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Blue Dogs took up the fight for doctors' pay as poor lose health coverage

By Steven Pearlstein
Wednesday, June 2, 2010; A10

The Blue Dogs want you to believe that, unlike those other profligate politicians, they really, really care about bringing the federal budget deficit under control, even in the midst of the worst economy in 75 years.

That's why the caucus of fiscally conservative House Democrats insisted last week that their party leaders strip out nearly $30 billion in funding for health-care coverage for the poor and the unemployed from emergency legislation extending jobless benefits. It's not that we're heartless, they explained, it's just that the country can't afford it.

All of which raises the question of why the Blue Dogs couldn't muster the same fiscal discipline when it came to spending $22 billion over the next three years to guarantee that American doctors, who are far and away the best-paid in the world, don't suffer any significant declines in their incomes just because of a little thing like a recession or a government budget crisis.

Given the choice between protecting high-income docs and economically struggling patients, those courageous Blue Dogs sided with the docs.

What the Blue Dogs have bought into, like many in Washington, is that physicians in private practice have a divine right to earn on average five times what their patients do.

The legislative expression of this divine right is the "doctor fix," a periodic budget ritual designed to override a 13-year-old law aimed at keeping Medicare spending growing no faster than the rest of the economy. The idea behind this spending cap is that it would encourage doctors to rein in growth in wasteful and unnecessary care because if they didn't, they would face reductions in fees they receive from Medicare for each visit and procedure.

What has happened instead is that the volume of medical services has continued to expand rapidly. But just as the automatic fee reductions are about to kick in, the American Medical Association comes rushing to Washington to demand that the fee cuts be suspended. The explicit threat from the AMA is that if its demands are not met, doctors will refuse to take Medicare patients, and the elderly will go untreated. Every time, Congress and the president have acceded to these un-Hippocratic ransoms. As a result, although Medicare physician fees haven't quite kept up with the other costs of running a doctor's office, this modest gap has been more than offset by the increased volume of services. Total physician income from Medicare has continued to rise.

None of that was mentioned by James Rohack, the president of the AMA, in his defense of the doctor fix on C-SPAN last week. He was quick to bring up those huge medical-school loans and, of course, the physician's bugaboo, those "skyrocketing" malpractice premiums. But somehow Dr. Rohack failed to mention the biggest cost of all for any medical practice: the generous salaries that physicians pay themselves.

The AMA, of course, doesn't want you to think of the doctor fix as just another government entitlement program for economically comfortable physicians. Nor do they want you to do the back-of-the-envelope calculation that shows that the fix works out to a benefit of $20,000 on average for the physicians actively participating in the Medicare program.

None of this would be particularly outrageous but for the fact that, at the same time the House was scraping together the $22 billion to pay for another "doctor fix" last week, it could not find $7 billion to continue providing subsidies to help those who had been laid off keep up with health insurance premiums under the COBRA program. Without those subsidies, premium payments for a family policy will typically consume 80 percent or more of a worker's unemployment check, according to Families USA, a liberal advocacy group.

Nor could House leaders find the $24 billion over the next year to extend a temporary increase in federal support for cash-strapped state Medicaid programs that provide health care for the poorest families. The likely result is that hundreds of thousands of people will be thrown off the program and forced to go without insurance.

Leadership on fiscal issues demands more than simply caving in to the politics of tea-ism. It requires the economic sense to know when to say no to deficit spending and the political courage to know what spending to cut. The Blue Dogs have recently shown neither. With unemployment still stubbornly high and most states facing massive budget shortfalls, cutting back on health care for the poor and the unemployed is at once shortsighted and mean-spirited.

The irony is, of course, that much of that money for Medicaid and COBRA would eventually have made its way into the hands of doctors and other health professionals. Instead, those clever Blue Dogs have found a way to get the docs the money to maintain their lifestyles, but without having to provide the extra care. That's a lousy set of policy trade-offs, one that a Democratic Senate, and a Democratic president, should have the wisdom to reject.

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