Can the next president rescue American health care?

Key Points

Port Lavaca, Texas, is more than 1,500 miles from Washington, DC, but for family practitioner Tim McFarland, MD, the distance seems to be growing every workday.

The way his small practice is positioned, McFarland relies on Medicare and Medicaid reimbursements for at least half of the patients he treats. But a chasm of convoluted Medicare policies and reimbursement schedules set by policy-makers in Washington is adversely affecting his business. Earlier this year, McFarland borrowed $70,000 to cover his operating expenses when Medicare reimbursements lagged behind at least six months because of changes in the payer's system. Not surprisingly, Medicare is one of several hot-button health policy decisions that McFarland–and many of his colleagues–hope to see addressed in this year's presidential race.

"For a small-town doctor, there are problems with the health-care system in the United States," he says.

Moreover, many in the medical community are looking to the next president to inspire systemic changes that will remove the obstacles that hinder quality patient care.

A study released in March by the Medical Group Management Association listed its top concerns:

Maintaining physician compensation in an environment of declining reimbursement.

Dealing with operating costs that are rising more rapidly than revenue.

Selecting and implementing a new electronic health record system.

Recruiting physicians.

Managing finances with the uncertainty of Medicare reimbursement rates.

Ted Epperly, MD, president of the American Academy of Family Physicians, says those five issues are adversely affecting patient care in the United States. And the biggest white elephant in the room has garnered little attention from either candidate.

"Medicare is an issue that has been met with silence on the part of both campaigns," he says.

As the nation's 75 million baby boomers begin to reach retirement age in 2011, McFarland and other physicians operating under Medicare find themselves facing steady financial pressure to balance patient care and their ledgers.

REIMBURSEMENT RATE CUTS STILL LOOM

Just this summer, 600,000 physicians who treat Medicare patients dodged a 10.6 percent pay cut, which is based on Medicare's cumulative pay formula known as the sustainable growth rate. Under the formula, cuts of about 5 percent are projected annually over the next few years.

In July, Obama joined 68 other senators to vote for a bill to prevent the pay cut. A few days later, the Senate voted 70-26 to override President Bush's veto of the measure.

McCain missed the votes on the Medicare legislation. He will have another chance to review the issue, as the president or as a senator, when a projected pay reduction of roughly 20 percent is scheduled for 2010.

The payment cuts would likely have immediate and long-term effects on access to health care. Nearly half of the more than 1,000 respondents to the March MGMA survey said they would have considered limiting the number or stopped treating Medicare beneficiaries if the 10.6 percent cut in Medicare reimbursements would have taken effect. Also, half of the respondents said they were considering reducing administrative and clinical staff, and more than two-thirds indicated they would forgo or postpone investments in health information technology.

Professor Regina Herzlinger of the Harvard Business School has seen the number of experienced physicians getting an MBA grow exponentially during the past three decades. That's because careers in primary care fields that were once considered profitable and rewarding are less so today, especially for many physicians who struggle with third-party payers.

Though righting the Medicare ship is needed sooner rather than later, it's too difficult to determine where the subject might rank among the new president's priorities, considering the wars in Afghanistan and Iraq, and the disarray in this country's financial markets, says Josie R. Williams, MD, a gastroenterologist and president of the 47,000-member Texas Medical Association, the largest state medical group in the nation.