Dr Lockwood, editor in chief, is Senior Vice President, USF Health, and Dean, Morsani College of Medicine, University of South Florida, Tampa. He can be reached at [email protected].
Back in 1997, when healthcare consumed 13.2% of the GDP, there were dire warnings about the unsustainable costs of Medicare. In response, Congress enacted the Balanced Budget Act, which contained a provision termed the Sustainable Growth Rate (SGR). The SGR formula was designed as a politically risk-free mechanism for legislators to limit Medicare spending. The idea was that if physician costs exceeded targets, an across-the-board reduction in Medicare payments to physicians would be automatically triggered unless actively overruled by Congress.
Thus began an annual kabuki dance in which physicians were threatened with outlandish cumulative cuts in their Medicare payments—often over 20%, due to out-of-control costs. However, magically at the 11th hour, we were habitually “saved” and grateful to receive some de minumus increase. Worse, this exercise in futility did nothing to restrain healthcare costs. In 2014, US healthcare spending grew at 5.3%, totaling more than $3 trillion or $9523 per person and accounting for 17.5% of GDP.1 Well, the good news is that in April 2015, Congress repealed the SGR. The bad news is that it was replaced by a potentially more onerous and very complex piece of legislation: the Medicare Access and CHIP Reauthorization Act, or MACRA for short.