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Health care demands higher taxes, expert says

This article first appeared in the St. Louis Beacon, Feb. 16, 2009 - Americans must eventually stomach higher taxes if they hope to provide health care to the uninsured as well as keep Medicare afloat for retiring Baby Boomers, says the head of a major medical association.

William Jessee, president of the Denver-based Medical Group Management Association, spoke to health-care administrators at a chapter luncheon last week (Feb. 11) in Frontenac. Adding a dose of optimism to his forecast, Jessee, a preventive medicine specialist, said the nation could get more bang for its health-care buck by reducing administrative inefficiencies with something as simple as a patient ID card with a magnetic stripe.

The MGMA is comprised of administrators in almost 14,000 organizations representing about 275,000 physicians.

Jessee told his audience of 200 that the nation's uninsured -- 45 million and growing in the economic downturn -- strain not only hospital emergency departments but office-based physicians. Providers who provide uncompensated care simply pass on the cost to insured patients, he said.

"As long as we have the uninsured, we are paying a hidden tax," Jessee said. "It's better to increase taxes outright and provide coverage for the uninsured."

Medicare also will require more funds to meet the needs of the massive Baby Boom generation that will begin to enter the program in 2011, he said. In 10 years, Medicare is projected to go broke in light of increased demand. "The demographics are scary," he said. "We will need to raise the Medicare tax, or the (beneficiary) premiums, or both, if Medicare is to stay solvent."

Another problem to solve, he said, is how Medicare pays physicians. The program's reimbursement rates are only 1.1 percent higher than they were in 2001, and private insurers tend to use Medicare as a benchmark. The growing gap between paltry reimbursements and rising practice costs is a big reason more self-employed doctors are seeking the refuge of hospital employment, Jessee said. And a planned 21 percent cut in Medicare rates in 2010 will only cause doctors to treat fewer Medicare patients.

Jessee said that the federal government is experimenting with new formulas for Medicare reimbursement that are based not just on services rendered, but the quality of care. It's a work in progress, though, thanks to bureaucratic rigmarole.

A Medicare program called the Physician Quality Reporting Initiative paid $600 on average to participating physicians in 2008, he said, but most of them had to spend more than $600 on reporting the quality measures they met, such as counseling patients to quit smoking.

Medicare is coupling rewards for quality care with penalties, Jessee added. Last year, Congress passed a law giving doctors a 2 percent bonus in 2009 for transmitting prescriptions to a pharmacy electronically for their Medicare patients. However, the law reduces their pay -- initially by 1 percent -- if they aren't e-prescribing by 2012.

The economic stimulus package recently approved by Congress takes a similar approach toward electronic health records, Jessee said. The legislation gives doctors in the Medicare program up to $44,000 over five years if they purchase an EHR (electronic health records) system, but cuts their pay if they're still using paper charts by 2015.

Politicians and health-care policy experts view electronic records and electronic prescribing as one way to lower administrative costs, which Jessee put at 30 percent of all health-care outlays. "We spend more on administration than any other country in the world," he said. "In Taiwan, it's only 2 percent."

Jessee said the United States can come closer to Taiwanese efficiency if it replaces the traditional insurance card that patients carry with one bearing a magnetic stripe -- think credit card -- that stores demographic and coverage information. Doctors and hospitals now photocopy traditional ID cards and manually enter the data into their computer systems, inviting errors.

In January, the MGMA launched a campaign dubbed Project SwipeIT to persuade insurers, hospitals, doctors and medical software vendors to retool for standardized magnetic-stripe ID cards. The association estimates that such cards could save hospitals and doctors $1 billion a year.

Magnetic-stripe cards may seem like only a minor fix for health care, but Jessee foresees no major fixes soon while the country is in a major recession. "The economy hangs over everything," he said. "The likelihood of seeing significant health-care reform is low over the next couple of years."

In an interview after his talk, Jessee said that prospects for reform suffered when former Sen. Tom Daschle withdrew as a nominee for secretary of the Department of Health and Human Services earlier this month.

"He was uniquely qualified not only because he's studied the issue of health care reform, but because of his relations on the Hill," Jessee said. Congress "wanted to work with this guy. His withdrawal will slow things down a lot."

Robert Lowes is a local freelance writer who specializes in health issues.

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