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Increases in Medicare

October 05, 1987

There isn't the slightest bit of doubt in my mind that your staff writer intended to present a balanced account of the factors causing the 38.5% increase for Medicare Part B premiums starting the first of next year (Part I, Sept. 28). Unfortunately, his story contains an error of commission and an equally unfortunate mistake by omission.

He wrote, "Because doctors' charges to Medicare recipients rose 20% in the 10 months ending in July, Medicare Part B premiums will climb from $17.90 a month now to $24.80 on January, the biggest ever."

Certainly doctors' fees are a factor in the increase and so is the increased amount of services doctors have been rendering. Your writer did not say that physicians' fees for providing care were frozen in 1984 at 1983 levels, kept that way until this year when a 3% increase was allowed. The truth is physician fees have been and by law will remain under tight controls until 1990.

I do not deny that some physicians may be over-testing and over-treating. But I think they are in distinct minority.

The error of omission has to do with a factor that is responsible for nearly half of the Premium B increase. Your writer stated accurately that by law, recipients pay 25% of their Medicare Part B coverage. What he did not say was that during 1986 and 1987, Medicare set premiums below the legal minimum. Consequently and inevitably, a major shortfall developed. To "catch up" Medicare has to hike the Part B premiums enormously.

I was pleased that your writer described another another reality that has contributed to the increase in Part B costs--the shift of many charges from Part A (hospital care) to Part B (physician fees). The shift was motivated by the federal government's earnest desire to contain costs, an objective I wholeheartedly support. The government established programs to keep people out of hospitals whenever possible and to discharge them from hospital as early as possible. Both of these actions transferred a vast array of charges from Part A to Part B. They include surgery performed in hospital on an ambulatory or out-patient basis. Patients may over-utilize services. More than 70% of Medicare eligibles have supplemental health insurance which allows them to go to the doctor as often as they wish, unencumbered by more than minimal costs.

Surely Medicare itself is a major part of the problem. The Medicare program now in place is clearly inadequate. The new increase will certainly increase the financial burden of millions of our senior citizens least able to afford it.

The American Medical Assn. has proposed a plan which will include a new and realistic tax base to properly fund the badly and sadly under-funded program. Part of the AMA proposal calls for a system incorporating deductibles and co-payments based to some extent on the patient's economic status, a process called "means testing." Also proposed is the introduction of a physician fee schedule.

Personally, I welcome all proposals from any source for constructive change. We must use our unique and remarkable resources wisely so we can keep the promise we made to our senior citizens 22 years ago--free and unfettered access to mainstream medical care. We've got to do that no matter what it takes.



Los Angeles County Medical Assn.

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