The Risk of a Physician Boycott of Medicare, Congress' Duty, Enterprise Risk Management & What MedPAC Should Do

The Disease Management Care Blog thinks of Medicare as a large health insurance company overseen by a Board of Directors that just also happens to be called "Congress." As a Board, Congress' job is to provide oversight, including approving the benefit, premium levels and the provider fee schedules. Like other Boards, it's also supposed to be ultimately responsible for the appointment of executive leadership. Last but not least, it should engage in "enterprise risk management" (ERM). More on this later.

Medicare's "Board" has struggled with the cumulative costs of repeatedly delaying the Sustainable Growth Rate (SGR) reductions for the Part B fee schedule. A perfect storm of election year politics, deficit spending concerns and partisan brinkmanship has led to another "temporary fix" of the scheduled 21% cut. The day of reckoning has been pushed back to November 30, 2010. While grumpy organized physician organizations are publicly concerned about the SGR's impact on patient "access" and "choice," the real threat is that many physicians who currently accept Medicare will "go Texan" and boycott the Medicare if the SGR goes through.

Should Medicare's "Board" be concerned?

As the American College of Physician's* (ACP) Advocate Blog's Bob Doherty points out, physicians have been repeatedly warning for years that Medicare's payment rates are unsatisfactory. In the meantime, the Medicare Payment Advisory Commission (MedPAC), which uses surveys of Medicare beneficiaries to gauge whether physicians really really mean it, remains unmoved. According to MedPAC's data, the vast majority of Medicare beneficiaries still have adequate access and most docs still accept Medicare. Liberal pundits, such as Maggie Mahar, think that threat of a physician boycott is an "overblown" paper tiger unsupported by facts on the ground involving real docs, like hospitalists, cardiologists and geriatricians.

Yet, the ACP's Bob Doherty wonders if things could be different this time. His anecdotal conversations with docs makes him think that substantial - if unquantifiable - numbers of physicians are really thinking about dropping out of Medicare.

Which brings the DMCB back to the topic of "ERM." This is defined as the systematic and objective quantification of all significant risks to a business. ERM typically includes identifying what risks exist, their individual likelihood, their potential magnitude, strategies for their mitigation and assessing progress in keeping them at bay.

Congress' Medicare ERM issues are multiple and include the growing number of baby boomer beneficiaries, their considerable appetite for pricey technology, looming government debt and the involvement of sophisticated organized crime networks in Medicare fraud. But one important risk that continues to languish is the SGR and the potential for a physician backlash.

The DMCB thinks Medicare's Board, i.e., Congress should perform its fiduciary duty and use ERM to carefully examine the issues raised by Mr. Doherty.

What is the risk of a physician boycott?

While the prospect of a wholesale nationwide exodus of physicians from Medicare participation is still small, it is not zero and, given Mr. Doherty's credible suspicions, the risk is growing. The risk is probably greater among the smaller physician owned practices with access to alternate sources of patient care income. It's likely to first show up in refusals to accept new Medicare patients. It'll occur regionally (Texas may be a good example) and vary by practice specialty. The risk is highest among the "cognitive" physicians who a) can't make up for lost revenue with additional patient volume, and b) are dealing with payment rates that have been widely regarded as inadequate.

What is the potential magnitude?

There are two dimensions: operational and political.

It's operationally moderate because of two factors:

1) the relationship between the threat of an SGR reduction and a physician boycott is not linear. While current physician Medicare non-participation rates are low, reaction to inadequate payment rates could quickly cascade under a classic self-reinforcing phenomenon. This is discussed by the DMCB in greater detail here,

and

2) the interplay between spotty regional access issues and other parts of the health care system - even if access is maintained - could lead to further stressors. While low numbers of Medicare beneficiaries per primary site may not be able to receive primary care, the phenomenon at a regional level across multiple sites could easily lead to delays in care, emergency room crowding and spikes in avoidable hospitalizations.

It's politically high because even spotty regional access problems could be spotlighted by the news media and used by opponents of health care reform to further gum up the President's agenda.

How can it be mitigated?

It's going to take either a) finding new money or b) moving money from other sources. That's the topic for another DMCB post but two additional points should be made:

1) thinking that "savings" from efficiencies, prevention, wellness or the electronic medical record, medical home and accountable care organizations demos and pilots will solve the SGR is fanciful thinking. Don't even bring it up, because the doctor-audience won't believe you. They're too smart.

2) Just the threat - real or not - of an SGR reduction is undoubtedly causing physicians to plan for the possibility of a boycott. Accordingly, "the SGR" needs to be removed from the public spotlight and replaced by a credible signal that Congress and the Administration are taking Medicare payment rates seriously.

How should progress be measured?

In addition to regularly reading the ACP and DMCB blogs (and being skeptical about the can-do-no-wrong loyalty of liberal media sycophants), MedPAC should reinvigorate its reports (like this one that said no problem) and reexamine access from the perspective of ERM with special attention to specialty, region, practice size, non-linearity and worse case scenarios.

The Federal government failed to adequately assess the environmental risks of deep water oil drilling and the systemic financial risks from the easy money and housing bubble. It's not unreasonable to ask if MedPAC is on the verge of committing the same mistake in a key part of healthcare policy.

(Addendum: Interested in this debate? There's more here)

*an organized physician group that represents internists, who focus on prevention, diagnosis, and treatment of adult diseases. The DMCB not only a proud member of the AMA, it is an internist and an ACP Fellow.