Extra Medicare funding is a good first step, but feds need to do much more to help
The 2003 Medicare Prescription Drug, Improvement and Modernization Act authorizes more than $25 billion over the next 10 years in hopes of ensuring the long-term fiscal health of rural hospitals and addressing a growing physician shortage in small and outlying communities.
As is typical with major legislation, the intended beneficiaries of the changes are applauding the extra funding, but many remain skeptical of whether the law truly will get to the heart of the problem--improving physician recruitment and retention and maintaining access to quality care for rural Medicare beneficiaries.
"If rural hospitals are looking at this as a way to make payroll for the next six months, they're going to be in a worse position down the road," cautions Alan Morgan, vice president for government affairs in the Alexandria, Va., office of the National Rural Health Association, Kansas City, Mo. "This is an opportunity to ensure that you are ready for the long term."
Richard Cooper, M.D., director of the Health Policy Institute at the Medical College of Wisconsin in Milwaukee and a physician recruitment expert, is not so sure.
"It's one step in the right direction, but I don't think it will have a dramatic impact," Cooper says of the increased funding for rural providers. "I think it sort of highlights that the problem exists."
Cooper calls the 5 percent bonus for physicians "just a drop in the bucket."
William Sexton, CEO of the North Coast service area of Providence Health System in Seaside, Ore., says that the bonus cash is just one way to make a difference in the logging, fishing and resort area on the Pacific Ocean, west of Portland, Wash.
"It takes a lot to get physicians into rural communities," Sexton says. While the 5 percent higher reimbursements may help attract physicians, money is not always the primary factor in recruitment, according to Sexton.
"One of the first things physicians look at is, 'What's my call going to be?' The next thing they look at is, 'Who are my partners and colleagues going to be?' " Sexton says, noting that practitioners need good hospitals to support them.
Federal lawmakers and regulators need to do a lot more to help ease the rural health care crunch, Sexton says, including reform the liability system, offer incentives to install technology and forgive student loans for new physicians who serve rural populations.
"This isn't the cure-all," Sexton says.
FINANCIAL AID
The Medicare reform law boosts payments to rural hospitals and provides incentives aimed at enticing physicians to practice in underserved areas:
- Provides 5 percent reimbursement bonuses to physicians in underserved areas between 2005-2007.
- Sets a floor on the work component in the geography-based wage index to increase payments in areas with a low cost of living.
- Decreases labor share of the usage index for low wage areas.
- Permanently boosts the base payment rate for rural and small hospitals to the same level as large, urban facilities.
- Provides 15 percent bonus to doctors performing outpatient services at critical access hospitals.
Source: House Ways and Means Committee, 2003
This article 1st appeared in the March 2004 issue of HHN Magazine.
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