Because of exploding costs in Medicare, Congress placed a wage-control on doctors as part of the Balanced Budget Act of 1997. This so called Sustainable Growth Rate (SGR) tied physician payments in the Medicare program to health care inflation and the overall growth rate of the economy. (here) Each year thereafter, doctor payments should have decreased, but didn’t because Congress deferred the cuts.

Last year Congress finally addressed the SGR problem with a permanent “doc fix.” The fix, the Medicare Access and Children’s Health Insurance Program Reauthorization Act (MACRA), had bipartisan support and was hailed as a real Congressional accomplishment. The basic goal of MACRA is to link provider payments with quality measures as determined by government bureaucrats.

Although MACRA had bipartisan support, it had no funding mechanism. The non-partisan Congressional Budget Office estimated that MACRA would add $141 billion to the national debt over 10 years and $500 billion over 20 years.

Yesterday, a year after the law passed, the Center for Medicare and Medicaid released the specifics of MACRA. (here)  Essentially, providers have two pathway choices based on how much risk they are willing to assume. The first pathway is called the Merit-Based Incentive Payment Program (MIPS). This pathway would increase or decrease doctor payments by four percent depending on whether they meet quality benchmarks.

The second pathway uses advanced alternative payment models, where doctors assume more risk for bad patient outcomes, but are paid more if they meet quality parameters. Doctors can choose which pathway they want to use.

There are two fundamental problems with the 963-page MACRA ruling. First, both pathways push doctors into some type of accountable care organization or medical home. These are simply new names for the health maintenance organizations (HMOs) of the 1980s and 1990s. HMOs can certainly hold down health care costs, but they do so by a gate-keeper system that essentially rations health care.

The second problem is that government bureaucrats are now defining what quality is. For example, one quality measure is the use of electronic health records (EHRs).  It sounds great, but the reality is that physicians are finding EHRs to be cumbersome, interfere with patient contact and detract from time doctors could spend with more patients. (here)

Humans are not machines. Each person is different, even those with the same health problems and same diagnosis. It is not in the patient’s best interest to have unseen bureaucrats determining quality parameters for that person.