AMA and Congress: playing “chicken” again

The AMA threatens that doctors, especially primary care doctors, will stop accepting Medicare patients if the cuts go through. Congress hurtles toward the head-on collision, citing runaway budget problems. Doctors are kept in suspense, their claims held in abeyance while carriers wait for Congress to fix the problem retroactively if it has missed its deadline. The AMA claims credit when the wreck is averted, and urges doctors to continue paying their dues while it feverishly works for a permanent “fix.” Only the AMA, it implies, stands between Congress and certain disaster.

Every time cuts are postponed, the next scheduled cut gets deeper. It’s like a balloon mortgage payment in reverse.

And the controversy gives columnists another occasion to rail against those greedy overpaid doctors, unwilling to assume a bit of shared sacrifice despite the economic downturn.

As Steven Pearlstein writes in The Washington Post, Congress and the President should not accede to these “un-Hippocratic ransoms.” So what if Medicare physician fees haven’t quite kept up with the costs of running the office? What he calls a “modest gap” has been “more than offset” by physicians’ working harder.

What’s a little 21 percent pay cut to someone who already makes much more than the average patient does? Of course, Mr. Pearlstein doesn’t seem to recognize that when overhead is 50 percent or more, a 21 percent cut in revenue means a cut of 42 percent or more in the physician’s actual pay. And if one is losing $23 per patient visit, it is impossible to “make it up on volume.”

Unlike the AMA, the Association of American Physicians and Surgeons (AAPS) has repeatedly said: Let the cuts go through. The best strategy in the game of “chicken” is not to play it. And we oppose holding anyone for ransom.

Both Congress and the AMA appear to be in deep denial about several basic facts:

First, Medicare is insolvent. Expenditures will be cut because the government doesn’t have any money.

Second, the access problem is not caused by the “sustained growth rate” (SGR) formula, but by the price controls and the Resource-Based Relative Value Scale, which the AMA supports. The AMA is the key player in calculating the worth of doctors’ services, which must be coded using its copyrighted, highly lucrative current procedural terminology (CPT) system.

Third, physicians could make more money while charging less, if it were not for the costs of filing claims and complying with Medicare rules.

Fourth, more doctors would do primary care if they could charge a fair price—that the patient was willing to pay—and organize their work in the most efficient way. Say if they could charge $100 for a long enough visit, instead of churning five patients through frantic $20 visits to bring in $100 without being accused of “upcoding.”

We are warned that more doctors will “opt out” if the cuts go through. Exactly. We need more opted-out physicians to take care of seniors who can’t find a physician willing to work under Medicare’s constraints and threats—or who want a non-government physician.

Before 1980, Medicare set its reimbursements however it chose, and physicians set their fees as they thought best. Medicare really could stick to a budget, yet if it allowed prices to be set by a free market (with “balance billing” of the amount not reimbursed by Medicare), access would be preserved. Supply and demand would come into equilibrium.

Today, freedom is available—to those not enrolled in Medicare. Congress, however, has decided not to allow any reimbursement of seniors who choose independent doctors. It is Congress that is holding the hostages.

While Pearlstein might be shocked, doctors opt out of Medicare not because they want more money—many stay in just because they fear a serious drop in income—but because they want to be able to do their job.

Practicing medicine is not compatible with constant games of brinksmanship between “stakeholders.”