NCPA - National Center for Policy Analysis


July 21, 2009

Last week the American Medical Association endorsed the health bill patched together by House Democrats.  The AMA's endorsement, however, is conditional.  In its letter to Ways and Means Chairman Charlie Rangel, the AMA refers to the promise of "fundamental Medicare reforms."  Doctors want policy makers to prevent Medicare costs from falling, because the further they fall, the less profitable it is to practice medicine, says the Wall Street Journal.

Yes, ending incoherent price controls is a great idea.  But the AMA is essentially saying that if doctors get paid more, all else is negotiable.  Other industry lobbies such as the insurers and drug makers have made the same calculation, putting their short-term self-interest -- usually ensuring that government programs remain generous (enough) -- ahead of the long-run threats.  It can't last, says the Journal.

The promise to the AMA of fewer price cuts is a perfect illustration of the only approach the political class has ever tried to control health spending -- and a preview of what is certain to happen under ObamaCare, says the Journal:

  • As costs explode, Congress will try to wring out ever more "savings" by underpaying doctors and hospitals, and this central planning will be far easier because it will control the bulk of U.S. health dollars.
  • Physicians -- especially the specialists who provide expensive treatments that the White House has decided qualify as "waste" -- will gradually be converted into civil servants a la the United Kingdom or Canada.
  • All medicine will function, or not function, like Medicare does today, but much worse.

Some doctors realize as much, say observers:

  • A coalition of 17 state medical associations and three specialty organizations is poised to break with the AMA over its Washington work.
  • Another group of state hospital associations is at odds with their Beltway representatives over the deal cut with the White House to help defray universal coverage with $155 billion in across-the-board Medicare cuts.
  • The plan "will do nothing to encourage changes in the delivery of health care services," their protest reads, while hurting the nearly half of U.S. hospitals operating on a deficit or close to it.

Source: Editorial, "What's Up, Docs? The AMA Signs its Members Up to be Civil Servants," Wall Street Journal, July 20, 2009.

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