December 19, 2007

Forget about that 10 percent reduction in Medicare reimbursements for physicians, scheduled to take effect January 1. Congress, reflecting the joy of the Holiday Season, is about to approve an increase of---roll the drums, please---0.5 percent. For six whole months!

Sigh. Does anyone believe that 0.5 percent will cover the increased costs borne by doctors over the last year? The increase in physician costs as reported in official data over the last five years are: 2.8 percent (2002), 2.7 percent, 4.0 percent, 3.3 percent, and 1.5 percent (2006). (See www.healthinflation.com.) Moreover, those data understate significantly the true increase in physician costs, as price controls both official and unofficial hide the true increase in the real economic cost of delivering physician services. And that is one central reason among many that physicians in increasing numbers are opting out of the Medicare market, leaving increasing numbers of Medicare beneficiaries with reduced access to actual medical care.

Maybe government compassion isn't all that it's made out to be. Always remember: The feds have interest groups rather than patients, and the cost of reduced access for actual patients is not something that shows up in government budgets or that yields direct political impacts relevant to political calculations. Patients, physicians, taxpayers, you name it: It's the opposite of Las Vegas. Everybody's a loser!

Posted by Benjamin Zycher at December 19, 2007 12:17 PM

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