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The AMA: Pushing Patients Around

Sep
13
2006

It is time to dip into some murky waters here at Spot-on. Like it or not, it’s time to see what the American Medical Association (AMA) is up to. Why so murky? Well, the AMA is the group most responsible of any for ensuring that America does not have universal health insurance for every citizen, and also for the fact that the quality and even type of health care patients receive varies dramatically.

It lobbies for a number of causes – reduced salt in our diets, for instance, in addition to the work it does on behalf of individual doctors so it’s hard to really get a handle on the type of real work the AMA does. But, well, that’s why I’m here: To put it all in perspective.

Recently the association conducted a public opinion poll, one designed to strengthen its arguments on Capitol Hill against cutting phycians fees. Guess what it said? Most Americans are alarmed by impending Medicare cuts that will harm seniors’ access to care!

Well actually most Americans had never heard of the cuts, and most Americans believe that health care is way too expensive and would presumably like to pay less for it. But leave that aside. After the pollsters told them that Medicare fees would be cut, the next question was obvious. It was something like “Doctors say that if you pay them less they won’t take Medicare patients, who will be left on the street to die. Then their bodies will be eaten by wolves. Are you worried that this will impact access for grandma to her doctor?” And you can guess what the answer will be.

This is the typical semi-fraudulent poll you’d expect from a self-interested lobbying group. And the AMA, of course, is able to say that it’s not fighting to maintain its members’ incomes, it’s fighting to preserve access to care for grandma. The real problem physicians are complaining about is that in real terms their incomes have gone down over the past decade, although most of the fall was in the 1990s, and they’re starting to pick up again now. But when you’re talking about an average income of about $200,000 a year it’s pretty hard to get public sympathy for your cause. And on top of that, the poll’s assertions are supported by real life. Doctors may say they’re not going to take anymore Medicare patients if fees go down, but the real data shows that they continue to treat Medicare patients. Earlier fee reductions made essentially no difference in the number of physicians taking Medicare patients. And that’s only logical: Elderly Medicare patients are, by far, the biggest users of health care and therefore doctors’ biggest customers. But those seniors are being scared into protesting by the physician lobby, and that will likely get those fee cuts put off for yet another year.

How did the AMA end up using patients to lobby for policies which are not really in their best interests, let alone the interests of taxpayers, employees and consumers paying for health care? It’s a long and sordid story. By far the best analysis of the development of physicians as a distinct and highly privileged trade guild was written by Paul Starr whose seminal work, The Social Transformation of American Medicine, tells the story of how allopathic physicians distinguished themselves from various other types of medical practitioners and quacks in the latter years of the 19th century.

They managed to use their growing social status and the political influence of their major membership organization, the AMA and its state chapters, to resist the ability of corporations to overrun their status as independent small businessman (as happened to most craftsmen and many other professionals). They also prevented the government from closely regulating how they actually practiced medicine and from creating a social insurance scheme, which presumably they’d be forced to work under. That’s why attempts to introduce universal health care reform failed in 1917, 1934, 1948, 1965, 1974 and 1994 (although by 1994 the AMA had help).

Suffice it to say this was a remarkable triumph both socially and politically. And when the government did finally get a halfway-house social insurance scheme in place – the introduction of Medicare for the elderly in 1965 – the power of the AMA was sufficient to make sure that for the next 20 years, physicians were able to bill the government essentially as much as they liked, and received no interference in what they were billing for.

Eventually though these good times couldn’t last.

A couple of things started to happen. Although corporations are banned from “practicing medicine” in many states including California, the ability of the physicians’ guild – the AMA – to restrain the growth of large-scale practice groups began to wane over the years. It has become harder and harder for physicians to start new solo practices, even though more than 60% of doctors still work in very, very small groups. Partly because of this, only some 30% of physicians are now AMA members, and they tend to be those in small and solo practices who regard themselves as independent businessmen.

And after about 20 years of seeing the rate of health care costs increase dramatically the government and private payers have looked for ways to slow their health care costs. The government tends to lead the charge on this because the government pays for Medicare which is by far the biggest and most important health care program in the U.S. Inevitably reducing physician fees is a prime candidate. Reducing the fees is only half the equation, however. Physicians also tend to get paid for each service they deliver. So typically any attempt to reduce fees results in physicians increasing services – not only those they provide themselves but also the attendant tests, hospital admissions and other things that go along with that. So a cut in fees doesn’t convert to a straight cut in income, or a reduction in health care costs overall. But it’s not, of course, something physicians are going to be keen on.

Now, Medicare has an incredibly complicated fee schedule, and spends its time trying to adjust it so that its constituencies of physicians, hospitals, health industry players and taxpayers all have their irreconcilable demands met, or not. As many private plans mirror Medicare in how they pay out on their fee schedules, the fight around who gets what is crucial.

This year, Medicare is trying to re-jigger an attempt it made in the late 1980s to straighten out one of the worst aspects of its fee schedule. Right now, procedures (e.g.surgery) get reimbursed at a significantly higher hourly rate then consultative services (e.g office visits). So most doctors coming out of medical school want to be surgeons and investigational radiologists because they get paid one hell of a lot more than primary care doctors and pediatricians. Take a look:

02f1.jpeg

Incomes of different medical specialists

(Source is American Medical Group Association surveys; chart from NEJM)

Meanwhile, the primary-care docs have been trying to make it up on volume – driving themselves insane in the process. So the various specialty societies are at each other’s throats as Medicare tries to divvy up a budget neutral reallocation of income.

But while that’s the backdrop to the internecine struggle among doctors, there’s a more immediate problem–hence the polling and protests. Back in 1997 when it allegedly cared about balancing the budget, Congress mandated large across the board cuts in physician fees – for all doctors. And every year the AMA gets its friends on Capitol Hill to override the mandated cuts. This year things might be coming down to the wire. Which is why the AMA’s polling and threatening – in passing – to leave grandma in the waiting room.

Now realistically, and practically, we’re not going to get a decent health care system until the doctors are brought into the reform tent, but it’s possible that the baggage that the AMA brings to the table means this may not happen until there’s a revolution in organized medicine. The good news is that as more and more doctors are not in the solo-practice fee-for-service model that the AMA has historically represented. So there is some hope that the association will fade in relevance, reform itself, or be replaced by a new physician organization which takes a reasonable approach to reforming the health care system. The bad news is that there’s no sign of that happening anytime soon.

Share  Posted by Matt Holt at 8:21 AM | Permalink

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