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The “Doc Fix” – Kicking the Can Down the Road

Last week, President Obama signed legislation known as the “doc fix.”  It reinstated the reimbursement rates for doctors who are treating Medicare patients.  However, the “fix” was extended only until November 30, 2010, a short six months away. Instead of doctors being subject to a 21% reduction payments for Medicare treatments, they will receive a 2.2% increase.

The bill was viewed as a “fix” to a problem, because doctors were threatening to stop treating Medicare patients or not accept new patients.  There is already a shortage of doctors, and with the millions of baby boomers ready to enroll in Medicare, this could be a disastrous situation.  If you want more background on the “doc fix” issue, Austin Frakt wrote a good summary piece you can read.

Issues regarding Medicare, cost shifting and the new health care bill will be reserved for another day.  What I want to tackle is the lack of leadership for fiscal matters that exists in our current political leaders… on both sides of the aisle.

Who do you think created the problem with the Medicare reimbursement rates to begin with?  It was the US Congress.  This accounting gimmick has been used many times in the past to disguise the real cost of Medicare.  Congress writes legislation mandating cuts in Medicare payments, only to reduce or reinstate them before they take effect.  This time they were late by about three weeks, but true to form, they retroactively reinstated the payments… and increased them by 2.2%.

Unfortunately, much of the media glossed over this subject in the fierce debate over the health care reform bill that eventually passed Congress in March.  In order for the proponents to meet their cost estimates, they assumed the reduction in Medicare rates would occur.  If they had included the “doc fix,” they would have needed to include another $245 billion of costs for the next decade.  Opponents argued the costs should be included since the reduction would not happen.  Last week they were proven correct.

Before you get all worked up, I’m not arguing in favor of these cuts.  What I’m addressing is the political game that is being played with our money.  It is not a coincidence that the “doc fix” expires on November 30, which happens to be a few weeks after the next election.  What do you think the chances are that they will pass yet another temporary fix?

To me, this issue is a glaring example of our political leaders’ approach to the fiscal matters of the country.  Instead of dealing with difficult issues and making politically unpopular decisions, they kick the can down the road. 

Good leaders don’t pass the buck to someone else, nor do they defer difficult and potentially unpopular decisions until after their next re-election.  Great statesmen (and women) make the necessary sacrifices to do what is best for the country, even if they lose the next election.  How many current politicians do you think are willing to make that choice?

Kicking the can down the road doesn’t work for you, and it won’t work for the government.  The “doc fix” may have “fixed” the problem for the moment, but it will come back again in November.  It won’t be any easier to address in November than it was last week.  Tough decisions need to be made, and the sooner we make them, the less painful it’s likely to be.

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