Association of Independent Doctors (AID) Statement Regarding MedPAC Report
WINTER PARK, Fla. and WASHINGTON, June 18, 2013 /PRNewswire-USNewswire/ -- The Association of Independent Doctors (AID) issued a statement today, regarding the Medicare Payment Advisory Commission (MedPAC) Report on Medicare And The Health Care Delivery System released on June 14, 2013.[1]
AID's statement follows:
The MedPAC Report leads to two clear conclusions: First, high hospital charges have had a profound adverse impact on U.S. Government spending, and on costs to patients. Second, high hospital charges have contributed to market consolidation and reduced competition.
MedPAC confirms the already extensive evidence in the marketplace -- that hospital pricing is considerably higher than at freestanding (independent) physician practices. The Report notes, "in 2013 Medicare pays 141 percent more when a level II echocardiogram is provided in an OPD [hospital outpatient department] rather than in a freestanding physician's office."[2] A 15-minute office visit at an OPD costs Medicare 70% more, and the patient payment portion is also 70% more, than if the visit is to a freestanding physician office.[3] MedPAC notes, "Medicare and many private insurers pay higher rates for many services provided in OPDs relative to physicians' offices."[4]
MedPAC concludes,"If the same service can be safely provided in different settings, a prudent purchaser should not pay more for that service in one setting than in another."[5]
MedPAC correctly notes the adverse impact that high hospital charges have on both the U.S. Government, and on patients: "Because most services receive higher payment rates when provided in OPDs than in freestanding offices, the migration of services to OPDs results in higher program spending and beneficiary cost sharing without significant changes in patient care."[6]
MedPAC notes the urgency of addressing disparate prices -- and the relationship between high hospital prices, and a rapidly consolidating marketplace: "Payment variations across settings urgently need to be addressed because many ambulatory services have been migrating from physicians' offices to the usually higher paid OPD setting, as hospital employment of physicians has increased."[7] MedPAC further notes, "The growth of hospital employment of physicians is leading to higher spending by private plans outside of Medicare and higher cost sharing for their enrollees."[8]
The Report notes hospital-employed physicians and dentists grew by 55% from 2003 to 2011, and hospital-employed cardiologists tripled between 2007 and 2012.[9] Meanwhile, independent cardiologists during the period fell from 59% to 36%.[10]
The number of independent doctors (i.e., those not employed by hospitals), as a percentage of total doctors has declined from 57% in 2000, to a projected 36% in 2013,[11] while the number of hospital-employed physicians has skyrocketed.[12] More than 100,000 independent doctors have exited the practice or become hospital-employed.[13] This may be the steepest decline for small business, in any American industry.
The New York Times aptly summarized the MedPAC Report as follows:
"The Medicare Payment Advisory Commission said the current payment disparities had created incentives for hospitals to buy physician practices, driving up costs for the Medicare program and for beneficiaries. Hospital buyouts of doctors, turning independent practitioners into hospital employees, have also led to higher spending by private insurers and higher co-payments for their policyholders, the commission said."[14]
By pursuing the guidance set forth in the MedPAC Report, and lowering high reimbursements to hospitals, Congress can promote at least three important objectives: (1) reduce U.S Government spending; (2) lower cost of health care for patients when they seek health care services at hospitals; and (3) help level the playing field between hospitals and independent doctor practices, by alleviating marketplace distortions that contribute to hospital consolidation and excess market power.
About Association of Independent Doctors (AID)
The Association of Independent Doctors (AID) is a national trade association established to further the interest of independent doctors. AID was formed to educate patients, local businesses, legislators and regulators about the importance of independent doctors with regard to quality and cost of health care, patient choice, jobs, and the economy. More information about AID is available at: www.aid-us.org. AID is a 501(c)(6) entity.
[1] The full report ("Report") is at http://www.medpac.gov/documents/Jun13_EntireReport.pdf.
[2] Report at page xii.
[3] Report at p. 32.
[4] Report at p. 33.
[5] Report at p. xii.
[6] Report at p. 33.
[7] Report at p. 33.
[8] Report at p. 36.
[9] Report at p. 33.
[10] Id.
[12] Same Doctor Visit, Double the Cost, 08/27/2012, The Wall Street Journal. See http://online.wsj.com/article/SB10000872396390443713704577601113671007448.html.
[13] See footnote 11. (During period 2000-2013.)
[14] Medicare Panel Urges Cuts to Hospital Payments for Services Doctors Offer for Less, New York Times, 06/14/2013. See http://www.nytimes.com/2013/06/15/health/medicare-panel-urges-cuts-to-hospital-payments-for-services-doctors-offer-for-less.html?ref=health&_r=1&.
SOURCE Association of Independent Doctors (AID)
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