Dr. Michael Schlitt, a Bellevue (Wash.) neurosurgeon, was so fed up with Medicare's price controls he quit taking payments from Uncle Sam in 1992. Even so, "I'm so busy I could add a partner tomorrow and still be overbooked," Schlitt says. Each year he operates on about 100 seniors eager for premium care who agree not to ask Medicare to cover his fees. In one case, he accepted a model ship as payment.
But doctors who can forgo Medicare payments are rare. The federal health program for the elderly provides about 30% of the average physician's gross income. Nor would many seniors want to pay medical bills without Washington's help.
So why is Washington fighting over "private contracting"--letting doctors cut deals in which seniors pay their own money for extra services? President Clinton threatened last summer to veto the budget bill over a GOP attempt to allow contracting, arguing that such deals would open the door to fraud. In revenge, Senate Republicans are holding up Clinton's nominee to run Medicare. "This has `firestorm' written all over it," says a GOP aide on Capitol Hill.
It's a storm fueled by politics, not by concern over seniors. Doctors don't need contracting to induce them to see Medicare patients. And, contrary to Clinton's protests, if some well-off seniors do pay for extra care, the system won't necessarily be corrupted. Nor should the average retiree suffer. The solution: Cut a deal to give patients some added flexibility and resolve this issue.
SIMPLE SOLUTION. The controversy stems from price controls Congress imposed in 1989. Medicare pays 80% of a set fee for each procedure, and doctors are barred in most cases from collecting more from patients than the remaining 20%.
As Congress took up Medicare reform this year, the Senate voted to ensure that seniors can buy premium care. When Clinton threatened a veto, the GOP compromised: Beneficiaries may buy care, but only from doctors who swear off all Medicare payments for two years. That restriction "renders the right to contract meaningless," fumes Senator Jon Kyl (R-Ariz.). He has introduced a bill to let doctors and patients decide which services will be billed to Medicare and which will be billed to the patient.
The GOP and its allies claim that Medicare's low fees are driving doctors out of the program. "You may be able to get care, but not from the doctor you might choose," warns William H. Mahood, a gastroenterologist in Abington, Pa., and an American Medical Assn. trustee. But studies by Congress' Medicare Payment Advisory Commission (MedPAC) show that 96% of physicians, excluding pediatricians, see Medicare patients. And 96% of seniors report no trouble finding care.
Many Democrats and groups such as the American Association of Retired Persons warn that private contracting would lead doctors to abandon patients who rely solely on Medicare. But Medicare is hardly stingy in today's competitive environment. For 409 of the 500 most common procedures, Medicare pays more than health-maintenance organizations in some areas, reports Atlanta-based Medirisk Inc.
It's hard to tell any Americans, let alone rich seniors, that they can't spend their own money as they please. The way out is simple: Allow contracting but insist that doctors accept tough regulations that monitor contracts closely. That way, Clinton could snuff Washington's latest firestorm in a hurry.