Wednesday, September 23, 2009

"Death Spiral" Rationing in Baucus Bill Gravely

For immediate release:
Friday, September 18, 2009

For more information:
Derrick Jones, (202) 626-8825

"Death Spiral" Rationing in Baucus Bill Gravely
Endangers America's Seniors

WASHINGTON – The health care bill proposed by Senate Finance Committee Chairman Max Baucus on September 16 contains a dangerous provision that creates a financial incentive for Medicare doctors to deny treatments to seniors.

National Right to Life Executive Director, David N. O'Steen, Ph.D, says, "This is the cruelest and most effective way to ensure that doctors are forced to ration care for their senior citizen patients. It takes the telltale fingerprints from the government: instead of bureaucrats directly specifying the treatment denials that will mean death and poorer health for older people, it compels individual doctors to do the dirty work. It is an outrageous way to provide coverage for the uninsured - by taking it away from America's senior citizens."

The provision penalizing doctors establishes that for at least five years, Medicare physicians who authorize treatments for their patients that wind up in the top 10% of per capita cost for a year will lose 5% of their total Medicare reimbursements for that year [see footnote 1 at bottom of release].

This means that all doctors treating older people will constantly be driven to try to order the least expensive tests and treatments for fear that they will be caught in that top 10%. It is noteworthy that this feature operates independently of any considerations of quality, efficiency, or waste - if you authorize enough treatment for your patients, however necessary and appropriate it may be, you are in danger of being one of the 1 in 10 doctors who will be penalized each year. Moreover, it creates a moving target - by definition, there will ALWAYS be a top 10%, no matter how far down the total amount of money spent on Medicare is driven.

“It's like a game of musical chairs, in which there is always one chair less than the number of players – so no matter how fast the contestants run, someone will always be the loser when the music stops,” O’Steen added.

The incentive this creates is purely cost-driven, without any balancing of benefit. It will create a constant sense of uncertainty in doctors, since none can know in advance precisely what the cutoff for a given year will be - resulting in still more pressure to limit treatment and diagnostic tests to the bare minimum.

For more information:


1. On pages 80-81 of the 8.16.2009 Chairman's Mark, in the "Expansion of Physician Feedback Program" in Title III, Subtitle A, Part I; specifically, at the top of page 81: "Beginning in 2015, payment would be reduced by five percent if an aggregation of the physician's resource use is at or above the 90th percentile of national utilization. After five years, the Secretary would have the authority to convert the 90th percentile threshold for payment reductions to a standard measure of utilization, such as deviations from the national mean."

The Congressional Budget Office (CBO) rates this as taking $1 billion from Medicare payments over a period of 6 years. See CBO 9/16/09 letter to Chairman Baucus, Table, page 3 of 7.

The National Right to Life Committee, the nation's largest pro-life group is a federation of affiliates in all 50 states and 3,000 local chapters nationwide.

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