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Editorial: Fix the Medicare funding disparity

BY DI EDITORIAL BOARD | JULY 29, 2013 5:00 AM

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The Institute of Medicine released a new report last week on the geographic variation in health-care spending. Over the last three decades, researchers have documented significant disparities in how Medicare pays doctors and hospitals across various regions.

The existing geographic disparity in Medicare funds is certainly a grave issue that needs to be addressed immediately because it limits health-care quality in specific regions, such as Iowa.

Physicians in Iowa and other rural areas have for many years suffered from low Medicare reimbursement. On a per service basis, Iowa physicians are reimbursed considerably less than if that service had been provided in many other areas of the country.

Despite historically receiving some of the lowest reimbursements per enrollee per year, Iowa health-care providers have remarkably been able to keep our quality of care very high. However, the high standard may not be maintained for very much longer if the Medicare reimbursement is not increased.

Congress must act to reduce the effects of the Medicare funding gap.

The effects of a low reimbursement rate can be seen in a report by Iowa physician Michael Kitchell for the U.S. Senate.

That report cited as an example the McFarland Clinic, a multi-specialty group of physicians in Iowa that serves about 300,000 current patients, with 880,000 patients per year. Thirty-two percent of the clinic’s patients were enrolled in Medicare. However, because of the Medicare disparity, the clinic was forced to downsize from 192 physicians to 154. The group also had offices in 34 different sites in central Iowa but had to reduce that number to around 23.

Furthermore, the recruitment of physicians in Iowa is made more difficult because of comparatively low Medicare reimbursement.

Physicians are feeling the burden of an increased workload because of the pressure to see more and more Medicare patients and are thus becoming increasingly frustrated because of relatively low reimbursement, which makes it even more difficult to deliver good care to patients.

The difficulty in recruiting and retaining physicians negatively affects the ability of health-care providers to serve patients’ needs in a timely manner. Patients either have to survive long waits or even leave their communities to find the primary or specialty physician they need.

All these issues stem from an imbalance in Medicare funding. However, equity can be achieved. The Institute of Medicine made some recommendations for addressing the disparity in its report.

As stated in the report, Congress should encourage the Centers for Medicare & Medicaid Services to provide the necessary resources to make accessing Medicare and Medicaid data easier for research purposes. Better access to data could lead to smarter allocation of resources.

The most obvious way to remedy this situation is to geographically index Medicare funding, but the Institute of Medicine says such a plan could lead to major problems. The report suggests that such a system would do little to encourage efficiency and could unfairly reward inefficient providers in areas with a large number of Medicare enrollees.

Still, the alarming inequity in Medicare fees needs to be taken care of right away as the disparity is taking its toll on the quality of care that patients receive in Iowa.


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