Say Goodbye to the SGR

There is no shortage of complex policy acronyms in Washington, but this week we are finally going to erase one from our vocabulary. Medicare’s Sustainable Growth Rate (SGR) has plagued seniors, Medicare physicians, and Congress for nearly two decades. This week, we hope Congress will utter it for the last time.

The SGR is a flawed formula that places quantity ahead of quality in seniors’ health care. Because of the havoc its price controls would wreak on Medicare, Congress finds itself in crisis mode every time the SGR looms. To date, the solution has been to temporarily stave off the cuts just to protect seniors’ access to their trusted doctors. This week, however, instead of another temporary reprieve we can put in place a better system – one that promotes higher quality care for seniors while also enacting Medicare reforms to put the program on more sound fiscal footing. This package is good for seniors, and it benefits kids too as it extends the Children’s Health Insurance Program for two years.

This is a historic opportunity for a number of important reasons. First, we end the cycle of self-imposed doc-fix crises. The 17 temporary doc-fix patches have come at the cost of $170 billion and served as vehicle for other costly policies that have nothing to do with seniors’ health care. Permanently resolving the SGR would take away this vehicle for bigger government and higher spending.

Second, we repeal the flawed SGR formula and establish a new system that promotes innovation and higher quality care for seniors.This bipartisan, bicameral agreement puts us on the road to a Medicare payment system that rewards quality and gives physicians the certainty of a stable payment system.

Third, we take the first step in reforming Medicare so we can protect the program for future generations. The deal we will consider later this week includes Medicare reforms that will not only produce cost savings today, but the will also put Medicare on a more sustainable fiscal path. For years, Medicare’s trustees have warned of the coming insolvency of Medicare. Republicans have been working for several years on important structural reforms to strengthen the program, protecting this important safety net that gives peace of mind to our nation’s seniors. This week, for the first time, we have reached bipartisan agreement on some of these vital reforms. Of course, much more work remains to save this program for future generations, but this marks a monumental step in the right direction.

Finally, we extend the Children’s Health Insurance Program, giving states the certainty needed to craft budgets and keeping millions of children out of the president’s health care law.

The term SGR is a bureaucratic way of talking about a bad policy. On Thursday, we’re going to delete not only the acronym, but its anachronistic approach to our seniors’ health care. Say goodbye to the SGR.


Rep. Fred Upton is the chairman of the House Energy and Commerce Committee and a Republican congressman from Michigan. 

Morning Consult