Barry Jarnagin, MD, is frustrated — just like most of his physician colleagues and … it’s probably safe to say … like most Americans. Many are fed up with elected lawmakers of all stripes and their inability to effectively legislate in today’s toxic political environment.

For healthcare providers, however, the aggravation stems from a long-standing reimbursement tug-of-war that leaves physician practices and hospitals never quite certain where they stand. For healthcare providers, it’s personal, since lawmakers in Washington, D.C. and Nashville control a percentage of their earnings and handle that responsibility without much aplomb.

“I think our leaders don’t have a complete understanding of healthcare. They largely make decisions based on politics, not what is a functional solution, and they take action based on crisis modes,” said Jarnagin, a urogynecologist and medical director of the Saint Thomas Center for Pelvic Health. The result, Jarnagin continued, is “a politically acceptable patch, not something that’s well thought out, and they don’t get the right people involved.”

The litany has been ongoing, with Congress chipping away at Medicare and Medicaid reimbursements while periodically threatening even more drastic cuts. At this newspaper’s deadline, a 27 percent cut in Medicare physician payments was on the table. At the state level, TennCare offers providers the same uncertainty, with a 5 percent cut in the TennCare budget looming; in fact, Tennessee hospitals so far have contributed $452 million to help the state keep up its end of the bargain to ensure 2-to-1 matching federal dollars.

“There is no doubt that this is certainly the most fluctuating period of time that we have ever been in and the most uncertainty that we’ve ever been in, in my professional career,” said Jarnagin, a member of the Tennessee Medical Association’s Public Health Committee. “It’s very unclear as to how this whole thing is going to play out.”

TMA President Michael Minch, MD, a retired surgeon, shares Jarnagin’s annoyance. “It’s a mess out there,” he said. “It’s nice to not personally have my income based on the whims of Medicare and the government and the insurance plans at this point. I think I would be pretty intimidated if I were just starting out in practice.”

In fact, it’s that scenario – that America’s smart and promising young people are being driven away from the practice of medicine – that bothers Minch the most, and at a time when baby boomers are beginning to flood the healthcare system. “We should be trying to get the best and brightest to become physicians, not putting obstacles out there,” he said.

Minch points to the Medicare sustainable growth rate as a “perfect example” of the contentious nature of Washington and its ineffectiveness when it comes to healthcare policy. Since 1997, the SGR formula determines Medicare doctor reimbursements and is supposed to take economic realities into account. According to some experts, the formula had unraveled by 2001. “The SGR is a mistake,” Minch said. “That formula was supposed to provide fairness, and it wasn’t suppose to incentivize doctors to get out of medicine or have these fears every year. But the formula was put together wrong, and it ended up causing the cuts in the doctors’ reimbursement. Both sides, the Democrats and the Republicans, all agree to that, but nobody has the guts now to fix it because it’s going to cost money to fix it.”

This income uncertainty is adversely affecting healthcare delivery today, both Minch and Jarnagin agreed. “There’s no ability to do any futuristic, visionary planning of any degree,” Jarnagin said. Minch pointed to a practice’s expenses — from a lease or mortgage and salaries to malpractice coverage, continuing educational requirements, and regulations regarding the use of electronic medical records. “If you don’t know (reimbursement rates) from year-to-year, it’s awful hard to invest in anything longer than just a short-term investment. You don’t know if you’re going to have the money,” he said. “It’s even hard to hire people in the practice for the same reason. It really slows down the things you want to do to make your practice really shine.”

It’s not much different when it comes to the outlook for hospitals. “I guess the thing that bothers me is just how dysfunctional Congress is right now and the fact that we’re getting absolutely no direction,” said Craig Becker, president of the Tennessee Hospital Association. And, yes, that makes plotting a future knotty at best.

“You know, what I’ve told my members is that if you’re waiting for Washington to come up with innovation, you’re going to wait a long time. You might as well just go ahead and do it,” Becker said. “A lot of them have taken that to heart, and they’re actually out there doing some very innovative things, or at least getting started, whether it’s accountable care organizations or working with other community groups or discussing with payers the possibility of going to bundled or capitated payments. I’m encouraged from that standpoint.”

In October 2011, in Becker’s THA blog, he wrote that hospitals will have to learn to do “less for less,” meaning that hospitals eventually won’t be paid based on the fee-for-service model that’s caused an unprecedented rise in the use of healthcare services. Once volume-driven payments are in the past, he said, “I think the expectation is we’re going to do less procedures for less money. That’s probably appropriate, frankly. The worst kind of medicine that you can get is medicine that you don’t necessarily need. Yet the incentives are just not there to work to keep people out of the healthcare system; it’s actually the other way around.”

His fear? That Congress will “take a meat ax and cut payments but not worry about providing any incentives to change how we provide our care, and that’s going to be problematic.”

Becker, Minch and Jarnagin all have advice for providers in this crucial election year: Get involved, pay attention and let your voice be heard.

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