No one can criticize the Obamacare legislation for being too short.  But even at 2K+ pages, the new law fails to address some major problems with the health system.  One of these is the flawed formula Congress created years ago to determine how much the Medicare payment physicians receive for services rendered.

Year after year, the Congressional reimbursement formula calls for sharp reductions in Medicare payment rates. And year after year, Congress votes to suspend its own formula. That keeps doctors from bailing out of the Medicare program, but it does nothing to remedy the problem of rapidly expanding Medicare costs.

Congressional inaction means that physician Medicare payments are slated to be slashed by 21.2 percent. When Congress returns from Easter recess, they may enact a temporary (they’ve been down that road for years) or a permanent fix. The problem with the permanent fix – repealing their own worthless formula – is that it would immediately raise health care spending by more than $200 billion over the next ten years. Since current law, and not the doc fix, was the basis for the “deficit reduction” initially assumed for Obamacare, this creates a little problem. Unless the Congress cuts federal spending to offset the fix, the taxpayers are saddled with another big addition to the federal deficit. But Obama had pledged he would not add “a dime” to the deficit.

The other option is the short term fix. But the docs are fed up with it. “We need more than Band-Aids…,” says As Dr. William H. Fleming III, president of the Texas Medical Association.  “We need a complete transplant…”

Fleming’s group has launched a petition to “warn congressional leaders that some physicians could be forced to stop accepting Medicare patients if a permanent fix cannot be worked out.”  Similar organizations in 10 other states have confirmed that they will join the petition, and another 30 associations have expressed interest.

There is a big lesson here. The perennial need for a Medicare “doc fix” exemplifies the federal government’s inability to manage health care costs effectively. And Medicare physician payment is not nearly as low as Medicaid physician payment.  And given the massive expansion of Medicaid expected under Obamacare, physicians will see even more of their income subjected to the irrational payment schemes of the politicians and the bureaucrats.  That can only lead to greater problems for Medicaid patients, who already have trouble finding doctors willing to treat them.

Rather than create new entitlement programs and expand old ones, Congress would have done better to try to fix the numerous problems in existing programs and cut federal spending.  True reform would have made systemic changes to Medicare and Medicaid that would make them financially viable.  Instead, the programs’ fiscal woes will only get far worse.

To learn more about the right direction for Medicare reform, click here.