last in public option payments, and last in Medicaid payments! It is especially unfair if it is based on a formula of practice costs that is flawed in the first place. And it will not be good for patients who live in rural areas either, because they aren’t going to have enough doctors.
The Blue Dogs generally come from rural areas and know about this problem. They figure this is their one chance to get it fixed. Representative Bruce Braley, a true progressive, has been tireless in his efforts to get a fix for the flawed Medicare formula that penalizes Iowa. And the Blue Dogs are his allies in this fight. The fix most likely will be requiring Medicare to calculate actual practice costs in different settings and correct Medicare payments to reflect those costs.
We are confident that Medicare will agree that rural doctors need higher payments. In order to get enough votes, the fix will probably have to include a provision that the doctors getting more from Medicare now won’t get their payments cut; in other words, rural doctors would just get their payments raised. Presumably over time rural doctors might see their payments go up more quickly, possibly eventually exceeding urban payments if indeed rural practice costs are higher. In the meantime, I agree with the Blue Dogs it is not a good idea to have public option payment rates tied to Medicare rates. Of course this makes the public option more expensive. But I don’t think we should save money by unfairly underpaying doctors in the very areas we need doctors the most.
AltaPrice is a physician practicing Pathology in Davenport, Iowa. One of
the original Deaniacs, she stays involved with Democracy for America,
Iowa, and the Quad Cities. She advocates for quality, affordable health
care for all, primarily as a volunteer with Progressive Action for the
Common Good (Health Care Reform Issue Forum). Watch for Dr. Price's Health Care Reform Update every Tuesday here on Blog for Iowa. E-Mail Alta Price
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