As the “fiscal cliff’ looms in the nation’s near future, many in the medical community are expecting the effects of spending cuts to ripple directly through to Medicare funding.
If Congressional leaders and the White House don’t take action on the expiring “Bush income tax cuts” and other tax breaks by New Year’s Day, Texas Medical Association President Michael Speer anticipates a 30-percent cut in Medicare payments to physicians and patients.
“On New Year’s Day, physicians’ Medicare payments will be slashed almost 30 percent, affecting 2.8 million Medicare patients in Texas and more than 870,000 military families who receive health care coverage through TriCare,” Speer said in a news release. “The uncertainty of Medicare also affects jobs of more than 240,000 employees of medical practices in the state.”
In the Permian Basin, Dr. Gary Ventolini said private physicians will see the most cuts.
“If they don’t solve it, it is going to be a big problem,” said Ventolini, regional dean of the Texas Tech University Health Sciences Center School of Medicine of the Permian Basin.
Because TTUHSC is a public university that also runs a public clinic, Ventolini said many of the patients at Texas Tech clinics are supported by Medicare.
If Medicare funding is cut to the clinic, Ventolini said overhead costs to run the clinic will most likely grow.
“It’s not like you can say to your staff, ‘Now we’re going to have a cut of 23 percent of Medicare, and I’ll cut supplies by 23 percent, rent by 23 percent and salaries by 23 percent,’” Ventolini said. “We have to find ways to supply the reduction of money we receive from the state.”
In private practices, Ventolini said the fiscal cliff could cause physicians to reduce the number of Medicare patients they treat.
“They’ll have to limit the number of Medicare patients they see and see more private or paying patients to help cover overhead,” Ventolini said.
Ventolini said cuts to Medicare will also cause a shortage of physicians trained in public universities. If the physicians lose public funding, they would likely seek training in privately sponsored hospitals, Ventolini said.
“That means it’s going to be more difficult to graduate more physicians. We already have a shortage of 90,000 physicians (in Texas),” Ventolini said. “That is going to have a strong impact on research. Part of the money that we use for research is going to be cut with the spending cuts of the fiscal cliff.”
Ventolini said that because TTUHSC does receive funds from the Medicaid 1115 Waiver, the university will be able to receive some sort of funding “cushion” for its various programs.
“We have several programs there to access that money,” Ventolini said, elaborating that programs for residency training in rural areas, diabetes programs and behavioral health support were some of the programs that will have 1115 Waiver funding.
“The hospitals (Medical Center and Midland Memorial) together and Texas Tech and health care centers will have that money available in the next three to four to five years to be able to support some expenses,” Ventolini said.
At Medical Center Hospital, Medicare cuts will most likely affect laboratory services, which include complete blood counts and lipid panels, MCH Director of Patient Financial Services J.R. Edmiston said.
“That’s where we’ll see the biggest hits,” Edmiston said. “We’ll see a decrease in the reimbursement but only from Medicare, which is a large portion of our business, but not all the business we see here.”
Although the lab services could see less funding in the New Year, Edmiston said he doesn’t expect the services to be reduced.
“We’re actually trying to grow our lab business,” Edmiston said, adding that the hospital received more than $65 million in Medicare funding last year.
While lab services might be most affected, Chief Operating Officer Tony Ruiz said MCH has been trying to reduce costs across the board for several years.
“We’re basically trying to become more efficient with the programs we have and looking for potential areas where we can reduce expenses without have to cut programs,” Ruiz said.
And although physicians’ Medicare payments are expected to be reduced, Ruiz said many of MCH’s 40 physicians and 50 care providers will not see as much of the cuts as private physicians.
“You see physicians moving toward a (hospital)-employed model, because they don’t have to worry about business aspects and insurance patients,” Ruiz said. “They can just do what they want, which is to provide medicine.”
Ruiz also ensured that people going to the hospital will still receive the same care the hospital has provided. Ruiz said that 43 percent of the hospital’s business is Medicare patients.
“We are always going to continue to do our best to provide for them and get them healed and take care of them now and in the future,” Ruiz said. “They shouldn’t have that worry at all.”