Bad Medicine: How The AMA Undermined Primary Care in America – Brian...

Bad Medicine: How The AMA Undermined Primary Care in America – Brian Klepper


On Tuesday’s Wall Street Journal website, Dr. Benjamin Brewer describes
physicians’ reactions
to the 10.1% cut in Medicare physician payments
that will take effect January 1. He argues that the onus will fall,
once again, disproportionately on primary care physicians, who are
already losing the struggle to keep their heads above water.

He is right, of course. There is no question that Medicare must rein in
But the cuts are approximately the same across specialties and
therefore regressive. Insensitive to its distinct role, its lower
revenues and its high operational costs, they hit primary care harder
than they do specialties. Given its already battered status, the cuts’
impact on primary care could translate to real consequences this time.

American primary care is a shambles, and it is now clear that it will not be viable in the future unless significant changes occur in our national attitude about its value and in the way we pay for it. While, in other developed nations, 70-80 percent of all physicians are generalists and 20-30 percent are specialists, in America the ratio is reversed, the result of a payment system, the Resource-based Relative Value Scale (RBRVS), that was originally intended to account for and financially lessen the differences between specialties. Instead, RBRVS has evolved to reward expensive care and penalize proactive management, even though the data are unequivocal that higher percentages of primary care within a community results in healthier, lower cost populations.

Specialists typically take home at least double the income of the generalist. While the knowledge base and options have exploded in all areas of medicine, the demands on generalists, who must maintain reasonable expertise across all areas, have been intense. Medicare’s payment system, which is the basis for most commercial payment as well, favors specialists in two ways. It pays them a higher rate for their time (implying that what they do is more difficult and more valuable), and it allows them to earn money through procedures that are unavailable in primary care.

In a June 2007 Annals of Internal Medicine article explicating the primary care crisis, Bodenheimer et al, provide this example:

Under the RBRVS system, the 2005 Medicare fee for a typical 25- to 30-minute office visit to a primary care physician in Chicago was $89.64 for a patient with a complex medical condition (Current Procedural Terminology [CPT] code 99214). The fee is calculated by multiplying the relative value unit (RVU) for the 99214 CPT code (2.18) by the 2005 Medicare conversion factor (37.8975) and adding a geographic adjustment. The 2005 Medicare fee was $226.63 for a gastroenterologist in the outpatient department of a Chicago hospital performing a colonoscopy (CPT code 45378), which is of similar duration to the office visit. Colonoscopy performed in a private office in Chicago, which differs from the hospital setting because the gastroenterologist pays for equipment and nursing time, would cost $422.90. Office visits are considered evaluation and management services (history, physical examination, and medical decision making), whereas colonoscopies are an example of a procedural service.

The career-choice implications of these financial dynamics are not lost on medical students, who have been diverted in droves away from what many apparently see as an unrewarding primary care office existence. Between 2000 and 20005, the percentage of medical school graduates choosing Family Medicine dropped from a low 14% to an abysmal 8%. Among Internal Medicine residents, an astonishing 75% now end up as hospitalists or sub-specialists rather than office-based general internists.

Of course these numbers beg several questions. Who will oversee care as the boomers enter their most medically intensive years? Who will keep up with the knowledge explosion and manage our individual patients and the nation’s health? There is no question that rapid progress in expert systems and more effective use of medical extenders will help us develop better approaches to evaluation and management, but do we honestly think the nation won’t need more primary care physicians?

How did we get here and who bears responsibility for it? The short answers:

  • The American Medical Association, which has sponsored a proprietary, secretive advisory committee, the RVS Update Committee (or RUC) that is heavily dominated by specialists and that has been the main source of Relative Value Unit recommendations regarding Medicare physician reimbursement.
  • CMS (the Centers for Medicare and Medicaid Services), which has, to a disturbing degree, taken the RUC’s advice and implemented their recommendations, apparently without much other outside counsel. In its reports to Congress, MedPAC (the Medicare Payment Advisory Commission) has pointedly expressed its concern over the imbalance in physician reimbursement, as well as over its likely impact on the future of the physician labor force.

Writing (amazingly) in the Journal of the American Medical Association last month, Harvard’s John Goodson MD, describes the RUC and its relationship with CMS this way:

The American Medical Association (AMA) sponsors the resource-based relative value scale update committee (RUC) both as an exercise of “its First Amendment rights to petition the Federal Government” and for “monitoring economic trends . . . related to the CPT [Current Procedures and Terminology] development process. Functionally, the RUC is the primary advisor to CMS for all work RVU decisions. The RUC has 30 members (the chair only votes in case of a tie) with 23 of its members appointed by “national medical specialty societies.” Meetings are closed to outside observation except by invitation of the chair. Only 3 of the seats rotate on a 2-year basis. Other members have no term limits.

Seventeen of the permanent seats on the RUC are assigned to a variety of AMA-recognized specialty societies including those that account for a very small portion of all professional Medicare billing, such as neurosurgery, plastic surgery, pathology, and otolaryngology. Proceedings are proprietary and therefore are not publicly available for review. Traditionally, more than 90% of the RUC’s recommendations are accepted and enacted by CMS.

In other words – and it is important to be clear about this – the premeditated actions of the specialist-dominated RUC, operating under the auspices of the AMA and in alliance with CMS, appear to have played a direct role in the current primary care crisis by driving policy that financially favored specialty care at the expense of primary care. Equally important, this relationship has been key in establishing drivers of our health systems relentlessly explosive cost growth with its attendant impacts on the larger US economy.

Dr. Goodson describes the cascade of links between the AMA, CMS and the economy this way:

The RUC has powerfully influenced CMS decision making and, as a result, is a powerful force in the US medical economy. Furthermore, by creating and maintaining incentives for more and more specialty care and by failing to accurately and continuously assess the practice expense RVUs, the decisions of CMS have fueled health care inflation. Doing so has affected the competitiveness of US corporations in the global market by contributing to years of double-digit health care inflation that have consistently increased the costs of manufacturing and business in the United States over the last decades.

Certainly, these revelations should give pause to primary care physicians, and constitute grounds for reconsidering the relationships they and their specialty societies’ have with the AMA. Not that the AMA would care. Their members represent only a small minority of American physicians, and only a relatively small percentage of those are generalists.

But our Congressional representatives and the American people almost certainly don’t know these details. Most Americans and, for that matter, most health care professionals, are utterly unaware of the roles of the AMA and CMS in shaping the primary care crisis and our larger health system problems. Most believe the AMA speaks for all physicians.

So what should we do?

The consequences are upon us. There is little value now in recriminations or in arguing with the AMA about their role. That would only waste precious time and resources, and distract us from the real task, which is to re-stabilize primary care.

Ideally, if Congress were responsive to the common interest, the special problems associated with primary care would be heard and immediately addressed through a revised payment system. But in our special interest-driven system, that will be difficult. The most influential lobbyists – the AMA is one of Congress’ largest contributors, as are the drug and device organizations who sell to specialist physicians – appear to have the ear of Congress. (On the other hand, this year it does not appear that that influence will be sufficient to avert the cuts.)

The discussions about primary care’s dilemma and how we got here have been led by highly respected and credible thought leaders, and taken place in and on prominent health care publications and websites. But realistically, the conversation has taken place primarily within the health care community. To effect change, the American public and, more importantly, influential non-health care decision-makers, must be made aware of the problem, and what its dynamics mean for their and the nation’s short and long term prospects. Only then can the hope exist of replacing the old paradigm.

Some of that is already afoot. The National Committee for Quality Assurance recently proposed a new model for primary care reimbursement that would reward physicians for their time spent managing chronic conditions and communicating with patients. What is promising about this effort is that it appears to have the buy-in of the major primary care specialty societies, and the involvement of major insurers and employers. The question now is whether it can gain the traction required to rapidly change what we ask of primary care physicians and how we pay them.

Another interesting, and perhaps more far-reaching proposal (Download finalpcppaper.doc) has been made by Norbert Goldfield MD and his colleagues. Dr. Goldfield is a highly respected health care innovator, who has been a central force behind the development of 3M’s health care analytical tools.

His group has argued that primary care physicians should be paid for the services they provide, multiplied by a coefficient that appreciates the patient’s burden of illness (or severity) and then multiplied again by a coefficient that appreciates that physician’s willingness to engage downstream providers as the patient’s fiduciary. This is an entirely different role than “gatekeeper,” and would require the PCP to be directly involved in specialty care as the patient’s advocate and guide. Physician performance would be gauged against quality and cost values expected under a traditional, non-PCP-involved system.

To me, Dr. Goldfield’s proposal has tremendous merit. Recognizing the primary care physician’s value by imbuing him/her with the authority to serve as the patient’s advocate throughout the continuum of care, and then paying him/her to do that would accomplish several important objectives. It would:

  1. Reduce unnecessary specialty care services.
  2. Reduce the income disparity between primary and specialty care.
  3. Re-incentivize young physicians to enter primary care.

One last observation. The background reading for this post reminded me of Jared Diamond’s great, cautionary book, Collapse. Diamond describes society after society in which leaders knowingly made decisions that undermined their survival. But they couldn’t course correct because the decision-makers were benefiting from the current circumstances. I wonder whether we’ll be able to avoid that fate.

Finally, deep thanks to my friend and colleague Roy Poses MD at Health Care Renewal, who has written about these issues as well, and who brought them to my attention.

Recommended Resources

  1. Bodenheimer, T. et al., "The Primary Care-Specialty Income Gap – Why It Matters," Annals of Internal Medicine, June 2007; 146: 896.
  2. Goodson, J., Unintended Consequences of Resource-based Relative Value Scale Reimbursement, JAMA, November 21, 2007; 298: 2308 – 2310.
  3. Maxwell S, Zuckerman S, Berenson RA. Use of physicians’ services under Medicare’s resource-based payment system. N Engl J Med 2007; 356: 1853-1861.
  4. Newhouse JP. Medicare spending on physicians – no easy fix in sight. N Engl J Med 2007; 356: 1883-1884.
  5. Poses, R. A (Well Deserved) Rant about the RUC, Health Care Renewal, 11/27/07.

Brian Klepper is a health care analyst and commentator based in Atlantic Beach, FL.

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44 Comments on "Bad Medicine: How The AMA Undermined Primary Care in America – Brian Klepper"


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Nov 10, 2010

I think that the AMA and the nation need to get on board with bettering the health of all Americans.This game of chicken is coming to a real collision this time,since it’s the first claims have actually been processed with the cuts. Even with a retroactive fix, that’s a big deal,and the House has yet to pass the Senate extension.

David Auner
Oct 21, 2010

As a discouraged Family Doc after 26 years of rural Missouri practice, I see the following problems ahead. 1.At least 30% of patients are not receiving optimum care because of production pressures and inadequate attention and time. Many need a team approach but data from insurance companies is not shared and there is no reimbursement mechanism especially for people impoverished by their illness. 2. Even if the ratio of primary care trainees was 80% by next spring, which is not likely, many years would pass before the workforce reflects real needs. 3. Predatory Medicare carriers are defeating primary care by inappropriately denying claims and eliminating profit margins for office visits. (If you see this in your practice it is time to file a criminal complaint with your state attorney general.) 4. The primary care gap will be addressed for decades with mid-level providers and stealing foreign doctors. These providers will need better second opinion resources than a 15 minute specialist evaluation. 5. Many elderly patients are being poisoned by excessive medications by specialists which non-assertive primary care providers are reluctant to change. 30 medications for an 85 year old is not that unusual. 6. Industrial oils fed directly and through cheap meats, and plastic exposures will cause huge numbers of poor and rural people to need end-stage care in their 30’s and 40’s ballooning costs. 7. Profit for large companies in the health field is the only driver of research and regulation. Inexpensive therapies are becoming unavailable while useless screening is accepted.
Prozac anyone?

judy c
Oct 20, 2010

thank you for this great piece. i’m a 4th year medical student in D.C. who recently decided to apply to family medicine residencies after a long hard thought battle between specialty choices. it wasn’t the easiest decision given i was competitive enough to pursue a much more lucrative field and given several physicians around me discouraged me from pursuing primary care. despite this i felt philosophically so aligned with primary care and did not want to make my life decisions based on money or as they call it, the “golden handcuffs.” i know almost none of my fellow students have any clue about this, and i will help get the word out.
may i ask what your background is and what role you believe future young physicians can play to influence congress, inform the public, and help create new policies to reward primary care and cost-effective, patient-centered care?
thank you.

Mar 29, 2010

This is truly an eye opening article. It will be interesting to see what happens with medicine and prescription drug addiction under the new health care bill. I think that the AMA and the nation need to get on board with bettering the health of all Americans.

Feb 27, 2010 would you please spend a few minutes reading my blog about all things chicken. I have been raising more than 50 breeds of chickens 40 years.

Nov 17, 2008

great articel bro
i hope AMA read it,,

Nov 12, 2008

If an executive feels the need to get an executive physical, perhaps they should inquire as to what the 500,000+ physicians that are currently working in America get when it comes to their own health?
Answer: a regular physical.
Executive health is a joke at best, but up in Canada it’s a disaster. The physicians who do practice exec health are some combination of 1) lazy (they’d rather see a handful of patients a day instead of 40+); 2) on a restricted billing number/incompetent (ie. the govt won’t allow them to bill medicare for whatever reason; 3) under the impression that if they give up family medicine and only do executive physicals on boozing stockbrokers and traders (yes, the same ones who caused the wall street crisis), that in some way it makes them an executive (they’d be mistaken).
Also, they’re effectively liars, for if they had admitted on their med school apps that they were going to do exec health, they never would have been accepted.
At least in the US, when you get an exec physical you could be getting the professor. Up here you get a third-rater at best.
The best doctors tend to see the most patients. If you’re seeing a handful a day of healthy white executive males, you aren’t getting much exposure to what’s out there in the real world.
If you were going to select an airline, would you go with the one where the pilots leisurely fly a handful of hours/month, or would you choose the one with a pilot who flies full time and has the most hours of hard cord flying experience under their belt. You get the point.
What’s next, executive dental? Or how bout “Hells Angels Biker” Health? If you want to play video games and eat banana bread in the waiting room, you’re a fool, for the only compelling reason to go for an exec physical is that they shouldn’t keep you waiting. But they more than make up for this by dragging a physical that shouldn’t take longer than 20 – 30 mins out for half a day.
On one end of the spectrum you’ve got Doctors Without Borders doing good things for humanity, and on the other end you’ve got Doctors With Gated Borders doing exec health. A lot of these physicians also have MBAs too. Do you really want to get prodded by a GP with a background in accounting (but not enough to stop him from making stupid investment decisions).
The point of the lesson is this: stay away from turkey doc physicians who practice exec health. They are the furthest thing from the heroic Hollywood docs you see on TV. They are the moral equivalent of the Bentley-driving Beverly Hills plastic surgeon, except they’re not plastic surgeons. They’re bottom feeding sell-outs. Even if you weren’t spending the big bucks in an obnoxious manner, I have to admit that even wall street executives like hank paulson deserve better.
On second thought….

Sep 10, 2008

it’s useful 3ks

Jul 24, 2008

Thanks for such an informative article about health care face now a days.

Jul 20, 2008

The AMA, as a representative body, will remain out of touch with the needs of primary care docs as long as those docs choose not to make their voice heard within the group. We must face the fact that the AMA is a known, powerful group and, therefore, as primary care providers, must increase our participation. Only then, will the voice of the House of Physicians speak more favorably.

Jun 9, 2008

You Want To Be A Doctor?
Lately in the media, others have said and expressed concern about the apparent shortage of primary care doctors, most notably. Typically, the main reason stated for this shortage is lack of pay of this particular specialty compared with other specialties chosen by potential physicians.
Yet considering the additional attention of shortages of students in some medical schools, one may ask the question as to whether or not people want to be any type of doctor in the first place in the United States. About one third of their lives are spent achieving the requirements of this profession. Reasons for not choosing to enter this profession are several and valid.
There is the issue of long hours- with primary care in particular because of the apparent lack of doctors of this specialty. Such doctors may be over-worked without an expected pay reflecting the work they do. Furthermore, those doctors employed by health care systems are required to see a certain number of patients a day, and receive a monetary bonus if this expectation is exceeded. It seems that most doctors are members of such health care systems. So burnout certainly may occur. And I consider such a requirement mandated by health care systems demeaning to this profession, and leave the doctor without the control that the doctor is entitled to due to their training and experience.
However, the recent increases in hospitalists, who are those doctors that are usually Internal Medicine doctors who specialize in patients presently under hospital care, and they have lessened the load for all doctor specialties for the work they do that the admitting doctors would have to do without their presence. This in itself makes a doctor possibly more effective and efficient in their practice outside of the medical institution.
All doctors, I presume, face a high degree of emotional and physical stress associated with their profession, as stated in the previous paragraph, for example. And this is not to mention the incredible stress associated with patient care in the first place, with some patient cases causing more stress than others
Doctors, due to the changes that have occurred recently in the U.S. health care system, not only have the issue of money to deal with, but also a loss of autonomy regarding patient care combined with loss of respect that may be due in large part to others dictating on how they practice medicine. Ironically and often, these others are not as qualified as the doctor in the first place. This is complicated by the perception that the public, with some who view doctors as having the easy life with their pay and profession, which does not seem to be the case presently.
There are also reasons of malpractice insurance, which is why doctors choose to join health care systems, it is believed, to pick up the tab for this necessity, along with eliminating the concerns of running a practice in a private manner, which historically has been the case, as their offices are owned by the health care system as well.
Up to 90 percent of malpractice cases against a doctor are baseless and without merit, so they are unsuccessful for the plaintiff, yet this still affects the rate the doctor has to pay for malpractice insurance. I understand that simply filing a lawsuit against a doctor, as frivolous as it may be, still increases the malpractice premium of that doctor. This is combined with the amount the doctor has to spend to defend themselves in such cases, which approaches about 100,000 dollars over the course of about 4 years for such cases. A tort reform in Texas in 2004 resulted in annual malpractice premiums reduced by about a third of what they were. Soon afterwards, claims against doctors remarkably dropped by about 50 percent. Some specialties of doctors pay more premiums for malpractice than others. For example, OB/GYN doctors have been known to pay around 300 thousand dollars a year for this insurance. Certain types of surgeons experience a similar high rate of malpractice premiums. Malpractice flaws are catalysts for doctors to practice defensive medicine to avoid potential litigation, which is a waste of health care resources and unneeded patient methods or procedures.
Also, about a third of the U.S. is insured by Medicare, which progressively has lowered what they will reimburse a doctor for regarding the care they give a patient they treat. This fact is recognized by other insurance companies who will eventually follow the recommendations of Medicare, usually, regarding the reimbursement issue, so it seems. This will lead to a doctor having to see even more patients in order to make it financially with their profession, as this has resulted in the overall income of a doctor experiencing a decline of about 10 percent over the last decade.
Furthermore, doctors normally have to pay off the debt acquired from attending medical school and training, which averages well over 100,000 dollars today after their training. About 20 years ago, that debt was only about a fifth of what it is today. Paying this debt off is typically about 2 thousand dollars a month that doctors on average have to pay in order to eliminate this debt in a timely fashion.
There are some who believe that doctors in the U.S. are over-paid. This may be true, but they are not absent of financial concerns as with any other profession.
Most doctors do not recommend their profession to others for such reasons stated in this article presently, and perhaps other reasons not mentioned. This is somewhat understandable, yet extremely unfortunate for the health of the public in the future, especially. There have been cases where doctors do in fact change careers, and get into vocational fields such as medical communications or corporate medical companies. Also, expert witnessing is another consideration for those who choose to leave their profession. Finally, other choices considered include consulting and research. The training of doctors fortunately leaves them with options not involved directly with the flaws of medical care, but this is bad for us as citizens, overall.
No all doctors are dieties. Like others, some are greedy and corrupt, which complicates others in this profession. Personally, I believe that the intentions of most physicians are bonafide. Yet in time, due to the nature of the current health care system, doctors frequently become cynical, demoralized and apathetic. This may be considered a significant concern to the well-being of those in need of restoration of their health, understandably.
Not long ago, the medical profession that has been discussed had overt honor and a clear element of nobility. Such traits are not as visible anymore, which saddens many intimate with the profession needed by many.
“In nothing do men more nearly approach the Gods then in giving health to men.” — Cicero
Dan Abshear

May 30, 2008

Medicare is not a great idea. It was created when like 3-5 percent of population was over 65. Now, that has changed quite a bit. Good foresight gov’t. Who would think old people would need more care and cost more than JUST taking care of young people? Not Congress.
Next problem, American society doesn’t believe in prevention. MickeyDs. Quick fixes. This is what medicine should be. People don’t appreciate it here. They don’t appreciate as a whole in socialized countries too.
My final say: make payments two-tier to providers and the others in the healthcare system. For example, if a visit to the office costs 55 bucks, then give 30 to the provider directly and 25 to the rest of system. Let them improve efficiency vs screwing over the doc and making us be more efficient. That way also the rest of system can’t reap rewards off the provider.

May 10, 2008

So where is the list published of the 30 members of the relative value scale update committee (RUC)?
We cannot democratize the process without knowing who the (unelected) represenatives are.

Feb 25, 2008

Very interesting article about the problems facing the current health care problems at the moment in the US.