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Dr. Lishan Aklog: The Next Bubble – Medicare

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The breathtaking crisis in the financial markets has put this country’s healthcare crisis on the back burner. The price we are now being asked to pay for, having allowed the underlying problems to fester, is shocking. Like all recent bubbles (the dotcom bubble, the housing bubble, etc.) the path to the bottom should have been clear long before the bubble burst and the crisis exploded. That is why it is important to all of us, seniors in particular, to understand the precarious status of Medicare; the next bubble waiting to burst.

Medicare is a complex system with numerous structural problems that endanger its long-term existence. A core issue, however, is whether seniors will have access to physicians. Access relates directly to physician reimbursement under Medicare. This summer, physicians faced an automatic across the board 10.6% cut in Medicare reimbursement under the Medicare Sustainable Growth Rate (SGR) formula. These cuts have a domino effect as most payors peg their payments to physicians on the Medicare rate. The Medicare Improvement for Patients and Providers Act of 2008 (HR 6331) was introduced to reverse these cuts. Opposition to the act centered primarily on efforts to protect highly profitable private Medicare plans at the expense of seniors and their physicians.

Senator Barack Obama voted in favor of the act, joining all Democrats and nine Republicans in support of seniors and their physicians. Senator John McCain voted absent and thus HR 6331 fell one vote short. The 10.6% cuts took effect on July 1. Although the act passed in the House, Arizona’s entire Repulican congressional delegation (Reps. Shadegg, Renzi, Franks and Flake) voted against the bill, while the Democratic delegation (Reps. Giffords, Grijalva, Pastor and Mitchell) stood on the side of seniors and their physicians. The act was reintroduced a week later and this time passed by a veto-proof majority. Senator Edward Kennedy, who was still recuperating from brain surgery, made the trip to Washington to cast his vote. Senator McCain again voted absent.

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