16 July 2009

The Sustainable Growth Rate

It's a sign of exactly how big the health care reform bill that was handed down in the House that this did not make the Number One headline in the medical press:
It's Official: House Healthcare Reform Bill Scraps SGR -  MedPage Today
WASHINGTON, June 19 -- House Democratic leaders today unveiled a plan for healthcare reform that would overhaul the formula the government uses to calculate payments to physicians.

The draft bill, backed by Democrats in the three House committees with jurisdiction over healthcare, would replace the sustainable growth rate (SGR) with a new system that calculates payments based on care coordination and efficiency.

The new method "wipes away accumulated deficits, provides for a fresh start, and rewards primary care services, care coordination, and efficiency," according to a summary of the bill.
About time.

Now I would like to say that it's not clear at all what this means will be replacing the SGR formula.  I mean, I'm all for care coordination and efficiency, but how does one apply that to (for example) seeing a patient in the ER with a Boxer's fracture?  More to the point, will the new formula attempt to restrict the growth of physician expenditures as the SGR did?  This is what killed the SGR.  I never understood why Congress decided in 1997 that the rate of physician expenditure growth needed to be capped, but the costs for medical devices, hospitals, and drugs did not.   If they try to just stick another artificial cap on Part B expenses, we will just be in the same place in three to five years.

Yes, we need to reduce costs, no argument, but rigid and arbitrary restrictions on total expenses will not work. 

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