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AMA endorses single-payer health care (sort of)

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.

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ScuzzPetertcoyotepeterTom Recent comment authors
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Peter
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Peter

tcoyote, I agree that states seem to have less power/influence/backbone (hard to tell though) over business interests. Here in NC legislators and business set up the Rules Commission to override the implimentation of many laws, but those get-arounds are pretty much like DC when a politician can vote for legislation to hoodwink the voters while voting for industry favored rules and sparse funding in committee. Have your cake and eat it too. The “unsolved problem” is how to take influential $$$ wealthy support away from political campaigns/decisions (state and federal) that influence legislation while providing everyone an equal voice. A… Read more »

Scuzz
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Scuzz

PNHP and other physicians want to do away with private insurance companies because then they think no one will catch their fraudulent and abusive billings. Health care fraud–most of it perpetrated by physicians and hospitals–tops $300 billion per year, way more than the costs of the ‘bureaucratic’ insurance companies who try to clamp down on it.
Health insurance premiums go up because health care COSTS go up. I’d like to ask the PNHP and other physician single payer advocates how much of a cut in pay they’d be willing to take in order to help out the average joe.

tcoyote
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tcoyote

Peter, look CLOSELY at Massachusetts and you tell me how well your vision of state action/national goals is going. The cost of the program has DOUBLED in two years. A wealthy provider monopoly (Partners) is charging, basically, a 40% premium in rates over everyone else because no-one can kick them out of their networks. The state’s subsidized health plan is required to pay for in in vitro fertilization and four dozen other “vital” services because no-one in the legislature was willing to take on the entrenched provider interests, and the plan has been able to enroll only about 50 thousand… Read more »

Peter
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Peter

tcoyote, I understand your sceptisim of bureaucracies and that is a real fear. But if this is done right the states will manage the local system while the feds just make sure they meet the overall national goal. To get there, there will be a federal funding portion transferred to the states (like highway funding) and a state funding portion. This can work and be patient responsive and tax accountable if there is a will and if it is not politized every election cycle.

tcoyote
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tcoyote

Makes perfect sense, Michael. Let’s replace a bunch of bureaucracies we cannot control with one bureaucracy we can. Oh, and by the way, get a guaranteed income in the process. Makes perfect sense.

peter
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peter

“I don’t know what the political leaning of either the AMA or this blog is but I offer the following. My publically funded billings (in Canada) are rougly 10% of my billings and 90% of my headaches. Private insurance is dogmatic but highly organized and they (in theory) want to serve the paying client – namely your patient. There is little motivation in the public sector except to limit payment and find “fraud”. Under universal coverage the client becomes irrelavent to the coverage provider and the search for fraud by highly educated high-schoolers becomes even more intense.” Obviously Ian you… Read more »

Tom
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Tom

There are millions of ‘interested middlemen’ in the country; they will not easily allow this unbearably inefficient system to die.
Private health insurance companies exist only in US and healthcare is in crisis also in US only. What else you need to prove that it can not work and needs to be trashed once and for all.
Get rid of the middlemen and everything will be alright.

zenith
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zenith

oh thanks for sharing i was not aware of it.

Ian Furst
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Ian Furst

I don’t know what the political leaning of either the AMA or this blog is but I offer the following. My publically funded billings (in Canada) are rougly 10% of my billings and 90% of my headaches. Private insurance is dogmatic but highly organized and they (in theory) want to serve the paying client – namely your patient. There is little motivation in the public sector except to limit payment and find “fraud”. Under universal coverage the client becomes irrelavent to the coverage provider and the search for fraud by highly educated high-schoolers becomes even more intense.
http://www.waittimes.blogspot.com

PJ
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PJ

They are not “highly trained high school graduates”; many of them are neither highly trained nor high school graduates!! The way health insurance industry is set up, they can never be efficient; the employees are not qualified, they don’t believe in technology, their mindset is appalling, besides they get easy money in the name of premium. I don’t know why it took so long for AMA to figure it out. At least it is a good starting point. Get rid of the so called middle-men like insurance companies, third party administrators, insurance agents/brokers, claims clearing houses, etc….at least a third… Read more »

bev m.d.
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bev m.d.

Your post was amusing and “sort of” on target. (I love the highly trained high school graduates part.) As far as the AMA goes, I am not a member and largely feel the same way you do about them. However, I don’t think it’s arguable that our insurance payment system is as chaotic as they say, and terribly cost-ineffective. In my HSA/high deductible plan, every bill submitted by a provider goes first to Grapevine, Texas, from whence issues the invariable statement that the bill is denied and not applied to my deductible. Next I get a statement from New Jersey… Read more »

peter
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peter

Ok, so I’m trying to figure out the AMA’s angle. What is their real goal in finally accepting a Canadian style healthcare system – I can’t believe this is a sudden transformation that they should be looking out for the patient. Has to do with money somewhere.