Government and Regulations

WASHINGTON – The historically low growth in health spending in 2009 continued through 2010, driven largely by the recession, Centers for Medicare and Medicaid officials announced earlier this year.

U.S. health spending grew 3.9% in 2010, to a total of $2.6 trillion or $8,402 per person. That was a 0.1% rise from 2009, which was already at an all-time low growth rate.

As the nation’s economy slumped throughout 2009 and 2010, consumers cut back on elective surgical procedures, emergency room visits, physician office visits, and prescription drug use, according to the officials.

"Even though the recession officially ended in 2009, its impact on the health sector appears to have continued into 2010," said Anne Martin, an economist with the CMS.

Employers shifted the costs of insurance and care to employees, which drove up out-of-pocket spending in 2010.

But consumers overall spent only 1.8% more out-of-pocket in 2010 than they had in 2009, which was a slow rate of growth when compared with historical patterns, Ms. Martin said.

Consumers reacted to cost-shifting by choosing health insurance plans with lower premiums and higher deductibles, and by reducing, where they could, use of personal health care services. Medical prices and the U.S. population remained relatively stable before, during, and after the recession, and yet, personal health spending fell, indicating a willful pullback.

"The slower growth in personal health care spending was mainly driven by the slowdown in the use and intensity of health care goods and services," Ms. Martin said. The agency documented a shrinkage in use of hospital care and physician services as compared with historical levels.

Hospital spending grew only 5% to $814 billion in 2010, compared to 6% in 2009. There was a decline in median inpatient admissions, and slower growth in emergency department visits, outpatient visits, and outpatient surgeries.

Overall spending on physicians and clinical services – totaling $515 billion in 2010 – accounted for 20% of total health spending. As consumers went to the doctor less frequently, fewer prescriptions were written. And, many of those dispensed were for less expensive generic drugs. These and other factors led to the slowest rate of growth in prescription drug spending ever recorded – a 1% increase from 2009 to $259 billion. The data were published in the journal Health Affairs (2012 [doi: 10.1377/hlthaff.2011.1135]).

Growth in spending on physician and clinical services also was historically low, growing 2.5% in 2010 as compared with 3.3% in 2009, said Ms. Martin.

Meanwhile, as employers and private insurers reduced the amount they spent on health care, the federal government’s share of health spending rose – to 29% or a total of $742 billion in 2010. The rise in federal spending also was attributed to federal subsidies to state Medicaid programs. Medicaid was about 15% of the nation’s health bill in 2010, at $401 billion.

In 2009, the federal government spent 22% more than in 2008; in 2010, spending rose by almost 9%. That compares to a 10% decrease in spending by states and localities in 2008, and a 4% increase in 2010.

Medicare saw an increase in enrollment, both in Medicare Advantage managed care program and traditional fee-for-service Medicare. The increase in traditional enrollment reversed a several-year pattern of decline. Overall, Medicare spending increased 5% in 2010 to $524 billion, but per-enrollee spending did not rise as quickly as it had in 2009.

This is because there was a big reduction in payments for certain types of home health services, but also because of low use of physician services. Small increases in physician fees in 2009 and 2010 also kept a lid on Medicare spending.

Those increases were instituted by Congress in response to cuts that would otherwise have been required by Medicare’s Sustainable Growth Rate formula.

The Affordable Care Act had a negligible impact on overall spending, perhaps accounting for less than 0.1% of the slowdown, according to the CMS economists. This is because few provisions were in effect in 2010, and some, such as coverage for patients with preexisting conditions, did not enroll as many people as had been expected. ☐

WASHINGTON – The historically low growth in health spending in 2009 continued through 2010, driven largely by the recession, Centers for Medicare and Medicaid officials announced earlier this year.

U.S. health spending grew 3.9% in 2010, to a total of $2.6 trillion or $8,402 per person. That was a 0.1% rise from 2009, which was already at an all-time low growth rate.

As the nation’s economy slumped throughout 2009 and 2010, consumers cut back on elective surgical procedures, emergency room visits, physician office visits, and prescription drug use, according to the officials.

"Even though the recession officially ended in 2009, its impact on the health sector appears to have continued into 2010," said Anne Martin, an economist with the CMS.

Employers shifted the costs of insurance and care to employees, which drove up out-of-pocket spending in 2010.

But consumers overall spent only 1.8% more out-of-pocket in 2010 than they had in 2009, which was a slow rate of growth when compared with historical patterns, Ms. Martin said.

Consumers reacted to cost-shifting by choosing health insurance plans with lower premiums and higher deductibles, and by reducing, where they could, use of personal health care services. Medical prices and the U.S. population remained relatively stable before, during, and after the recession, and yet, personal health spending fell, indicating a willful pullback.

"The slower growth in personal health care spending was mainly driven by the slowdown in the use and intensity of health care goods and services," Ms. Martin said. The agency documented a shrinkage in use of hospital care and physician services as compared with historical levels.

Hospital spending grew only 5% to $814 billion in 2010, compared to 6% in 2009. There was a decline in median inpatient admissions, and slower growth in emergency department visits, outpatient visits, and outpatient surgeries.

Overall spending on physicians and clinical services – totaling $515 billion in 2010 – accounted for 20% of total health spending. As consumers went to the doctor less frequently, fewer prescriptions were written. And, many of those dispensed were for less expensive generic drugs. These and other factors led to the slowest rate of growth in prescription drug spending ever recorded – a 1% increase from 2009 to $259 billion. The data were published in the journal Health Affairs (2012 [doi: 10.1377/hlthaff.2011.1135]).

Growth in spending on physician and clinical services also was historically low, growing 2.5% in 2010 as compared with 3.3% in 2009, said Ms. Martin.

Meanwhile, as employers and private insurers reduced the amount they spent on health care, the federal government’s share of health spending rose – to 29% or a total of $742 billion in 2010. The rise in federal spending also was attributed to federal subsidies to state Medicaid programs. Medicaid was about 15% of the nation’s health bill in 2010, at $401 billion.

In 2009, the federal government spent 22% more than in 2008; in 2010, spending rose by almost 9%. That compares to a 10% decrease in spending by states and localities in 2008, and a 4% increase in 2010.

Medicare saw an increase in enrollment, both in Medicare Advantage managed care program and traditional fee-for-service Medicare. The increase in traditional enrollment reversed a several-year pattern of decline. Overall, Medicare spending increased 5% in 2010 to $524 billion, but per-enrollee spending did not rise as quickly as it had in 2009.

This is because there was a big reduction in payments for certain types of home health services, but also because of low use of physician services. Small increases in physician fees in 2009 and 2010 also kept a lid on Medicare spending.

Those increases were instituted by Congress in response to cuts that would otherwise have been required by Medicare’s Sustainable Growth Rate formula.

The Affordable Care Act had a negligible impact on overall spending, perhaps accounting for less than 0.1% of the slowdown, according to the CMS economists. This is because few provisions were in effect in 2010, and some, such as coverage for patients with preexisting conditions, did not enroll as many people as had been expected. ☐

WASHINGTON – The historically low growth in health spending in 2009 continued through 2010, driven largely by the recession, Centers for Medicare and Medicaid officials announced earlier this year.

U.S. health spending grew 3.9% in 2010, to a total of $2.6 trillion or $8,402 per person. That was a 0.1% rise from 2009, which was already at an all-time low growth rate.

As the nation’s economy slumped throughout 2009 and 2010, consumers cut back on elective surgical procedures, emergency room visits, physician office visits, and prescription drug use, according to the officials.

"Even though the recession officially ended in 2009, its impact on the health sector appears to have continued into 2010," said Anne Martin, an economist with the CMS.

Employers shifted the costs of insurance and care to employees, which drove up out-of-pocket spending in 2010.

But consumers overall spent only 1.8% more out-of-pocket in 2010 than they had in 2009, which was a slow rate of growth when compared with historical patterns, Ms. Martin said.

Consumers reacted to cost-shifting by choosing health insurance plans with lower premiums and higher deductibles, and by reducing, where they could, use of personal health care services. Medical prices and the U.S. population remained relatively stable before, during, and after the recession, and yet, personal health spending fell, indicating a willful pullback.

"The slower growth in personal health care spending was mainly driven by the slowdown in the use and intensity of health care goods and services," Ms. Martin said. The agency documented a shrinkage in use of hospital care and physician services as compared with historical levels.

Hospital spending grew only 5% to $814 billion in 2010, compared to 6% in 2009. There was a decline in median inpatient admissions, and slower growth in emergency department visits, outpatient visits, and outpatient surgeries.

Overall spending on physicians and clinical services – totaling $515 billion in 2010 – accounted for 20% of total health spending. As consumers went to the doctor less frequently, fewer prescriptions were written. And, many of those dispensed were for less expensive generic drugs. These and other factors led to the slowest rate of growth in prescription drug spending ever recorded – a 1% increase from 2009 to $259 billion. The data were published in the journal Health Affairs (2012 [doi: 10.1377/hlthaff.2011.1135]).

Growth in spending on physician and clinical services also was historically low, growing 2.5% in 2010 as compared with 3.3% in 2009, said Ms. Martin.

Meanwhile, as employers and private insurers reduced the amount they spent on health care, the federal government’s share of health spending rose – to 29% or a total of $742 billion in 2010. The rise in federal spending also was attributed to federal subsidies to state Medicaid programs. Medicaid was about 15% of the nation’s health bill in 2010, at $401 billion.

In 2009, the federal government spent 22% more than in 2008; in 2010, spending rose by almost 9%. That compares to a 10% decrease in spending by states and localities in 2008, and a 4% increase in 2010.

Medicare saw an increase in enrollment, both in Medicare Advantage managed care program and traditional fee-for-service Medicare. The increase in traditional enrollment reversed a several-year pattern of decline. Overall, Medicare spending increased 5% in 2010 to $524 billion, but per-enrollee spending did not rise as quickly as it had in 2009.

This is because there was a big reduction in payments for certain types of home health services, but also because of low use of physician services. Small increases in physician fees in 2009 and 2010 also kept a lid on Medicare spending.

Those increases were instituted by Congress in response to cuts that would otherwise have been required by Medicare’s Sustainable Growth Rate formula.

The Affordable Care Act had a negligible impact on overall spending, perhaps accounting for less than 0.1% of the slowdown, according to the CMS economists. This is because few provisions were in effect in 2010, and some, such as coverage for patients with preexisting conditions, did not enroll as many people as had been expected. ☐

Physicians will not face Medicare payment cuts this year, thanks to a compromise reached by members of Congress. But barring additional legislative action this year, doctors will see their Medicare payments cut by nearly a third come Jan. 1, 2013.

The House voted 293-132 to approve H.R. 3630, the Middle Class Tax Relief and Job Creation Act on Feb. 17. The Senate approved the measure shortly thereafter by a vote of 60-36; the President promised to sign the bill as soon as it reached his desk.

The legislation, which has been the subject of weeks of partisan wrangling, included an extension of both the payroll tax holiday and unemployment benefits.

The bill averts the 27% pay cut that was scheduled to take effect on March 1. The statutory cut is called for under the Sustainable Growth Rate formula, which ties changes in Medicare physician payments to the gross domestic product.

Physician organizations reacted to the news with a mixture of relief and disappointment.

The American College of Physicians, the American Academy of Family Physicians, the American College of Surgeons, and the American Osteopathic Association, chastised Congress for failing to use savings from the wars in Iraq and Afghanistan to finance a permanent repeal of the SGR.

Congress would have been able to eliminate all of the accumulated and future scheduled payment cuts created by the SGR if it had reallocated the Overseas Contingency Operations funds, they wrote in a joint statement.

"Like all of the many other short-term patches that Congress had enacted over the past 9 years, the agreement fails to provide the stability in Medicare payments needed to ensure patient access to care and to advance comprehensive payment reform," the coalition wrote.

Officials at the American Medical Association reacted similarly, saying that by enacting a short-term patch, Congress was once again "kicking the can, growing the problem and missing a clear opportunity to protect access to care patient."

The bill is even more disappointing for rheumatologists and endocrinologists who were hoping for a reprieve from cuts to dual-energy x-ray absorptiometry (DXA) testing reimbursement.

Under a 2-month payroll tax extension bill enacted in December, Congress approved a temporary extension of an Affordable Care Act provision that paid for DXA at 70% of the 2006 Medicare payment rate. Because H.R. 3630 does not include that provision, Medicare payments for DXA scans will drop from about $100 to $50 starting on March 1.

The legislation is funded at the expense of several federal health programs. To pay for the SGR fix and other provisions of H.R. 3630, lawmakers stripped $5 billion from the Prevention and Public Health Fund, an Affordable Care Act program that funds preventive health programs. The reductions are slated to start in September (fiscal year 2013).

Congress also reduced the amount that Medicare will pay hospitals, skilled nursing facilities, and certain health clinics to cover bad debts from beneficiaries’ unpaid coinsurance and deductibles.

Payments to clinical laboratories were cut by 2%.

Physicians will not face Medicare payment cuts this year, thanks to a compromise reached by members of Congress. But barring additional legislative action this year, doctors will see their Medicare payments cut by nearly a third come Jan. 1, 2013.

The House voted 293-132 to approve H.R. 3630, the Middle Class Tax Relief and Job Creation Act on Feb. 17. The Senate approved the measure shortly thereafter by a vote of 60-36; the President promised to sign the bill as soon as it reached his desk.

The legislation, which has been the subject of weeks of partisan wrangling, included an extension of both the payroll tax holiday and unemployment benefits.

The bill averts the 27% pay cut that was scheduled to take effect on March 1. The statutory cut is called for under the Sustainable Growth Rate formula, which ties changes in Medicare physician payments to the gross domestic product.

Physician organizations reacted to the news with a mixture of relief and disappointment.

The American College of Physicians, the American Academy of Family Physicians, the American College of Surgeons, and the American Osteopathic Association, chastised Congress for failing to use savings from the wars in Iraq and Afghanistan to finance a permanent repeal of the SGR.

Congress would have been able to eliminate all of the accumulated and future scheduled payment cuts created by the SGR if it had reallocated the Overseas Contingency Operations funds, they wrote in a joint statement.

"Like all of the many other short-term patches that Congress had enacted over the past 9 years, the agreement fails to provide the stability in Medicare payments needed to ensure patient access to care and to advance comprehensive payment reform," the coalition wrote.

Officials at the American Medical Association reacted similarly, saying that by enacting a short-term patch, Congress was once again "kicking the can, growing the problem and missing a clear opportunity to protect access to care patient."

The bill is even more disappointing for rheumatologists and endocrinologists who were hoping for a reprieve from cuts to dual-energy x-ray absorptiometry (DXA) testing reimbursement.

Under a 2-month payroll tax extension bill enacted in December, Congress approved a temporary extension of an Affordable Care Act provision that paid for DXA at 70% of the 2006 Medicare payment rate. Because H.R. 3630 does not include that provision, Medicare payments for DXA scans will drop from about $100 to $50 starting on March 1.

The legislation is funded at the expense of several federal health programs. To pay for the SGR fix and other provisions of H.R. 3630, lawmakers stripped $5 billion from the Prevention and Public Health Fund, an Affordable Care Act program that funds preventive health programs. The reductions are slated to start in September (fiscal year 2013).

Congress also reduced the amount that Medicare will pay hospitals, skilled nursing facilities, and certain health clinics to cover bad debts from beneficiaries’ unpaid coinsurance and deductibles.

Payments to clinical laboratories were cut by 2%.

Physicians will not face Medicare payment cuts this year, thanks to a compromise reached by members of Congress. But barring additional legislative action this year, doctors will see their Medicare payments cut by nearly a third come Jan. 1, 2013.

The House voted 293-132 to approve H.R. 3630, the Middle Class Tax Relief and Job Creation Act on Feb. 17. The Senate approved the measure shortly thereafter by a vote of 60-36; the President promised to sign the bill as soon as it reached his desk.

The legislation, which has been the subject of weeks of partisan wrangling, included an extension of both the payroll tax holiday and unemployment benefits.

The bill averts the 27% pay cut that was scheduled to take effect on March 1. The statutory cut is called for under the Sustainable Growth Rate formula, which ties changes in Medicare physician payments to the gross domestic product.

Physician organizations reacted to the news with a mixture of relief and disappointment.

The American College of Physicians, the American Academy of Family Physicians, the American College of Surgeons, and the American Osteopathic Association, chastised Congress for failing to use savings from the wars in Iraq and Afghanistan to finance a permanent repeal of the SGR.

Congress would have been able to eliminate all of the accumulated and future scheduled payment cuts created by the SGR if it had reallocated the Overseas Contingency Operations funds, they wrote in a joint statement.

"Like all of the many other short-term patches that Congress had enacted over the past 9 years, the agreement fails to provide the stability in Medicare payments needed to ensure patient access to care and to advance comprehensive payment reform," the coalition wrote.

Officials at the American Medical Association reacted similarly, saying that by enacting a short-term patch, Congress was once again "kicking the can, growing the problem and missing a clear opportunity to protect access to care patient."

The bill is even more disappointing for rheumatologists and endocrinologists who were hoping for a reprieve from cuts to dual-energy x-ray absorptiometry (DXA) testing reimbursement.

Under a 2-month payroll tax extension bill enacted in December, Congress approved a temporary extension of an Affordable Care Act provision that paid for DXA at 70% of the 2006 Medicare payment rate. Because H.R. 3630 does not include that provision, Medicare payments for DXA scans will drop from about $100 to $50 starting on March 1.

The legislation is funded at the expense of several federal health programs. To pay for the SGR fix and other provisions of H.R. 3630, lawmakers stripped $5 billion from the Prevention and Public Health Fund, an Affordable Care Act program that funds preventive health programs. The reductions are slated to start in September (fiscal year 2013).

Congress also reduced the amount that Medicare will pay hospitals, skilled nursing facilities, and certain health clinics to cover bad debts from beneficiaries’ unpaid coinsurance and deductibles.

Payments to clinical laboratories were cut by 2%.

Physicians are once again waiting for Congress to avert a 27% Medicare physician fee cut scheduled to take effect on March 1.

The pay cut was originally scheduled to begin Jan. 1, but after much back-and-forth in Congress, the House and Senate passed the Temporary Payroll Tax Cut Continuation Act of 2011 on Dec. 23, which included an extension of 2011 Medicare physician-payment rates through the end of February. President Obama quickly signed the bill into law.

Lawmakers also agreed to appoint a 20-member House-Senate committee to work on a longer-term plan to address the Medicare physician pay issue, along with a full-year extension of the Social Security payroll tax holiday and federally funded unemployment insurance benefits.

The agreement followed several days of brinksmanship by leaders in the House and Senate. It started on Dec. 13, when the House passed a bill that would have replaced the 27% Medicare fee cut with a 1% pay raise for physicians for 2 years. Despite bipartisan support for the so-called doc fix, other controversial provisions in the bill kept it from gaining traction in the Senate. A few days later, the Senate approved their own version of the bill, which extended the payroll tax holiday and unemployment benefits for 2 months and postponed any Medicare cuts until the end of February.

The House initially rejected a short-term fix, and even passed a resolution to formally disagree with the legislation passed by the Senate. But intense public criticism led House leaders to agree to the short-term plan and use the first 2 months of this year to negotiate a compromise.

Physicians remain furious with Congress for its inability to find a long-term solution in 2011. "There’s a tremendous degree of frustration out there," said Robert Doherty, senior vice president for government affairs and public policy at the American College of Physicians. "If Congress is expecting physicians to applaud them for agreeing to a 2-month extension, they’re going to find a lot of silence from the physician community."

Frustration is especially high because members of Congress had signaled early in 2011 that they were interested in crafting a long-term solution to replace the Sustainable Growth Rate formula, the statutory formula that ties spending on physicians’ services to the gross domestic product. In March 2011, leaders in the House Energy and Commerce Committee wrote to several physicians’ groups asking for proposals on how to reform the physician payment system and move to a new system that "reduces spending, pays providers fairly, and pays for services according to their value to the beneficiary."

The letter emphasized the need to act quickly in developing a long-term solution, or risk the "unwanted choice of extending a fundamentally broken payment system or jeopardizing access to care" for Medicare beneficiaries. "We cannot let either happen," the lawmakers wrote.

It’s too soon to tell what Congress will do next, but Mr. Doherty agreed that a long-term solution that would replace the SGR is unlikely right now.

In a worse-case scenario, physicians could be facing a situation similar to 2010, when Congress passed a series of temporary patches during the first half of the year, Mr. Doherty said. That situation could become a reality if lawmakers once again are deadlocked on the larger legislative package. "To a great extent, we’re once again going to be held hostage to negotiations over a broader package on issues that really have nothing to do with the SGR."☐

Physicians are once again waiting for Congress to avert a 27% Medicare physician fee cut scheduled to take effect on March 1.

The pay cut was originally scheduled to begin Jan. 1, but after much back-and-forth in Congress, the House and Senate passed the Temporary Payroll Tax Cut Continuation Act of 2011 on Dec. 23, which included an extension of 2011 Medicare physician-payment rates through the end of February. President Obama quickly signed the bill into law.

Lawmakers also agreed to appoint a 20-member House-Senate committee to work on a longer-term plan to address the Medicare physician pay issue, along with a full-year extension of the Social Security payroll tax holiday and federally funded unemployment insurance benefits.

The agreement followed several days of brinksmanship by leaders in the House and Senate. It started on Dec. 13, when the House passed a bill that would have replaced the 27% Medicare fee cut with a 1% pay raise for physicians for 2 years. Despite bipartisan support for the so-called doc fix, other controversial provisions in the bill kept it from gaining traction in the Senate. A few days later, the Senate approved their own version of the bill, which extended the payroll tax holiday and unemployment benefits for 2 months and postponed any Medicare cuts until the end of February.

The House initially rejected a short-term fix, and even passed a resolution to formally disagree with the legislation passed by the Senate. But intense public criticism led House leaders to agree to the short-term plan and use the first 2 months of this year to negotiate a compromise.

Physicians remain furious with Congress for its inability to find a long-term solution in 2011. "There’s a tremendous degree of frustration out there," said Robert Doherty, senior vice president for government affairs and public policy at the American College of Physicians. "If Congress is expecting physicians to applaud them for agreeing to a 2-month extension, they’re going to find a lot of silence from the physician community."

Frustration is especially high because members of Congress had signaled early in 2011 that they were interested in crafting a long-term solution to replace the Sustainable Growth Rate formula, the statutory formula that ties spending on physicians’ services to the gross domestic product. In March 2011, leaders in the House Energy and Commerce Committee wrote to several physicians’ groups asking for proposals on how to reform the physician payment system and move to a new system that "reduces spending, pays providers fairly, and pays for services according to their value to the beneficiary."

The letter emphasized the need to act quickly in developing a long-term solution, or risk the "unwanted choice of extending a fundamentally broken payment system or jeopardizing access to care" for Medicare beneficiaries. "We cannot let either happen," the lawmakers wrote.

It’s too soon to tell what Congress will do next, but Mr. Doherty agreed that a long-term solution that would replace the SGR is unlikely right now.

In a worse-case scenario, physicians could be facing a situation similar to 2010, when Congress passed a series of temporary patches during the first half of the year, Mr. Doherty said. That situation could become a reality if lawmakers once again are deadlocked on the larger legislative package. "To a great extent, we’re once again going to be held hostage to negotiations over a broader package on issues that really have nothing to do with the SGR."☐

Physicians are once again waiting for Congress to avert a 27% Medicare physician fee cut scheduled to take effect on March 1.

The pay cut was originally scheduled to begin Jan. 1, but after much back-and-forth in Congress, the House and Senate passed the Temporary Payroll Tax Cut Continuation Act of 2011 on Dec. 23, which included an extension of 2011 Medicare physician-payment rates through the end of February. President Obama quickly signed the bill into law.

Lawmakers also agreed to appoint a 20-member House-Senate committee to work on a longer-term plan to address the Medicare physician pay issue, along with a full-year extension of the Social Security payroll tax holiday and federally funded unemployment insurance benefits.

The agreement followed several days of brinksmanship by leaders in the House and Senate. It started on Dec. 13, when the House passed a bill that would have replaced the 27% Medicare fee cut with a 1% pay raise for physicians for 2 years. Despite bipartisan support for the so-called doc fix, other controversial provisions in the bill kept it from gaining traction in the Senate. A few days later, the Senate approved their own version of the bill, which extended the payroll tax holiday and unemployment benefits for 2 months and postponed any Medicare cuts until the end of February.

The House initially rejected a short-term fix, and even passed a resolution to formally disagree with the legislation passed by the Senate. But intense public criticism led House leaders to agree to the short-term plan and use the first 2 months of this year to negotiate a compromise.

Physicians remain furious with Congress for its inability to find a long-term solution in 2011. "There’s a tremendous degree of frustration out there," said Robert Doherty, senior vice president for government affairs and public policy at the American College of Physicians. "If Congress is expecting physicians to applaud them for agreeing to a 2-month extension, they’re going to find a lot of silence from the physician community."

Frustration is especially high because members of Congress had signaled early in 2011 that they were interested in crafting a long-term solution to replace the Sustainable Growth Rate formula, the statutory formula that ties spending on physicians’ services to the gross domestic product. In March 2011, leaders in the House Energy and Commerce Committee wrote to several physicians’ groups asking for proposals on how to reform the physician payment system and move to a new system that "reduces spending, pays providers fairly, and pays for services according to their value to the beneficiary."

The letter emphasized the need to act quickly in developing a long-term solution, or risk the "unwanted choice of extending a fundamentally broken payment system or jeopardizing access to care" for Medicare beneficiaries. "We cannot let either happen," the lawmakers wrote.

It’s too soon to tell what Congress will do next, but Mr. Doherty agreed that a long-term solution that would replace the SGR is unlikely right now.

In a worse-case scenario, physicians could be facing a situation similar to 2010, when Congress passed a series of temporary patches during the first half of the year, Mr. Doherty said. That situation could become a reality if lawmakers once again are deadlocked on the larger legislative package. "To a great extent, we’re once again going to be held hostage to negotiations over a broader package on issues that really have nothing to do with the SGR."☐

HOT SPRINGS, VA. – Since tort reform in Texas, the number of lawsuits and associated costs have decreased, but patient complaints to the state medical board and board investigations of physicians have risen, according to an analysis presented at the annual meeting of the Southern Surgical Association.

Dr. Ronald M. Stewart and his colleagues from the University of Texas Health Science Center at San Antonio obtained publicly available data from the Texas Medical Board and compared the 7-year period before tort reform (1996-2002) and the 6 years after the law was enacted (2004-2010).

The data were adjusted for the increase in the physician population; before reform there were about 170 physicians per 100,000 residents. After the law went into effect, the number rose to 195 physicians per 100,000, said Dr. Stewart. Before reform, about 125 complaints per 1,000 physicians were made to the medical board. That number increased by 13% after reform, to around 140 complaints per 1,000 physicians, said Dr. Stewart.

The rate of investigations increased from 38 per 1,000 to 52 per 1,000, with 5% of physicians the subject of a medical board inquiry. Postreform, there were more disciplinary actions when compared with open investigations, at about 8 per 1,000 in the latter period. Before reform, 0.5 per 1,000 physicians were ordered to revoke or to voluntarily surrender their licenses; after reform, that value rose to 0.8 per 1,000, a significant increase, noted Dr. Stewart.

The most striking change before and after reform was the decline in financial penalties. The state collected a total of $4.7 million in the postreform period. To put that figure into context, the San Antonio department of surgery alone spent $4.8 million on liability settlements in the prereform period, said Dr. Stewart.

It’s not clear why complaints and disciplinary actions went up, Dr. Stewart said. Having access to electronic information and greater awareness of the ability to complain to the medical board probably spurred more patient reporting.

The increases in investigations and disciplinary actions were mainly driven by the legislature, according to Dr. Stewart. The lawmakers mandated greater oversight by the medical board, so that undoubtedly led an enforcement increase.

Dr. Stewart said that putting malpractice in the hands of the medical board had decreased costs and been generally positive. For instance, he said, the medical board process is transparent and allows more input from stakeholders like physicians.

"There’s no question that the benefits of tort reform in my opinion outweigh the potential negative consequences to physicians," he said.

Dr. Stewart and Dr. Postier reported no financial conflicts. ☐

HOT SPRINGS, VA. – Since tort reform in Texas, the number of lawsuits and associated costs have decreased, but patient complaints to the state medical board and board investigations of physicians have risen, according to an analysis presented at the annual meeting of the Southern Surgical Association.

Dr. Ronald M. Stewart and his colleagues from the University of Texas Health Science Center at San Antonio obtained publicly available data from the Texas Medical Board and compared the 7-year period before tort reform (1996-2002) and the 6 years after the law was enacted (2004-2010).

The data were adjusted for the increase in the physician population; before reform there were about 170 physicians per 100,000 residents. After the law went into effect, the number rose to 195 physicians per 100,000, said Dr. Stewart. Before reform, about 125 complaints per 1,000 physicians were made to the medical board. That number increased by 13% after reform, to around 140 complaints per 1,000 physicians, said Dr. Stewart.

The rate of investigations increased from 38 per 1,000 to 52 per 1,000, with 5% of physicians the subject of a medical board inquiry. Postreform, there were more disciplinary actions when compared with open investigations, at about 8 per 1,000 in the latter period. Before reform, 0.5 per 1,000 physicians were ordered to revoke or to voluntarily surrender their licenses; after reform, that value rose to 0.8 per 1,000, a significant increase, noted Dr. Stewart.

The most striking change before and after reform was the decline in financial penalties. The state collected a total of $4.7 million in the postreform period. To put that figure into context, the San Antonio department of surgery alone spent $4.8 million on liability settlements in the prereform period, said Dr. Stewart.

It’s not clear why complaints and disciplinary actions went up, Dr. Stewart said. Having access to electronic information and greater awareness of the ability to complain to the medical board probably spurred more patient reporting.

The increases in investigations and disciplinary actions were mainly driven by the legislature, according to Dr. Stewart. The lawmakers mandated greater oversight by the medical board, so that undoubtedly led an enforcement increase.

Dr. Stewart said that putting malpractice in the hands of the medical board had decreased costs and been generally positive. For instance, he said, the medical board process is transparent and allows more input from stakeholders like physicians.

"There’s no question that the benefits of tort reform in my opinion outweigh the potential negative consequences to physicians," he said.

Dr. Stewart and Dr. Postier reported no financial conflicts. ☐

HOT SPRINGS, VA. – Since tort reform in Texas, the number of lawsuits and associated costs have decreased, but patient complaints to the state medical board and board investigations of physicians have risen, according to an analysis presented at the annual meeting of the Southern Surgical Association.

Dr. Ronald M. Stewart and his colleagues from the University of Texas Health Science Center at San Antonio obtained publicly available data from the Texas Medical Board and compared the 7-year period before tort reform (1996-2002) and the 6 years after the law was enacted (2004-2010).

The data were adjusted for the increase in the physician population; before reform there were about 170 physicians per 100,000 residents. After the law went into effect, the number rose to 195 physicians per 100,000, said Dr. Stewart. Before reform, about 125 complaints per 1,000 physicians were made to the medical board. That number increased by 13% after reform, to around 140 complaints per 1,000 physicians, said Dr. Stewart.

The rate of investigations increased from 38 per 1,000 to 52 per 1,000, with 5% of physicians the subject of a medical board inquiry. Postreform, there were more disciplinary actions when compared with open investigations, at about 8 per 1,000 in the latter period. Before reform, 0.5 per 1,000 physicians were ordered to revoke or to voluntarily surrender their licenses; after reform, that value rose to 0.8 per 1,000, a significant increase, noted Dr. Stewart.

The most striking change before and after reform was the decline in financial penalties. The state collected a total of $4.7 million in the postreform period. To put that figure into context, the San Antonio department of surgery alone spent $4.8 million on liability settlements in the prereform period, said Dr. Stewart.

It’s not clear why complaints and disciplinary actions went up, Dr. Stewart said. Having access to electronic information and greater awareness of the ability to complain to the medical board probably spurred more patient reporting.

The increases in investigations and disciplinary actions were mainly driven by the legislature, according to Dr. Stewart. The lawmakers mandated greater oversight by the medical board, so that undoubtedly led an enforcement increase.

Dr. Stewart said that putting malpractice in the hands of the medical board had decreased costs and been generally positive. For instance, he said, the medical board process is transparent and allows more input from stakeholders like physicians.

"There’s no question that the benefits of tort reform in my opinion outweigh the potential negative consequences to physicians," he said.

Dr. Stewart and Dr. Postier reported no financial conflicts. ☐