Medicare cuts and rising costs put strain on doctors

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(Host) The Vermont Medical Society is warning that cuts in the federal Medicare program could drive doctors out of business. The Society says the federal government plans to reduce payments under the program, despite a recent study that shows that physician’s costs are increasing.

VPR’s John Dillon reports.

(Dillon) Medicare is the federal health program that covers senior citizens. Last year, the government cut Medicare payments for physicians by 5.4%. New cuts announced last week would reduce payments by an additional 4.5%.

Paul Harrington is the executive vice president of the state Medical Society. He says the cuts are planned even though a federal study shows doctor’s costs have gone up due to rising medical malpractice rates and other factors.

(Harrington) “In fact the federal government is saying physician’s costs are going to increase by 2.9% in 2004 at the same time they’re saying we’re going to cut payments by 4.5%. So the math doesn’t really add up. And the Medical Society is concerned that particularly physicians in rural areas who see a large number of seniors may not be able to survive the declining payments.”

(Dillon) Harrington says he’s worried that physicians may chose to quit, rather than put up with the low payments.

(Harrington) “Particularly a physician who may be near retirement this could be the straw that breaks the camel’s back, they’ll say, ‘Gee why should I keep working when the federal government doesn’t even pay the cost that I incur in providing care. Again, particularly when liability premiums are increasing and Medicaid, the state program, you know they’re not providing any increase either.”

(Dillon) When government programs like Medicare or Medicaid underpay, the cost often gets shifted to employers and private insurance companies.

Harrington says legislation now in Congress that would provide a prescription drug benefit also includes a provision to repeal the planned cuts.

For Vermont Public Radio, I’m John Dillon.

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