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On Passing Gas and Government Health Coverage.

By Chris Rangel MD ⋅ March 26, 2006 ⋅  Email this post ⋅  Print this post ⋅ Post a comment

It’s like paying the lowest bidder to keep you alive!

Imagine you need a life saving cardiac operation for your severely diseased and failing heart. Then imagine your surprise when you find out that your Medicare government health insurance pays less than 40% of what private insurances reimburse anesthesiologists for the same procedure! Now imagine your concern when you learn that because of such poor reimbursement rates only a scant few anesthesiologists in your area will provide services for cardiac surgical cases when the insurer is Medicare!

The anesthesia services provided during these long procedures can be ridiculously complex and challenging even for the most seasoned “sandman”. Open heart procedures require that the heart be literally stopped (cardioplegia) and the patient is kept alive by use of an artificial pump (bypass). During the procedure the patient often requires multiple invasive monitoring modalities like swan-ganze catheterization and the anesthesiologist is required to interpret complex real-time clinical data and apply combinations of multiple medications based on this data in order to keep the patient stabilized.

Does it bother you that Medicare pays less for this life saving procedure then most private insurances will pay for anesthesia services for a knee replacement!?!?!? Well it should. This is what I was stunned to discover while talking to a good anesthesiologist friend of mine. He is an excellent gas-passer (and physician) only a few years out of residency who loves cardiac surgical cases for the challenges they bring (and he’s young, enthusiastic, and hungry).

But he recently he expressed his frustration when he realized that while private insurance paid him well over $1,000 for his services during a basic knee replacement he got only about $600 from Medicare for a cardiac bypass procedure. Since these operations can take up to 6-8 hours this meant that he was earning less than $100/hour. In order to find anesthesiologists to staff open heart cases many hospitals have resorted to subsidizing their reimbursement. It’s another example of cost shifting in our heterogeneous payer system.

The declining or flat Medicare reimbursement rate for anesthesia services is hugely ironic given the remarkable safety record of modern anesthesiology. Beginning in the mid 1980s it was found that the risks of death or injury from anesthesia could be reduced significantly if anesthesiologists and CRNAs adopt standardized checklists and maintenance for equipment and procedures. The study of individual adverse incidents as well as the reasons for liability claims lead to safer equipment design, training, and standardization of procedures and along with improved intraoperative monitoring techniques as lead to an estimated 25 fold decrease in anesthesia related deaths!

And for all this remarkable work on patient safety (almost 15 years before the current focus on hospital patient safety) Medicare “rewarded” the anesthesia industry by cutting reimbursement rates by 25% in 1992. Despite repeated calls and recommendations to correct this error, reimbursement rates continue to be 40% or less than that paid by private insurance which means that in absolute dollars the reimbursement rates for anesthesia are 80% below the 1991 rates! No good deed goes unpunished!

Not helped by an erroneous assumption that CRNAs could fill the gaps, the result of Medicare’s cost saving effort was a 75% drop in anesthesiology residency graduates per year and the closure of 25 out of 125 anesthesiology residency programs. Now there is talk of an anesthesiologist shortage and delays in elective surgeries. Ironically these Medicare cuts combined with anesthesiologist shortages may lead to increased salaries as hospitals, desperate to find someone to staff surgical procedures, increase subsidies and provide recruitment incentives. Most of this added cost will be passed on to private insurers and some to tax payers as increased medical care costs. Way to go Medicare! Their motto should be “We cut costs now and pay for the consequences later!”

So we may be facing a paradox of falling reimbursement rates and rising health care costs. Apparently no one at the Centers for Medicare and Medicaid Services (CMS) has faced up to this possibility. Of course we can simply change to a nationalized single payer system in which every doctor will be reimbursed at 40% below current levels or less! Oh joy! I’d love to see what that system would look like! Oh wait. This is the Canadian system.

When I told my friend that he was earning up to 4 times less per hour than I am (an internist) when he does Medicare open heart cases he got that look that people get when they realize that despite years of extensive (and expensive) training the government considers his skills to be of 60% less value than what the market (private insurance) values them. This is a sad realization that is being faced by more and more physicians as CMS cuts rates and we begin to slowly creep toward socialized medicine.