Cutting health care costs: A test of nerves

A NEW Medicare-cost-cutting effort that will pay neurologists less for some procedures has the whole profession up in arms, but that doesn’t mean the new policy is wrong. Similar disagreements are likely to occur with some frequency over the next few years, as the Affordable Care Act goes forward and Medicare officials — necessarily — focus more and more on curbing health care costs.

As the Globe’s Chelsea Conaboy reportedly recently, the neurologists are upset over a reduction in the amount Medicare will pay for testing nerves. The Centers for Medicare and Medicaid Services will be cutting reimbursements for some tests in half, and with good reason. Neurologists bill for each nerve tested, but the charge per nerve includes costs that occur only once during an appointment, such as the time a doctor spends greeting a patient and explaining the procedure. A doctor who tests more than one nerve in a visit, as often happens, is effectively paid multiple times for the same slice of time.


Getting rid of that duplication will certainly change how much neurologists earn, but the profession itself has only a roundabout defense of the current practice. The doctors argue that overpayment for those tests subsidizes other care, for which reimbursements are less lucrative. Such claims of cross-subsidization are common in health care, and in many cases are valid. But the solution should be to make sure all payments accurately reflect fair costs — not to maintain an illogical system that overpays for one service ostensibly to offset underpayment for another. When no one ever knows what anything really costs, health spending is likely to keep rising.

Rationalizing the payment system will require time and patience. Certainly Medicare administrators should listen sympathetically to doctors as the process goes forward. But given the outsized share of national income the United States devotes to health care, the public should be skeptical of claims that calamity will ensue from the federal government’s cost-curbing efforts.

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