Monday, February 05, 2007

President Bush’s Leveraging Health Care Supply & Demand to Hurt Medicare Recipients

Something doesn’t add up about the Bush economic health care plan. The President wants to leverage market forces to bring down health care costs. His Energy plans target increasing supply and controlling demand. When successful, prices come down until demand increases again.

One medical problem acknowledged by the President is a shortage of doctors. Yet, I’ve never heard Bush speak about increasing the number of physicians in his prescriptions for the ills of healthcare. If doctor supply is constrained then, the capacity to care for all Americans is limited.

How might the administration’s budget proposal impact Medicare beneficiary’s access to health care? First, the President included an automatic 8% cut in doctor payments. How might doctors shift their practice makeup in light of Medicare fee cuts? Will they reduce the portion of Medicare patients in their office practice?

Add that two thirds of American hospitals already lose money on their Medicare patients and where does that leave the beneficiary? Will they become less popular amongst providers, already constrained in supply?

My guess is a number of physician practices will not accept new Medicare patients should the President’s plans go through. By that time he will be a true lame duck. So who will take the blame, Republicans or Democrats? My guess there is both will deserve credit, as many leaders in both parties are in the hip pocket of health insurers and for profit hospital companies.

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