Congress left for the holidays without addressing the 2.83% pay cut for doctors. The American Medical Association (AMA) and many other physician organizations have lobbied for a permanent, inflation-based payment update as recommended by the Medicare Payment Advisory Commission. Physician Medicare payment rates have fallen by 33% over the past two decades, when adjusted for the costs of running a practice based on the Medicare Economic Index (MEI) – as can be seen in the figure above provided by the AMA. This has left physicians struggling to continue to provide needed care, particularly to the chronically ill.

According to data from the Medicare Trustees, Medicare physician pay has increased only 9% over the last twenty-two years while the cost of running a medical practice has increased 47% percent. Economy-wide inflation, as measured by the Consumer Price Index, has increased 73% over this same time period. (Recently, inflation has occurred at levels not seen since the 1980s.) When adjusted for the inflation in practice costs, Medicare physician pay declined 26% from 2001 to 2023. Physicians are the only Medicare providers who do not receive annual updates to their payment.

The failure of physician payment rates to keep up with inflation has been used as a justification for the overuse of “skin substitutes” by some practitioners who are making huge profits off their purchase. Sadly, the abuse of the Medicare system by a minority of practitioners makes it harder to get Congress behind needed payment adjustments for the majority. At least, that is my viewpoint. I don’t know how to account for the failure of Congress to act on what is otherwise an obvious problem with physician payment.

–Caroline

Caroline Fife, M.D.

Dr. Fife is a world renowned wound care physician dedicated to improving patient outcomes through quality driven care. Please visit my blog at CarolineFifeMD.com and my Youtube channel at https://www.youtube.com/c/carolinefifemd/videos

The opinions, comments, and content expressed or implied in my statements are solely my own and do not necessarily reflect the position or views of Intellicure or any of the boards on which I serve.