By Rafael Fernandez, Jr., MD
It’s a festive season in America and physicians are once again waiting with baited breath to see if our nation’s leaders will serve up another plate of disrespect as we head into 2023. Physicians are facing cuts in Medicare reimbursement of 8% in 2023. That is not an inflation adjusted reduction in reimbursement. That is 8% on top of our raging inflation. Only Congress can step in at this point and “save” physicians with the elimination of these devastating cuts. As I write this article it is uncertain if Congress will act to prevent a portion or all of the cuts.
While most of my colleagues may disagree, as an individual physician I hope that Congress does not act and lets the full weight of these cuts be realized. That may seem somewhat hyperbolic, but I would rather have the intent of our elected officials illustrated clearly in a single action, or lack thereof, rather than dragging out a decade’s long dance of small annual cuts that leads to the same effect.
This is not a new phenomenon for my colleagues and me. In fact, this is a 20+ year old recurring nightmare.
The core component of Medicare reimbursement is the conversion factor. That is the most significant weight applied to all procedures to calculate how much that procedure is ultimately worth. The conversion factor for physicians in 1998 was $36.6873. The conversion factor going into effect in 2023 is $33.0607. That is almost a 10% reduction in non-inflation adjusted value of physician services over the past 25 years.
When you consider inflation, the true magnitude of this reimbursement policy is revealed. According to the CPI Inflation Calculator, “the dollar had an average inflation rate of 2.54% per year between 1998 and today, producing a cumulative price increase of 82.64%. This means that today’s prices are 1.83 times as high as average prices since 1998, according to the Bureau of Labor Statistics consumer price index. A dollar today only buys 54.754% of what it could buy back then.”
Physicians are the only component of the Medicare program that does not have inflationary adjustments each year. As physicians we wonder how this discriminatory practice is allowed to continue.
We often look to other countries to compare and contrast health care delivery systems. The National Health System in the United Kingdom is currently being brought to its knees due to strikes over nursing and ambulance service funding. According to The Health Foundation, the average annual basic pay for nurses in the UK has gone down 5% in inflationary adjusted value since 2011. Can you imagine the outrage if those reductions were over 80% like those being felt by physicians in the U.S.?
Regardless of whether Congress acts or not, it is unlikely physicians will walk out on Medicare, but they are already running away from private practice, seeking shelter from these cuts in the form of employment by health systems and Corporate America. This penny wise and pound foolish approach has already done irreputable harm to health care delivery in this nation.
At the end of the day, while the devaluation of physician services alters physician practice patterns and behavior, it is the Medicare Beneficiaries who feel the real impact of this policy at the point of care. More of their doctors are now employees. They see mid-level providers most of the time. Physician visits are 5 minutes or less. And wait times to see specialists grow longer. Real reform is needed for physician reimbursement in Medicare. Not a last second stop gap measure that just delays the inevitable.
Dr. Rafael Fernandez, Jr. is President, Dade County Medical Association.
