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Medicare Meltdown: Why You Should Care

Some 600,000 physicians are facing a 10.6% cut in Medicare payments beginning July 1.

Congress failed to pass a measure to block a steep reduction in the Medicare physician payment rate before adjourning for a weeklong July 4 recess. That failure allows a 10.6 percent cut to take effect on July 1 that could end up limiting or denying care to millions of Medicare beneficiaries. [AAFP News Now]

I reached out to Dr. Nancy Nielsen, the President of the American Medical Association, for comment. [Listen to the podcast]

Dr. Val: How will the Medicare cuts affect seniors in this country?

Dr. Nielsen: Because the 10.6% cuts to all physicians who see Medicare patients goes into effect today, we are really on the brink of a meltdown. Physicians say that a cut of this size will force them to make terrible choices, just to keep their practices open. In a recent survey, 60% of physicians said that the cuts would cause them to limit the number of new Medicare patients that they treat. This is the last thing we need at a time when baby boomers are aging into Medicare. It’s not why any of us went into medicine – to shut doors and turn patients away. So this is really, really painful.

Dr. Val: What do you say to those who claim that doctors are simply protecting their own salaries when opposing this cut?

Dr. Nielsen: We’re really not hearing that argument because people understand that this is about whether or not payments keep up with the costs of rendering care. At least 50% – 65% of income that comes into a physician’s office is spent on overhead. That includes rent, liability insurance, staff salaries, equipment and supplies. None of the manufacturers of hospital gowns or exam table paper are cutting the cost of those supplies to us by 10%.

When you’re spending up to two thirds of your income on overhead, you simply can’t tolerate payments that haven’t kept up.

Dr. Val: What can patients do to protect themselves from being denied access to medical care?

Dr. Nielsen: Patients need to understand that this issue is about them. We physicians embarked on careers in medicine to serve them, and we’re hoping that Medicare beneficiaries and military families will reach out to the senators who did not vote with us and tell them that this is a critical issue that needs to be fixed. The AMA has a Patient Action Network available online or by calling a toll free number: 1-888-434-6200. Individuals should contact us to take a stand against these cuts. Patient groups have been very supportive – the AARP and representatives from the disabled community and assisted living were with us pleading with the Senate to block the Medicare cuts.

Dr. Val: What is the AMA doing to protect access to healthcare?

Dr. Nielsen: The Medicare crisis is an access issue. It is the insurance that seniors depend on and that our country has promised them. We do not want a Medicare meltdown. The responsibility for this crisis lies with the Senate. We are hoping that the Senate will come back from vacation and do the right thing.

Last year the AMA embarked on an unprecedented campaign to encourage all Americans to put pressure on politicians to find a way to cover the uninsured. This is the other major access initiative that we’re promoting.

Dr. Val: What do you make of the “concierge medicine” movement where doctors — who are fed up with insurance — simply stop accepting it?

Dr. Nielsen: It’s a symptom of doctors becoming frustrated with bureaucratic red tape and payment problems. Many don’t feel that they have enough time to spend with their patients, and can’t afford to practice the kind of medicine they want to with insurance-based payments. Concierge practice is not a big movement, but there are some good physicians who have made that choice. We’re hoping that more physicians are not forced to stop taking insurance, but those who choose this route report being very happy, and so are their patients. The problem is that for patients who cannot afford concierge medicine, it’s not a solution at all.

Dr. Val: What would you like to say to the American public today about the Medicare cut crisis?

Dr. Nielsen: We need your help and we need it immediately. Please call your senators over the long weekend and plead with them to do the right thing and help us avoid a Medicare meltdown – a crisis that is not in anybody’s best interest.

[Listen to the podcast]This post originally appeared on Dr. Val’s blog at

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