AMA survey: Steep Medicare cuts will hurt older Americans

April 21, 2005

Steep Medicare payment cuts to physicians and other health professionals will hurt access to care for America's seniors and disabled, according to a survey of physicians by the American Medical Association.

Steep Medicare payment cuts to physicians and other health professionals will hurt access to care for America's seniors and disabled, according to a survey of physicians by the American Medical Association.

The 2005 Medicare Trustees Report projected Medicare physician payment cuts of 26% over 6 years, beginning in 2006. The report also indicated that the cost of running a practice and caring for patients will increase 15% during that time.

"Physicians want to serve America's seniors, but they simply cannot afford to accept an unlimited number of new Medicare patients into their practices if Medicare payments do not keep up with the cost of providing care," said J. Edward Hill, MD, AMA president-elect.

The AMA survey found that more than one-third (38%) of physicians will decrease the number of new Medicare patients they accept due to the first Medicare payment cut scheduled to take place in 2006.

"And that is just the tip of the iceberg, as the vast majority of cuts are scheduled to come after 2006," Dr. Hill said.

The survey also showed physicians would delay purchases of technology as a result of the cuts. For example, if Medicare payments are cut by about 5% in 2006, 61% of physicians said they plan to defer purchase of new medical equipment, and 54% plan to defer purchase of information technology.

"This is bad news because new medical equipment and information technology are critical for the kind of continued quality improvement that the AMA, the federal government, and America's patients hope for in the years to come," Dr. Hill said. "Congress and the administration must act now to stop the impending cuts and replace the flawed physician payment formula, as MedPAC has recommended."