Something shocking happened on Capitol Hill today: Republicans and Democrats joined together to pass a bill! Not only that, it’s probably going to become law. We’re talking about the Medicare “doc fix,” a particularly odd piece of legislation Congress is required to pass again and again.
This time around, it required a bunch of last-minute maneuvering in the House, with the bill passing on a voice vote so no one would have to be accountable for voting for it, or voting against it, depending on which of your opponent’s attacks you’re worried about on a given day (here’s a description from Roll Call of the bit of legislative jiu-jitsu that was necessary). So what does this tell us about Congress, and about health care? One lesson is that when the interests of a powerful group like doctors are at stake, even a gridlocked Congress can hop to and accomplish something. But more importantly, it’s a reminder of why it’s so difficult for government to control health-care costs.
Since you may not know what the “doc fix” is, a brief explanation is in order. Back in 1997, Congress created something called the Sustainable Growth Rate (SGR) to set payments for doctors serving Medicare patients. The idea was that payments would grow along with the economy, but when health care costs grew far faster than economic growth, Medicare payments were worth less and less. So periodically, Congress passes a temporary “fix” to payment rates, allowing Medicare payments to keep pace with the growth in the actual cost of care. They do it again, and again, and again — this is the 17th doc fix passed since 1997.
So why can’t they just fix it once and for all? Well, that would require spending a whole bunch of money. If you pass a permanent fix, the CBO will tell you how much it’ll cost over ten years, and that would be a big number and you’d have to find an equally large amount of cuts or tax increases to offset it, and everyone would freak out. If you just pass a doc fix that lasts six months or a year, it’s a much smaller amount to deal with.
The underlying quandary is that we want to pay doctors a reasonable rate to serve Medicare patients, but we also want to bring Medicare’s costs down. Doing both at the same time is difficult. Now add the political context, where Medicare is extremely popular with its recipients, who also vote at very high rates. No member of Congress wants to get tagged for “cutting Medicare.”
It’s easy to say in the abstract, as Republicans in particular often do, that we must “deal with entitlements.” But once you get specific, “dealing with entitlements” gets both complicated and politically risky. There is, however, one piece of legislation that found large savings in Medicare. You might remember it — it’s called the Affordable Care Act. And the very same Republicans who say that we have to bring Medicare’s costs down turned around and skewered their Democratic opponents for “cutting Medicare” by voting for the bill, which did indeed find hundreds of billions of dollars in savings from the program, in part through cutting surplus payments to insurance companies, and in part through, yes, cutting some payments to doctors.
The ACA also contained ways to encourage a move away from the fee-for-service model, which drives up costs, toward a model where doctors and hospitals get paid for a whole body of care, and thus have an incentive to keep patients healthy and not perform unnecessary tests and procedures. It’s possible that in the coming years, we’ll see a transformation in care through that change in payments, and Medicare costs will slow dramatically. But in the meantime, we have to live with the reality that patients want care, doctors want to get paid, and none of it comes for free.