LAUSR

The current debates among the large field of Democratic candidates for President have resulted in a number of rather radical, far-reaching (and expensive) proposals for changing the role of government in our lives. Among these has been a resurgence of the proposal to use the current Medicare system as a model for a universal health care system in the United States. There are some valid reasons for turning to this model, which is a form of government-sponsored, single-payer, universal health care that is currently highly respected by members of both parties and the general public. Medicare certainly is the most efficient model for health care insurance in the United States, with a medical loss ratio (ie, the percentage of income that is spent on actual health care) of 96% (ie, 4% administrative overhead), compared with administrative overhead from 10 to 20% commonly reported by various commercial insurers. If Medicare is so efficient, and it is currently working with almost universal acceptance, why would it not be a good model for the entire nation? The reasons are implicit in the way that the Medicare formula for paying for health care was derived and how it is administered. Unfortunately, very few of those running for office who propose “Medicare for All” understand these issues and why they would be both overly expensive and destructive to vast areas of health care, including neurology, if they are not fixed first. The current reimbursement rates used by Medicare are based on models of payment for medical care that date back to the era after World War II, when medical insurance was first becoming common in the United States. In those days, physicians and hospitals were reimbursed for usual, customary, and reasonable (UCR) rates. These rates set limits on what insurers would pay, up to the 80th percentile of claims made for those procedures in the previous year. Thus, each year, physicians and hospitals were incented to raise their rates to at least the 80th percentile of the previous year. This was difficult to do for recurring health care expenses, such as office visits, which patients would experience several times a year and where many patients were not insured. A large increase in these costs each year was noticeable, and resulted in pushback. However, for procedures that were often performed only once in a patient’s lifetime, there was no prior knowledge available on what the charge had been the previous year. Therefore, the prices for the hospital components and for physician fees for performing those procedures rose much faster than the consumer price index from the 1940s to the 1980s. As a result, even today, we have the anomaly that payments to physicians for office visits and inpatient consults are paid at levels that are around one-third to one-fifth of payments for surgical services. Facility fees for procedures likewise are priced at much higher rates than actual cost. Some of this is justified by greater inherent costs in some of these procedures, but the profit to hospitals for procedural services is so out of proportion to nonprocedural services that the economic success of a hospital in 2019 is based largely on the proportion of the two favoring procedures. This distortion in the marketplace has produced the anomaly of hospitals (and the medical schools that own and operate them) supporting salaries and programs for surgical services at levels that far exceed what they are willing to pay for nonprocedural services. (Nonprocedural services, which include most things that neurologists do, are often viewed as “bait” to bring in patients who will then have testing and procedures on which hospitals will make their income. I once pointed this out to the Chairman of the Surgery Department at my institution, and his response was, “Yes, but you are very good bait.”) Neurology, as a largely office-based, nonprocedural specialty, falls into the group that is underpaid, and neurologists are among the most poorly paid doctors in most health care systems. Medical students are aware of these disparities, which is why so many of the top students in each class choose procedural specialties. I sometimes joke that for a bright and talented physician to go into neurology requires a vow of poverty. Therefore, moving to a system that will pay for all patients in a way that permanently enshrines this distortion will essentially make neurology a second-class profession for the foreseeable future.