Medicare, Social Security running out of money faster

Medicare's trust fund will run dry in 2024, five years earlier than forecast just last year, and Social Security's will be exhaused by 2036, adding fuel to the debate over cutting one or both programs to reduce annual budget deficits.

The government programs' trustees issued their gloomy findings today amid a rancorous debate in Washington over the future of the New Deal and Great Society programs, which eat up huge and growing shares of the federal budget.

The pessimistic outlook was hastened since the last report in August 2010 by the continued impact of the recession, which has sapped revenue and increased spending.

Both programs are running in the red and will continue to do so, the trustees said. Medicare is paying out more in benefits each year than it takes in in taxes. Last year, its trust fund wasn't expected to run dry until 2029.

Another factor: longevity. The report projects that men who turned age 65 in 2010 can expect to live another 18.6 years, an extra half-year compared to last year's report. Life expectancy for women at age 65 is projected at 20.7 years, up from 20.4 years in 2010.

"Americans are living longer, and health care costs are continuing to rise," Treasury Secretary Timothy Geithner said. "And if we do not do more to contain health care costs, our commitments will become unsustainable."

Social Security has longer before its trust fund runs dry in 2036, but it ran a deficit last year for the first time since 1983. Now it's projected to run deficits every year; last August, the trustees had projected a few more years of surpluses from 2012-14.

If the trust funds run out, the programs no longer would be able to pay full benefits. Social Security would be able to pay only about 75% of promised benefits through 2085. Medicare could pay 90% starting in 2024, dropping to 75% in 2045.

The Social Security Disability Insurance program is in the worst shape. Its trust fund will run out before 2018, the trustees reported, forcing it to borrow funds from the retirement insurance program.

The Medicare figures are suspect, because they rely on billions of dollars in savings projected under the health care law signed by President Obama last year. Without passage of that law, the Medicare trust fund would be projected to run out in 2016, just five years from now.

The savings in the law depend on many factors, such as cuts in payments to doctors that Congress habitually sidesteps, as well as improvements in doctors' and hospitals' productivity. There is no guarantee those will happen; in fact, the physician payment cuts surely will not.

Richard Foster, Medicare's chief actuary, mentioned these and other factors in a separate opinion at the end of the lengthy report which, in essence, calls its conclusions into question:

The financial projections shown in this report for Medicare do not represent a reasonable expectation for actual program operations in either the short range, as a result of the unsustainable reductions in physician payment rates, or the long range....

The economic outlook remains more uncertain than usual. Due to the sensitivity of hospital insurance trust fund operations to wage increases and unemployment, the current slow recovery from the recent recession adds a significant further element of uncertainty to the trust fund projections.

Unlike past years, the annual report could have an immediate impact on the most important domestic policy issue pending before President Obama and Congress -- how to reduce annual budget deficits and get a handle on the nation's $14.3 trillion debt.

Geithner has said that debt ceiling must be raised by Aug. 2, or the country would face an unprecedented default on its obligations. Republican leaders in Congress have said they won't vote to raise the debt ceiling without substantial spending cuts. House Speaker John Boehner wants $2 trillion.

"For decades, politicians in Washington, D.C., have looked up at the size and scale of the fiscal challenges facing our country, particularly in Medicare, and chosen to kick the can down the road," Boehner said. "Today's trustees report is another reminder that we've run out of road. With tens of millions of Baby Boomers beginning to retire, this is the moment to act. The time is now."

The GOP leaders have ruled out tax increases, but the White House insists they remain on the table. That could include raising the Social Security payroll tax cap or increasing the Medicare tax that pays for hospital insurance.

See photos of: Barack Obama, Timothy F. Geithner

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Deficit-reduction talks sidestep Medicare, taxes

WASHINGTON — Democrats and Republicans agreed Thursday to focus initially on areas of potential compromise — rather than overhauling Medicare or raising taxes — as they seek to reduce a $1.4 trillion budget deficit and slow the growth of the $14.3 trillion national debt.

House Majority Leader Eric Cantor looks on as Vice President Joe Biden meets with congressional Republicans and Democrats in hopes of striking a deal on deficit reduction Thursday.

Both sides came away from a meeting led by Vice President Biden encouraged that common ground exists in the areas of less controversial spending cuts and rules to lock in savings. "We made progress," Biden said.

They will meet again Tuesday, when the specific subject on the table will be potential areas of agreement. That's in contrast to the rhetoric of the past month, when President Obama lashed out at Republicans' plan to turn Medicare into a voucher program and Republicans belittled Obama's plan as cutting too little and raising taxes too much.

"I think today's meeting really was in contrast to the rhetoric that we've heard before," said House Majority Leader Eric Cantor, R-Va. "Without attacking anyone's plan, we're looking to find areas on which we agree."

House Budget Committee Chairman Chris Van Hollen, D-Md., echoed that sentiment. "Everybody is trying to reach a serious, credible agreement," he said.

Biden and the six lawmakers representing House and Senate leaders face two deadlines:

•The nation's $14.3 trillion debt limit will be reached this month, and extraordinary measures by the Treasury Department will avoid a government default before early August.

Republicans say they won't allow more borrowing without action on the deficit — spending caps and additional cuts.

•Any further effort to control the nation's long-term debt will have to be done before Congress adjourns this year, because neither side expects action during the 2012 election year.

Republicans have said they don't expect quick action on their Medicare overhaul. That was made clear Thursday when 50 Democratic senators wrote Obama in opposition to the Medicare plan, guaranteeing it won't pass the Senate.

"The reality is this president has excoriated our budget plan and the Medicare proposal in the plan," Cantor said.

In turn, Republicans say, Democrats should stop trying to raise taxes. Obama's plan calls for raising tax rates on upper-income Americans and eliminating tax breaks enjoyed by powerful industries.

"Nothing is off the table except for raising taxes," said House Speaker John Boehner, R-Ohio.

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Obama Seeks Stronger Hand for Medicare Panel

AP2010

Its members haven't been selected, and it doesn't even come into existence for more than a year, but already the oversight panel for Medicare that was created by President Obama's health care reform law is reigniting the fiery debates that preceded the law's passage more than a year ago.

When it springs to life in 2013, the Independent Payment Advisory Board, or IPAB, will field 15 members, all appointed by the president, subject to Senate confirmation. Their mission: to bend the cost curve -- i.e., slow the pace of growth -- for Medicare with recommendations that will carry the force of law -- unless Congress passes its own laws to override them.

On Jan. 15, 2014, IPAB will submit to Congress its first set of recommendations, with more to come on the same date in each of the next four years. Congress can act at any time to adopt those recommendations or pass more stringent laws to achieve the same or more effective ends, where costs are concerned. If that happens, IPAB's recommendations would remain on the shelf. But if Congress does not act within one year of its receipt of a given set of IPAB proposals, then those proposals become law.

During those first four years, IPAB's members will monitor medical data and the Consumer Price Index for signs of inflation in Medicare costs. Then, starting in 2018, the panel will peg its assessments about cost increases to the American economy, with IPAB's recommendations set to take effect if, in that year, the average cost of Medicare for each beneficiary exceeds the country's gross domestic product (GDP) by 1 percent -- and Congress hasn't acted.

The Congressional Budget Office has projected that growth in Medicare costs will not reach that point until a decade from now.

Still, as part of his broader effort to tackle America's looming debt crisis, Obama proposed last week that Congress modify the law to allow IPAB's recommendations to take effect sooner -- namely, if average Medicare costs rise by merely 0.5 percent of GDP. The Congressional Budget Office has not weighed in on how soon it sees that happening.

Critics contend IPAB will, over time, serve to ration health care

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Obama Administration Eases Pain of Medicare Cuts

Associated Press

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Millions of seniors in popular private insurance plans offered through Medicare will be getting a reprieve from some of the most controversial cuts in President Obama's health care law.

In a policy shift critics see as political, the Health and Human Services department has decided to award quality bonuses to hundreds of Medicare Advantage plans rated merely average.

The $6.7 billion infusion could head off service cuts that would have been a headache for Obama and Democrats in next year's elections for the White House and Congress. More than half the roughly 11 million Medicare Advantage enrollees are in plans rated average.

In a recent letter to HHS Secretary Kathleen Sebelius, two prominent GOP lawmakers questioned what they termed the administration's "newfound support" for Medicare Advantage.

The shift "may represent a thinly veiled use of taxpayer dollars for political purposes," wrote Sen. Orrin Hatch of Utah and Rep. Dave Camp of Michigan. Camp chairs the House Ways and Means Committee, which oversees Medicare. Hatch is his counterpart as ranking Republican on the Senate Finance Committee.

Seniors are among the deepest skeptics of the new health care law. A recent AP-GfK poll found that 62 percent disapprove of Obama's handling of health care, as contrasted with 52 percent approval among Americans overall. The poll also found that seniors are more likely to trust Republicans than Democrats on the issue, by a 51 percent to 36 percent margin.

The insurance industry says the bonuses will turn what would have averaged out as a net cut for Medicare Advantage plans in 2012 into a slight increase.

The administration says the reason for the bonuses is quality improvement, not politics.

"We are looking at whether an alternative payment incentive structure would lead to broader quality improvements across all Medicare Advantage plans, by giving incentives for a broader range of plans to improve," said Medicare spokesman Brian Cook.

Medicare covers seniors and disabled people. About one-fourth of beneficiaries are signed up in Medicare Advantage plans that offer lower out-of-pocket costs and more comprehensive benefits than the traditional program. Some of the heaviest enrollment is in states considered political battlegrounds, including Florida, Pennsylvania, Ohio, Nevada, Minnesota and Colorado.

The health care law cut $145 billion over ten years from Medicare Advantage, partly to correct a widely acknowledged problem with overpayments to the plans. Those cuts start off modestly in 2012 and build up. Insurers were expected to shift the burden to beneficiaries in the form of fewer services and higher out-of-pocket costs, triggering an exodus back to traditional Medicare.

"The net result is that the boat didn't get rocked," said independent analyst Dan Mendelson, president of the information firm Avalere Health. "It's fair to say that (Medicare) could not tolerate dislocation, given the political climate."

But Mendelson also said he agrees with the administration that the new money will get more plans thinking about how to improve quality, if they want to remain profitable.

"They are giving the plans training wheels to improve their quality," he said.

The health care law itself tried to soften the impact of Medicare Advantage cuts by providing quality bonuses for highly-rated plans that received four or five stars in a government grading system.

But in a policy shift quietly completed this month, HHS decided that average-quality plans garnering three or three-and-a-half stars would also get bonuses. About half of all the plans fall into the three-star category, according to Avalere's analysis.

The HHS decision means that four of five Medicare Advantage enrollees are in plans now eligible for a bonus. That contrasts with the approach that Congress took in the health care law, where only one in four beneficiaries would have been in plans getting the extra payments.

HHS' nearly $7-billion bonus program is temporary. In 2015, the cuts called for in the health care law will kick in again.

But the episode could be an early sign that Medicare cuts used to finance much of Obama's coverage expansion for the uninsured will turn out to be politically unsustainable, as have other efforts to impose austerity. For example, Congress has routinely waived cuts in Medicare payments to doctors.

A nonpartisan agency that advises lawmakers on Medicare criticized the bonus plan. The Medicare Payment Advisory Commission said it amounts to "a mechanism to increase payments" and its design "sends the wrong message about what is important to the program and how improved quality can best be achieved."

At a time when government is urging health care providers to improve quality and cut costs, the bonus plan "lessens the incentive to achieve the highest level of performance," commission chairman Glenn Hackbarth wrote to HHS officials. Medicare spokesman Cook disagreed, saying even plans that get two stars will now have an incentive to improve.

Medicare has classified the bonuses as a demonstration program, relying on broad legal authority Congress gave the agency to experiment with quality improvements. It's the costliest demonstration program in Medicare history. The money will come from the Medicare trust fund.

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Medicare at the center of budget debate

By Pablo Martinez Monsivais, AP

President Obama outlines his fiscal policy during an address Wednesday at George Washington University in Washington.

EnlargeCloseBy Pablo Martinez Monsivais, AP

President Obama outlines his fiscal policy during an address Wednesday at George Washington University in Washington.

But not on Medicare.

The government

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GOP seeking dramatic changes in Medicare and Medicaid

"U.S. Rep. Paul Ryan, R-Wis., chairman of the House Budget Committee, holds up a copy of the 2012 Republican budget proposal during a news conference on Tuesday."

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GOP Medicare Plan Could Share Common Ground With 'Obamacare' Exchanges

Rep. Paul Ryan's budget proposal to overhaul Medicare already is being lambasted as an attack on seniors. 

But the basic details of the plan are not so far off from several other health care systems -- including the coverage provided to members of Congress, the Medicare Advantage program and the so-called health insurance exchanges established under the Democrats' federal health care system overhaul. 

Ryan, a Wisconsin Republican and chairman of the House Budget Committee, outlined the framework of his proposal on "Fox News Sunday." He said it would rely on the kind of "premium support" system outlined in an earlier proposal co-authored by him and former White House Budget Director Alice Rivlin -- meaning seniors would get a fixed subsidy from the government to help pay for premiums in the private health plan of their choosing. Ryan said Medicare would send the subsidies directly to the private plans, which would have to "compete against each other" for business. 

He compared the idea to Medicare Advantage, a Medicare offshoot which lets seniors put Medicare money toward private plans. But the framework also bares similarities to the exchanges in the federal health care overhaul. 

Both proposals presumably would put out a list of approved private health plans and subsidize the policies chosen by patients. 

Ryan, asked at an event last month about the common feature, said: "Exchange is not necessarily a dirty word." 

However, Ryan suggested the Republican idea of an exchange is much different from the Obama administration's idea. 

The differences may lie in implementation. Whereas the federal health care overhaul sets strict standards for the types of plans that would be allowed to compete for subsidized patients' business, the Center on Budget and Policy Priorities cautioned last month that the Ryan-Rivlin proposal "sets no specific benefit standards" for private plans. 

Conservatives, though, like the idea of a less-regulated exchange. 

John Goodman, president of the National Center for Policy Analysis, said he expects Ryan's plan to set some criteria. But he said that probably wouldn't be as strict as the federal exchanges, which he claimed would "virtually dictate" to insurance companies what they have to provide. 

"There's going to be choice in both worlds. ... That's similar," he said. "It's not radical. It's not even that new." 

But he praised Ryan's approach and suggested it be used as a model for the eventual exchanges under the health care overhaul. 

One key difference between the two exchanges is the way the subsidies are calculated. Under the Ryan-Rivlin proposal, the subsidy would be based on the average cost per Medicare patient in 2012 -- and then allowed to increase at the rate of GDP growth plus 1 percent. Under the health care overhaul, subsidies would be based on a calculation that factors in market prices and the income of the individual. 

There are other obvious differences. The health care overhaul uses Medicaid to cover very low-income individuals. And, of course, the Ryan-Rivlin plan deals with seniors, whereas the health care overhaul's exchanges are targeted at low- and middle-income individuals who generally are not covered by an employer. 

But as with the health care overhaul exchanges, Ryan suggested the GOP might be looking at a sliding scale for Medicare benefits. He told "Fox News Sunday" the proposal would give "more for the poor, more for people who get sick, and we don't give as much money to people who are wealthy." 

The Tax Policy Center, in an analysis put out last month, argued that the health care overhaul and the Ryan-Rivlin plan actually go hand-in-hand. The analysis said the federal overhaul lays the groundwork by instituting an individual mandate, setting up an exchange and establishing minimum standards for insurance plans. "Additional premium support for seniors would be the final piece of the puzzle," fellow Howard Gleckman wrote. "Seniors would be able to buy affordable private coverage through the same sort of exchanges as tens of millions of working people. ... The idea is not as radical as it sounds." 

He also compared the idea to Medicare Advantage and the plans offered to members of Congress, urging Democrats to stop defending the current "flawed" Medicare system and Republicans to let the federal health care overhaul go into effect -- so the two policies can complement each other. 

Though the exchange idea has been around, imposing such a change on Medicare would mark a stark departure from the current system, which provides government money straight to doctors and hospitals for senior care. 

The Ryan-Rivlin plan would call for seniors to pay more for smaller expenses but put a cap on what they could pay out-of-pocket. It's unclear whether the new GOP plan would have similar figures, but the Ryan-Rivlin proposal set a flat $600 deductible and capped total expenses at $6,000. 

Ryan stressed that the changes would not affect those 55 and older, but would keep the program solvent in the long-term. 

"Doing that saves Medicare," he said. 

Early criticism, though, has been fierce. 

Rep. Chris Van Hollen, D-Md., claimed Ryan was giving a pass to "taxpayer giveaways" to the oil-and-gas industry and other corporate interests at the expense of seniors. 

"This is a huge change in Medicare. Not only does it cut the amount for Medicare but it ends the current guarantee that seniors have under Medicare to certain health benefits. And it essentially transfers all the risk of rising health care costs over to the senior," Van Hollen told Fox News. "What he's doing is privatizing Medicare." 

A Congressional Budget Office study last November determined that seniors would likely either face higher premiums or less extensive coverage under the Ryan-Rivlin plan. 

Goodman said it's true that the Ryan-Rivlin plan would eventually make seniors pay more out of their own pocket. But he argued that it also provides more "flexibility" to the private sector to control costs.  

Mike Needham, CEO of Heritage Action for America, said the current system simply won't last. 

"What we have now is a Medicare system that's going bankrupt," he said. "The most important thing is saving Medicare for future generations."

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House GOP budget to propose major Medicare change

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To report corrections and clarifications, contact Standards Editor Brent Jones. For publication consideration in the newspaper, send comments to letters

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House GOP budget to call for big changes to Medicare, Medicaid

House Budget Chairman Paul Ryan's spending plan is to be unveiled Tuesday. STORY HIGHLIGHTSSeniors would get vouchers for private insuranceMedicaid would be cut by up to $1 trillionCorporate tax rate would be cut, but corporation loopholes would endProposal would not touch Social Security Washington (CNN) -- House Budget Chairman Paul Ryan, R-Wisconsin, will unveil a highly anticipated 2012 Republican budget next week that proposes dramatic changes to political lightning rods: entitlements.

The plan, to be released Tuesday, calls for a controversial overhaul of Medicare, the health care program for seniors, and imposes deep cuts in Medicaid, which provides health benefits to low-income Americans, according to House Republican sources with knowledge of the proposal.

Starting 10 years from now, in 2021, Americans would no longer enroll in the Medicare program, but instead receive vouchers for private insurance, according to the GOP sources, who stressed anyone 55 or older now would not be affected by the change.

The plan is modeled after one Ryan proposed last year with Alice Rivlin, budget director under President Bill Clinton.

Details of how Ryan's Medicare voucher program would work are still unclear, but the Ryan-Rivlin plan said the amount of the voucher -- a lump sum payment from the government -- would be calculated in part by taking the average federal cost per Medicare enrollee.

The GOP aims to save billions of dollars in revamping Medicare, a large contributor to the massive federal deficit and debt.

Sources said they did not yet know how much savings Ryan would project by drastically changing the Medicare program.

On Medicaid, Ryan's plan calls for deep cuts, as much as $1 trillion. The program would also fundamentally change -- the federal share of the Medicaid system would become block grants to the states.

CNN has been told that the House GOP budget plan does not call for significant change to the Social Security program. Republicans argue that while Social Security is a factor in the nation's fiscal crisis, it doesn't contribute as much to the soaring debt as Medicare.

Two House GOP lawmakers briefed on the proposal told CNN they and others on the House Budget Committee believe it's a mistake not to tackle Social Security.

As for so-called discretionary spending, one of the sources -- who would not speak on the record before the plan is publicly announced -- said Ryan's proposal promises to roll back spending to 2006 levels.

It's unclear how much that would slash, but it is expected to be far more than the roughly $61 billion in spending cuts House Republicans passed in February.

Ryan is expected to give specifics on how much savings the plan would create when it is unveiled Tuesday.

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Federal plan would streamline Medicare

File photo by Chip Somodevilla, Getty Images

Health and Human Services Secretary Kathleen Sebelius wants to put the focus on quality preventive care.

EnlargeCloseFile photo by Chip Somodevilla, Getty Images

Health and Human Services Secretary Kathleen Sebelius wants to put the focus on quality preventive care.

Affordable care organizations could save Medicare $960 million over the next three years, Health and Human Services Secretary Kathleen Sebelius said. She emphasized the need for preventive care, saying that one in five Medicare patients who visit the hospital are back within 30 days, and that one in seven suffer a harmful mistake. An additional 100,000 patients die from infections every year.

"These results are unacceptable," she said.

Under the proposed system, which would begin in 2012, hospitals and other medical facilities serving more than 5,000 Medicare patients could form teams of primary care doctors, nurse practitioners and specialists to coordinate a patient's care. The patient would still be able to choose his or her own doctor, and the system is voluntary. The regulation comes as part of the federal health care law passed last year but is open for public comment before it is finalized this year.

Half of Medicare beneficiaries have more than one chronic condition and often receive care from several doctors, according to Health and Human Services. If doctors don't talk to each other, they can make mistakes in prescribing medications that shouldn't be taken with the patient's other prescriptions, or could administer care or tests the patient has already received.

"It describes what we've been up to for 10 years," said Steve Safyer, president of Montefiore Medical Center in New York City. "It really is what people are moving toward."

TIMELINE: Road to health care legislationSafyer said coordinated care emphasizes quality and safety, and at his hospital, it means going out to visit elderly patients who live in four-story walk-ups in the Bronx, or making sure patients can get all of their care in one place. One doctor takes charge of each patient's care, while a team nurse coordinates appointments. The care manager makes sure a patient knows what to avoid with his heart-disease medications, as well as calling to ensure a diabetic patient has her blood sugar under control. "From a financial point of view, 80% of our payments are Medicare and Medicaid," he said. "This is the only system, in my mind, that can manage the expense."

The organizations would be eligible for bonuses if they improve the quality of their care and reduce wasteful practices. But there's some risk: The government will create a benchmark that each organization must reach to assess whether it will receive a bonus from the savings created, or repay shared losses. Mike Nugent, co-author of Accountable Care Organizations: Your Guide to Strategy, Design, and Implementation, said there are at least 50 affordable care organization projects being considered across the country. A small number do it because of the shared-savings aspect of the plan, he said, but more do it because they need to cut costs.

"The bigger issue is that (Medicare) reimbursement is not going to increase as it has in the past," he said. In the past, Medicare payments have increased about 3% every year, but now those payments will be capped, and doctors will have to cut costs to keep their services competitive. "Competition pre-empts reform. Competition preempts these regulations."

For more information about reprints & permissions, visit our FAQ's. To report corrections and clarifications, contact Standards Editor Brent Jones. For publication consideration in the newspaper, send comments to letters

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Federal plan would streamline Medicare

File photo by Chip Somodevilla, Getty Images

Health and Human Services Secretary Kathleen Sebelius wants to put the focus on quality preventive care.

EnlargeCloseFile photo by Chip Somodevilla, Getty Images

Health and Human Services Secretary Kathleen Sebelius wants to put the focus on quality preventive care.

Affordable care organizations could save Medicare $960 million over the next three years, Health and Human Services Secretary Kathleen Sebelius said. She emphasized the need for preventive care, saying that one in five Medicare patients who visit the hospital are back within 30 days, and that one in seven suffer a harmful mistake. An additional 100,000 patients die from infections every year.

"These results are unacceptable," she said.

Under the proposed system, which would begin in 2012, hospitals and other medical facilities serving more than 5,000 Medicare patients could form teams of primary care doctors, nurse practitioners and specialists to coordinate a patient's care. The patient would still be able to choose his or her own doctor, and the system is voluntary. The regulation comes as part of the federal health care law passed last year but is open for public comment before it is finalized this year.

Half of Medicare beneficiaries have more than one chronic condition and often receive care from several doctors, according to Health and Human Services. If doctors don't talk to each other, they can make mistakes in prescribing medications that shouldn't be taken with the patient's other prescriptions, or could administer care or tests the patient has already received.

"It describes what we've been up to for 10 years," said Steve Safyer, president of Montefiore Medical Center in New York City. "It really is what people are moving toward."

TIMELINE: Road to health care legislationSafyer said coordinated care emphasizes quality and safety, and at his hospital, it means going out to visit elderly patients who live in four-story walk-ups in the Bronx, or making sure patients can get all of their care in one place. One doctor takes charge of each patient's care, while a team nurse coordinates appointments. The care manager makes sure a patient knows what to avoid with his heart-disease medications, as well as calling to ensure a diabetic patient has her blood sugar under control. "From a financial point of view, 80% of our payments are Medicare and Medicaid," he said. "This is the only system, in my mind, that can manage the expense."

The organizations would be eligible for bonuses if they improve the quality of their care and reduce wasteful practices. But there's some risk: The government will create a benchmark that each organization must reach to assess whether it will receive a bonus from the savings created, or repay shared losses. Mike Nugent, co-author of Accountable Care Organizations: Your Guide to Strategy, Design, and Implementation, said there are at least 50 affordable care organization projects being considered across the country. A small number do it because of the shared-savings aspect of the plan, he said, but more do it because they need to cut costs.

"The bigger issue is that (Medicare) reimbursement is not going to increase as it has in the past," he said. In the past, Medicare payments have increased about 3% every year, but now those payments will be capped, and doctors will have to cut costs to keep their services competitive. "Competition pre-empts reform. Competition preempts these regulations."

For more information about reprints & permissions, visit our FAQ's. To report corrections and clarifications, contact Standards Editor Brent Jones. For publication consideration in the newspaper, send comments to letters

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