The AMA's unhealthy role in setting doctor payments

The physician group plays a little-known part in how the government reimburses its members. The result is higher costs.

By Jonathan Berr Jul 22, 2013 12:59PM
Medical doctor (© Sean Justice/Corbis)Updated July 24.

Some doctors are reaping huge profits courtesy of a secretive American Medical Association committee that helps set the rates they charge, which seem divorced from economic reality, according to an expose the Washington Post published over the weekend.

These AMA estimates, which are required by federal law, overstate the amount of time it takes a physician to perform some tasks by as much as 100%. Critics argue this is helping fuel the skyrocketing costs Americans pay for health care.

"If the time estimates are to be believed, some doctors would have to be averaging more than 24 hours a day to perform all of the procedures that they are reporting," the newspaper says. "In some specialties, more than one in five doctors would have to have been working more than 12 hours on average on a single day -- much longer than the 10 hours or so a typical surgery center is open."

Take a common procedure such as a colonoscopy. The AMA estimates that physicians can perform the screening in 75 minutes, more than double the 30 minutes it actually takes, according to the Post.

Similar problems were found with ophthalmologists. The Post found one Florida specialist who performed 3,594 procedures for cataracts and other ailments last year. That works out to 30-40 surgeries per day on the Mondays and Tuesdays he performs these procedures, or a 30-hour-plus workday.
 
The Post story is both enlightening and depressing. None of these doctors have done anything illegal, which is why Congress needs to change the rules. Physicians have long argued that they aren't to blame for soaring health care costs even though most earn comfortable livings.

Many medical experts have long argued that physicians are rewarded too generously for performing tests rather than making their patients feel better. It's a system that's counterproductive and costly.

Total health care spending in the U.S. will nearly double to $4.6 trillion in 2020, versus $2.6 trillion in 2010. To make matters worse, all that spending isn't making people any healthier. In fact, a recently released study found the U.S. had fallen behind its peers in most measures of health.

Having the AMA figure out what physicians should be paid is like having a fox guard a henhouse. It's hardly a shock that the main lobbying group for doctors would create a system that rewards its members. An AMA spokesperson didn't immediately respond to a request for comment.

Update:

On the day after this story was published, a spokesperson for the AMA responded, defending the association's practice and disputing that it has caused an increase in health care costs, saying that claim "completely ignores the fact that the Medicare physician payment system is ultimately budget-neutral. There is no financial impact if the government accepts a physician recommendation for increasing a medical service value since the budget neutrality rule requires offsetting reductions to all other values."


Follow Jonathan Berr on Twitter @jdberr.


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93Comments
Jul 22, 2013 1:36PM
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Doctors and hospitals are simply looting insurance/medicar/medicaid with the current system!   it is like giving the keys of your locker to the thieves!  in all the non-emergency situations, doctors and hospitals must be forced to disclose the cost of the procedures to the consumer/patient and get thier consent before proceeding with treatment.  also, they must be forced to publish their charges for various procedures at some state controlled web site.   there is NO transparency with the current system.  they charge whatever they want.  recently, i was shocked with some big bills for a normal  doctor visit!  it is time for universal health care.  Recently, i went for REGULAR  visit with a ddoctor, my bill $1855/-!!  do they think that money grows on the trees ?  it is just looting!
Jul 22, 2013 2:08PM
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Just like bringing your car to the dealer and they charge you "book hours" rather than real hours.  Real hours are often a third of book hours. 
Jul 22, 2013 2:38PM
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 Before we begin, please bend over and swipe your credit card twice, once for each finger............. A friend of mine recently had to have a stent placed in one of the veins of his heart - the total time from admittance to release was 6 hours with only 32 minutes of that time utilized for the actual procedure in the OR. His bill was $78,000.00. Fortunately he did have insurance where he worked. After about 5 weeks of worrying about how he would pay for it, he received a letter from his insurance company stating that the hospital, doctors, etc. had "settled" on an amount of $28,500.00 as "payment in full" for his procedure. The only cost to him was the $250.00 for the outpatient deductible. Someone with no insurance would be legally liable for the full amount of the $78,000.00 or any other amount that they wanted to charge, be it legit or not. It is nothing more than state and federal government sponsored, legalized, racketeering. "My rackets are run on strictly American lines and they're going to stay that way!" - Al Capone
Jul 22, 2013 2:21PM
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The health profession along with the legal field are social parasites. They do not contribute a product or bring money into a community, all they do is rearrange the money that is already there. I consider good health to be a condition not a product. My wife spent the night in a hospital a couple years ago. The bill for the stay which included 1 hour in the cardiac cath. lab and a room for 22 hours was $32,000. What was not included were all the consult fee's for reading x-rays, ekgs, etc. from people you never heard of and certainly did not hire. Of course they lowered the bill to $16,000 for the insurance company. I feel that the whole concept of corporate medicine has totally lost contact with the customer. Too many levels of profit and satisfying the stock holders..
Jul 22, 2013 2:33PM
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We may have far from the best healthcare system money can buy. But no one has one that's more expensive.

 

Who says we're not Number One!

Jul 22, 2013 3:18PM
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How about doctors and hospitals be required to post their fees for the various different procedures.  Does anybody have any idea how much anything is until after the fact?  Your basic 10 min  go to the dr because your sick office visit is now $100 ( that's Blue Cross approved amount). 

 

I agree with a previous poster about auto repair approved repair times.  I had a side view mirror replaced at a dealership, I think the stated repair time was 1 hour.  I  saw my car go in & within 15-20 I was being called to check out.  I complained why I was being charged for an hour when it clearly took much less time.  I was cited the repair times in the manual, but ultimately was able to get a little credit.

But it sounds like it's the same thing with medical procedures, these things need to be exposed and revised. 

Jul 22, 2013 3:09PM
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Dear Editor:

The article on July 21, 2013 about Medicare physician reimbursement included anecdotes about the time some physicians spend performing colonoscopy. 

Missing a cancer has grave consequences. Consequently, most gastroenterologists take the time necessary and embrace the newest technologies that improve our examination of the colon by detecting polyps. Removing more polyps takes more time but saves more lives.

The article incorrectly suggests that colonoscopy reimbursement is rising. In fact, Medicare’s reimbursement to physicians for colonoscopy has decreased 16 percent since 1992 (49 percent if adjusted for inflation) to the current rate of $220. A larger aging population and improved technology drive Medicare’s increase in total payments to physicians.

The author confused procedure time with the total time spent on a patient. Days prior to the test we review medical history, allergies, medications and test results. On the day of the colonoscopy, we examine the patient, supervise nurses, and discuss results with the patient. Our work continues days after with report preparation, contacting the referring physician, reviewing pathology results, and providing follow-up recommendations -- all for one fee.  

Current Medicare reimbursement rates for colonoscopy do not accurately reflect its value for colorectal cancer prevention as measured by direct savings in cancer care costs, indirect savings in terms of quality of life for patients and their families, and the dramatic impact of screening on reducing death from colon cancer in the United States.

Colonoscopy requires more time and expertise than merely passing the endoscope.

Sincerely yours, 

Ronald J. Vender, MD, FACG, president, ACG

Anil K. Rustgi, MD, AGAF, president, AGA Institute

Kenneth K. Wang, MD, FASGE, president, ASGE
Jul 22, 2013 2:52PM
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AMA + DOCTORS = GREED !!! Name and expose them,
Jul 22, 2013 2:24PM
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So it's BUSINESS steering the course of our failure. WHEN DO WE STOP THE STUPIDITY. Keep people healthy, if you have to be stupid-wealthy, you're in the wrong profession.
Jul 22, 2013 3:57PM
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The AMA also forces up cost by setting the number of students allowed into medical school, creating a shortage of Doctors. Back in 1999 I was watching Chris Matthews show, he was interviewing the then Head of the AMA. He said that they (the AMA) was going to start reducing the number of students allowed into Medical School because Doctors were not earning enough, there was too much competition.
Jul 22, 2013 3:12PM
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Since the article just happens to mention colonoscopy, isn't that like getting a double screwing???
Jul 22, 2013 3:24PM
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iTS ALL ABOUT THE 1% BILKING THE 99% OUT OF THEIR MONEY.
Jul 22, 2013 3:55PM
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Our politicians with there Cadillac health plan could care less, what it cost the commoners to pay for healthcare. There should be a mandatory law, that just like Nascar drivers, our politicians, should have to wear the name of the sponsor, who helped get them elected. There would be a good share of our politicians, advertising the AMA, the big Banks and big Oil companies. The one percent own this Govt.  

Jul 22, 2013 2:17PM
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The AMA and FDA and our government are all in bed together, to rig prices and protect profits at the health and cost of citizens. Here is my proof,go to youtube and type in.  [  cancer cure-watch now  ]
Jul 22, 2013 3:23PM
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The AMA...ALLABOUTTHE  MONEY  ALLTHETIME!
Jul 22, 2013 2:30PM
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I’m going back to medical $$$$$$$$$$$$$$$$$chool.

Jul 22, 2013 5:21PM
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Holy Free Market, Batman! We need the power of consumer choice to drive down costs!

 

That way, when I'm having my heart attack I'll just ask the EMTs to drive around to the nearest three hospitals so i can comparison shop...

Jul 22, 2013 3:19PM
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check todays' washingtonpost, u will see a link in the "featured Videos" section, "who decides what a doctor is worth".   There you can see many doctors charge/LOOT for more than 24hrs/day! 

 

AMA and doctors are RIPPING off American people.  This GREED must be stopped.   There needs to be more transparency.  They must be forced to publih their charges at some state run sites. 

Jul 22, 2013 2:45PM
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Doctors working more that 24 hrs/day !!!!!   really ??? 

watch this, take from today's Washintonpost ..

 

Jul 22, 2013 5:06PM
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It is abolutely crazy! I work hard 6 days a week to get ahead and give my family what they need. I work two jobs. I dont steal nor sell drugs. You cant win in this crazy out of control country. We dont fix the welfare system. We dont fix Health Care. We just raise Taxes to give it away to all of the system suckers and crack heads.  When is someone with BALLS going to fix something????? Does anyone care??? Keep up the great job PREZ.

 

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