The Mayo Clinic facility in Glendale, Arizona has stopped treating many Medicare patients as part of a two-year trial program. The Mayo Clinic is known as a high quality, relatively low cost provider of health care and was praised by Obama in June as a model for efficient health care. Yet, the Mayo Clinic, based in Rochester, Minnesota, with a staff of 3,700 physicians and scientists, treated 526,000 patients in 2008 and lost $840 million on Medicare patients. The average loss per patient was $1600 and many of their patients were not on Medicare, so the loss per Medicare patient was higher.
According to the March report of the Medicare Payment Advisory Commission (MPAC), doctors made 20% less treating Medicare patients than they did caring for privately insured patients in 2007. Of course, this is like getting an estimate of future costs for a government medical program from the CBO. As is well-established historically, the CBO estimates are always many times less than the future costs actually turn out to be. The underpayment estimates of the MPAC are just as surely underestimates.
Socialists like to claim that Medicare is a huge success. It would in fact be an obvious total failure, except that many of its costs have been transferred to patients on private insurance and the fact that demographics have allowed it to operate successfully as a giant Ponzi scheme so far. As the Baby Boomers reach the age of 65, the program will rapidly incur costs which will exceed the current income from the Medicare payroll tax. This will happen by 2017 or even earlier by 2013 in some estimates. Some combination of higher taxes, lower medical services payments, and rationed medical care will have to make up the shortfall in the program's ability to pay for medical services. The day of reckoning is very near and the present socialist Democrat health insurance reform bills are not addressing any of the real problems, except perhaps on the pathway of rationing future health care. In many ways, the present ObamaCare bills actually add to expenses directly with taxes on medical services and will add further with an incredible overload of bureaucracy and innovation restrictions.
The Glendale Mayo Clinic facility has more than 3,000 patients eligible for Medicare. They will have to pay cash to continue to see their doctors there. This facility lost $120 million in 2008 on their treatment. Only about 50% of the cost of treating elderly primary care patients at this facility was paid by Medicare. There are a few areas in which Medicare payments will still be accepted there. Specialist cardiology and neurology services and laboratory services payments will still be accepted.
Medicare covered about 45 million Americans at the end of 2008. About 92% of family doctors participate in Medicare, but only 73% of them or about 2/3 of all family doctors are accepting new patients under the program. The increased numbers of patients over 65 in the next few years will result in a further reduction in the percentage of family doctors accepting new Medicare patients. If payments are cut back, as they likely will have to be due to the coming funding crisis for Medicare, then the percentage of doctors accepting Medicare patients will drop still further. There is already a severe shortage of family doctors at the present time, so the situation will deteriorate catastrophically. Congress, just about a week ago, postponed a 21.5% cut in Medicare payments to doctors for two months.
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