The Sustainable Growth Rate (SGR) target is computed based on four projected changes. These include the United States gross domestic product (GDP), physicians’ service fees, the number of Medicare beneficiaries, and service expenditures based on changing laws and regulations. These four factors have been tied to fiscal performance in several ways. The primary aim of initiating SGR was to restrict the physicians’ spending to the economic performance across the United States, which was continually increasing (Hirsch et al., 2015).
Nonetheless, political enactment consequently led to a terrifying and failed policy. The American Medical Association (AMA), SGR medical care program, acted on reducing costs, outlining alternate medical practitioners’ payment methods, and raising revenue. All these strategies aimed at reducing the yearly payment rate for broad categories of Medicare practitioners. However, the SGR proves not to be an efficient model, since physicians fee is kept constant regardless of technologies employed to care for the patients and the economic conditions. Thus, as Freidburg et al. suggest, the United States health sector needs to come up with more effective models, which will safeguard quality healthcare delivery, as well as to attain a rise in productivity.
The SGR failure led to the number of medical beneficiaries falling as many medical providers preferred private insurance. In addition, the reduction of physicians’ payment, which is approximately more than 20 percent, harm the healthcare practitioners’ abilities to accept Medicare patients (Scoen et al., 2013). In 2015, to reduce the approximated 20 percent decrease in physicians’ fees, the Medicare Access and CHIP Realization Act was enacted in the place of the SGR model. This practice consequently enhanced patients’ access to healthcare providers (Hirsch et al., 2015). Other alternative payment models, which can be implemented instead of SGR, include Alternative Payment models and Merit-Based Incentive Payment Systems.
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Schoen, C., Osborn, R., Squires, D., & Doty, M. M. (2013). Access, affordability, and insurance
complexity are often worse in the United States compared to ten other countries. Health Affairs, 32(12), 2205-2215 https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2013.0879.