Medicare has historically advanced the desegregation of American hospitals, but the Biden administration’s attempt to use the program’s physician-fee schedule to address racial disparities is likely to generate little more than paperwork.

In 1900, life expectancy for whites in the United States was 47.6 years; for African-Americans, it was just 33 years. Before World War II, hospitals for whites in the South typically didn’t admit blacks, and access to hospital care for blacks in rural areas was close to nonexistent. The Hill-Burton Act of 1946 provided federal funds to upgrade hospital facilities in underserved areas and required that hospitals make “separate but equal” provision for black patients in new or expanded facilities under the standard established by Plessy v. Ferguson. When the Supreme Court ruled the Plessy standard unconstitutional in Brown v. Board of Education, litigation began gradually to desegregate facilities that had received Hill-Burton funds. Yet, a year after the Civil Rights Act of 1964, two-thirds of hospitals in the South remained noncompliant with its desegregation provisions.

From the outset, Congress viewed Medicare as an instrument for compliance with the Civil Rights Act. All but one House Democrat from the North, along with the majority of Northern Republicans voted for the legislation, while the majority of Southern Democrats voted against it. By February 1967, facing the threat of withheld Medicare funds for noncompliance with desegregation, 95 percent of hospitals received black patients.

By 2010, life expectancy for African-Americans (75.1) had largely caught up with that for whites (78.9), but substantial disparities in health-care coverage and medical outcomes persisted. The Center for American Progress noted that in 2017, blacks were more often uninsured (11 percent) than non-Hispanic whites (6 percent), were more often in fair or poor health (14 percent versus 8 percent), and suffered higher rates of obesity, hypertension, and asthma. In November 2021, the rate of Covid vaccination among blacks (50 percent) lagged that for whites (58 percent), though both were significantly below those among Asian-Americans (75 percent). The nature and causes of these disparities, of course, are subject to substantial scholarly and political dispute.

The day of his inauguration, President Biden issued Executive Order 13985, directing federal agencies to “allocate resources to address the historic failure to invest sufficiently, justly, and equally in underserved communities.” In July 2021, in its proposed rule for the 2022 Medicare fee schedule, the Centers for Medicare and Medicaid Services proposed payment bonuses for physician practices that “Create and Implement an Anti-Racism Plan.” The rule finalized last month includes this provision.

The payment bonus would employ the Merit-Based Incentive Payment System (MIPS), established under the bipartisan 2015 Medicare and CHIP Reauthorization Act (MACRA). MIPS was proposed by the Obama administration to let regulators adjust physician fees to account for differences in the quality and value of the services they provide. Republicans and the medical profession were unenthusiastic about the proposal to impose a complex bureaucratic scoring mechanism on physicians, but they went along with it in order to replace automatically scheduled cuts to physician fees. Most of the details of the proposed regulatory scheme attracted little debate at the time and were generally overlooked by legislators.

Under MIPS in 2022, clinicians will be subject to anywhere between a 9 percent increase or 9 percent cut to their fees, depending on their performance relative to peers on a “composite score.” Fifteen percent of this score is determined by their performance on six “Clinical Practice Improvement Activities,” which clinicians get to choose from a menu of 90 potential metrics. The Biden administration’s move would essentially add another option to that menu.

Regardless of the magnitude and causes of continued racial disparities in American health care, the administration’s new metric is likely to be ineffective. It’s easy to imagine that the most woke physicians would apply for a credit under the arrangement, while others could simply choose to be assessed according to different metrics. At most, the new metric is likely to be a source of profit to those selling products—such as consultancies formulating antiracism plans—to clinicians, who can use them to check the antiracism box.

Photo by Universal Images Group via Getty Images


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