The United States Senate Committee on Finance

Baucus Examines Medicare Physician Payment System and SGR

As prepared for delivery

American historian and author Stephen Ambrose once said, “The past is a source of knowledge, and the future is a source of hope.”

Today we begin the first in a series of roundtables about the Medicare physician payment system. This first discussion will focus on where things stand now and how we got here. We’re joined by four former heads of Medicare who will share their expertise.

Congress enacted the sustainable growth rate, or SGR, in an effort to control overall physician spending and rein in Medicare costs.

But it hasn’t worked as planned. The SGR called for cuts over the last decade, and Congress had to override them.

The cuts the SGR prescribed grew each time, and as a result, the problem has snowballed.

Under current law, a steep 27 percent cut to physician payments is slated to occur in January.

A cut that deep would put seniors at risk. It could mean they lose access to their doctors. We can – and we must – fix this problem. But we also have to keep working to restrain costs.

In the short-term, we need to guarantee seniors’ access to their doctors. Over the long term, we need to find a solution that protects Medicare for future generations of seniors.

Today we’ll look at the past as a source of knowledge. We want to understand the original purpose of the SGR. We’ll consider the lessons we’ve learned and the path we’re on now.

Our ultimate goal is to pay physicians in a way that results in high quality, affordable care for seniors. That’s our hope for the future.

So let’s take this opportunity to have a productive discussion. There’s a lot we can learn from our guests, so I encourage them to speak frankly and be direct.

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