Public Policy Contributor Brad Flansbaum writes…
If there is one issue that unites physicians of virtually every stripe, it is the ongoing difficulties in resolving the SGR pay fix. While not to appear too disingenuous, as I like my salary as much as the next physician, there is a disconnect in our midst that also speaks to the unrest on display nationwide, beyond the healthcare sphere. As we demand our $250B, the cost of the shortfall, it is instructive to see how precarious the finances of our country are now and where that money will come from. Below is an illustration of the projected 2011 Federal budget:
By reviewing the receipts and the outlays, you will notice a deficit spend of over a trillion dollars. Mind you, that deficit spending will continue yearly for almost the next decade. What is most eye popping is the ratio of entitlement spending, dark red, which BY LAW, CANT BE TOUCHED, and the interest on our debt, in gray, which goes overseas to Asia (yes, China and Japan) to the remainder of our outlays.
Ergo, to balance the ledger, defense and nondefense spending are the sole provinces available for cutting, if the nation agrees that is the optimal strategy to achieve fiscal equilibrium. As the ax has fallen on defense expenditures for the past 30-40 years, and the need for funds to bolster the environment, education, science, infrastructure, etc., are in shorter and shorter supply, congress will focus on SSI and health payments.
To view it another way, in a more international context, view below from the CBO that compares our debt vs. GDP ratio to other OECD nations if we do not alter our course over the next decade:
- The United States faces a fundamental disconnect between the services that people expect the government to provide, particularly in the form of benefits for older Americans, and the tax revenues that people are willing to send to the government to finance those services.
- Therefore, putting U.S. fiscal policy on a safe path would require significant changes in spending, revenues, or both.
OK, so getting back to doctor pay and away from the Econ 101 lesson: essentially, if we want the SGR shortfall repaired, under PAYGO rules, either Congress finds offsetting cuts worth a quarter of a trillion dollars, or WE BORROW IT. From the vantage point of Joe Q. public—struggling, in debt–are doctors now benevolent victims or “special interest” feeders at the till “like pharma, MCOs, labor, and hospitals.” Putting our medical school debt and hours worked aside, this is not an easy query to answer. Congress feels the same way.
The dot-com boom in 1997 and the real estate bubble in 2006 bear similarities to 2010+ health care spending (and some doctor pay) of today. The medical industrial complex will eventually spring a big leak and I fear our specialty societies are advocating untenable positions that in some cases are neither realistic nor sustainable. In hindsight, that will become clearer unfortunately, and many professional groups are taking the penny wise, dollar poor approach in order to maintain their membership.
In my next post, I will address what is appropriate doctor salary, primary vs subspecialty care pay, and projected doctor workforce needs (hint : 125K additional doctors x average doctor wage + Medicare baseline spend = a lot more money we don’t have). Trust me, employers and beneficiaries on the commercial side will not make up the difference either—their screams concerning yearly premium increases are getting louder and their pushback stronger. IMHO, the oft-heard AMA refrain addressed to seniors in their press releases: “the SGR cuts will affect your access, call your legislator now” sound a lot more like, “physicians, you will be making less money, the good time days of the last forty years are coming to a close.” What is waste, what we can afford, who will take the hit…they are all up for debate, and it is going to get ugly.