McDonough on Medicare physician payment policy

2 min read

The U.S. Senate’s likely approval this week of bipartisan legislation to repeal a long-standing feature of Medicare physician payment policy called the Sustainable Growth Rate (SGR) does not mean a new era of bipartisan Congressional cooperation on health policy has dawned, according to John McDonough of Harvard T.H. Chan School of Public Health.

Writing in his Health Stew blog on April 12, 2015, McDonough said the likely repeal of SGR represents a decision that should have been made years ago.

“It worked by giving physicians bonus payments when overall spending for physician services in Medicare came under target, and whacking physician rates when they overshot the SGR target. Under this wacky plan, the only way a doc could prevent cuts to his payments was to up his or her volume of services provided – so the incentives were nuts,” writes McDonough, professor of the practice of public health in the Department of Health Policy and Management and director of the Center for Public Health Leadership at Harvard Chan.

“Bottom line – the SGR structure was bankrupt and took ridiculous time and attention from Congress every year that could be devoted to useful pursuits. The only stumbling block was how to pay for it – and this Congress just can’t find a bipartisan way to finance $140 billion,” he wrote.