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Siren Song: Physicians, Congress, and Medicare Fees

University of California, Los Angeles

Physicians' fees under Medicare are updated by regulation annually based on a formula called the Sustainable Growth Rate (SGR). Since 2003 Congress has reversed impending cuts to fees in response to physician calls for reform of the SGR, yet physician groups supported the SGR when fee increases outstripped medical inflation. Physician groups are partly culpable for the failure of cost containment because physician groups have resisted efforts to regulate their practice or link effectiveness research to coverage and reimbursement decisions. In the story of Ulysses and the Sirens, Ulysses has himself bound to the mast so that he cannot be seduced by the calls of the Sirens. Physician groups are like sirens because legislators cannot resist their songs. Future policy changes should consider physician needs alongside broader cost-containment goals, including linking reimbursement to comparative effectiveness research.

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