The American Medical Association has now added a second pillar to its
national health care reform plan. The first pillar, of course, has
always been “Don’t sue,” a sturdy principle that over the decades has
led the AMA to alliances with such notable victims of overzealous
attorneys as tobacco companies. (For historical perspective, see Howard
Wolinsky and Tom Brune’s 1994 book, The Serpent on the Staff.)
The second health reform pillar, it has now become clear, is: “Pay what’s due,” shorthand for “Give us what we ask for, and do it quickly.” This is also consonant with deeply held AMA beliefs.
A newly released study commissioned by the association found that insurance company bureaucracy and a “chaotic” claims process is draining time from patient care, diverting as much as 14 percent of physician revenue and costing “as much as $210 billion annually, without creating value.” Claims payment must be made “cost-effective and transparent,” the AMA asserts. And what could be more cost-effective than quickly writing a check for whatever the doctor asks for?
While I’m all in favor of cost-effectiveness and transparency, the AMA study does seem a tad harsh. Surely, one of the thousands of claims-processing cubicle dwellers corralled into windowless buildings on bucolic insurance company campuses must occasionally uncover an honest mistake or two in coding? As we know, even doctors’ office staffs aren’t perfect.
Although the AMA study found large variation in how quickly insurers paid, the problem of variation among doctors went unaddressed. Frankly, some are non-compliant, refusing to follow insurer instructions despite repeated phone counseling by highly trained high-school graduates. Alas, no insurance executive attempted to explain-away poor claims-processing marks by proclaiming, “My doctors are different.”
But what’s really shocking about the AMA study is that $210 billion figure. While at first glance it seems to draw on a methodology known as “throw in the kitchen sink,” I realized it actually fit quite well with a separate examination of health system bureaucracy. With a little searching, I found it:
“Because the U.S. does not have a unified system that serves everyone, and instead has thousands of different insurance plans, each with its own marketing, paperwork, enrollment, premiums, and rules and regulations, our insurance system is both extremely complex and fragmented…With a universal health care system we would be able to cut our bureaucratic burden in half and save over $300 billion annually.”
That analysis comes from Physicians for a National Health Program (PNHP), long-time flag-wavers for a Canadian-style single-payer system. As for the costs imposed by lawsuits, most Canadian doctors “receive malpractice protection from the Canadian Medical Protective Association, which tracks the number of legal actions launched and the amounts paid out to successful cases,“ according to the Canadian Health Services Research Foundation. Since 1995, the foundation added, there has been a steady and “startling” drop in the number of lawsuits filed and a steady increase in judgments favoring doctors in those lawsuits that do go to trial.
As it happens, there is a calculation of wasted dollars that dwarfs either the PNHP or AMA numbers, but it has nothing to do with paperwork. A 2005 Medical Care study by Terry S. Field et al. (Medical Care 43(12):1171-1176) examined annual costs related to adverse drug events in the ambulatory setting. It concluded: “Across the entire population of Medicare enrollees age 65 and older in 2000, we estimate the annual cost for adverse drug events occurring in the ambulatory setting was more than $2 billion, of which $887 million was associated with preventable adverse drug events.”
The authors did not suggest report cards to help patients pick the safest doctor. But the methodology does suggest that one AMA concern was addressed. Since the study was done at a large HMO, at least the doctors didn’t have to worry about getting paid.