How Relevant is the American Medical Association?

Like most doctors, I was busy seeing a full schedule of patients when President Obama addressed members of the American Medical Association at their annual meeting in Chicago.  The speech was billed as a crucial confrontation over health reform, and anticipation had been building for quite some time.   So I was too busy to learn anything about his remarks and the response until I got home.

Then again, I’m not a member of the AMA.  I never have been.  Neither are very many of my  physician friends and colleagues.  In fact, the odds are that your doctor isn’t a member of the AMA, because at best, only between 25-30% of the approximately 800,000 doctors in country belong to it.  And a good percentage (up to half of members according to one report) of those include residents and medical students, who get big discounts on membership and a free subscription to a journal when they join.

Given those numbers, how relevant is the AMA?  And why did President Obama stump for health reform there?

First, like so many influential organizations, the number of doctors who comprise the AMA matters less than their influence in the beltway—they still are a potent Congressional lobby with plenty of cash to spend.

Second, since Barack Obama does his homework, he knows who and what he’s up against.  During the Great Depression, FDR wanted to make comprehensive health reform part of the New Deal.  In doing so, like Obama, he was forced to confront the AMA. We all know who won that battle, but think about how different things might have been if the AMA’s leadership had the foresight to see what a mess American health care has become today.

Indeed, the AMA has a long history of winning wars.   Since its inception in 1847, the group has enjoyed many victories on its way to consolidating physician power.  To its credit, it helped raise the social stature of the medical profession in this country. Prior to its inception, medicine was a trade that included everybody from an educated MD (though the extent and depth of that education varied from medical school to medical school) to snake oil salesmen pushing miracle tonics to cure all your ills.  As it gained traction, the AMA helped to create and implement educational and licensing standards for doctors.   It also emphasized a highly scientific approach to medical care.  In many ways, therefore, the AMA is the reason our image of doctors is one of a white-coat wearing, cerebral and scientifically-minded group of professionals.

But to its critics the AMA is nothing more than a guild that protects its own at all costs.  For example, it successfully marginalized non-physician health care providers (osteopaths and nurse midwives, for example). By doing this, critics state the AMA was able to control the price of health care through controlling the supply of the nation’s doctors.  The most absurd example of the haves versus the have nots were African American doctors. For decades, the AMA discriminated against black physicians (a policy that it finally apologized for last year).

Probably the AMAs most lasting impact on American medicine has been its unconditional marriage to traditional fee-for-service medicine, which tilts higher incomes toward specialists and expensive tests and procedures.  That has have helped drive costs through the roof.  Because of that bias toward specialists, it’s also not a stretch to hold it responsible, in some ways, for helping to create the shortage of  primary care doctors in our country today (according to Matthew Holt of the influential Health Care Blog, the AMA’s membership “over-represents specialists and those in small practices.”).

It’s also been an organization very weary of innovation. In California, during the Depression and Second World War, Dr. Sydney Garfield and construction magnate Henry J. Kaiser joined forces to create Kaiser Permanente, a health plan where Kaiser’s shipyard, steel and construction workers prepaid for their care, which was provided by doctors from different specialties.  It was one of the earliest, if not the first, example of integrated health care that focused on prevention instead of illness.  When the powers that be at the AMA heard about the Kaiser experiment, they perceived as a threat to the status quo (after all, for most doctors, a sick patient is what pays the bills), and discouraged doctors form joining it or attempting to emulate a model where health, not illness, was rewarded.  While the Kaiser model has been successful in California and several other parts of the country, the model has not yet spread widely (full disclosure: I’m a Kaiser doc—though my views here do not necessarily represent those of my medical group).

All those victories, however, are in the past.  Today, with health care costs out of control, millions uninsured and underinsured and an incredibly-shrinking base of members, the AMA is vulnerable to the voices of reform.   Still, history teaches us that it knows how to protect its interests, even if those interests don’t  adhere to its motto “helping doctors help patients.”

If you’re wondering just what its interests are are, look where the two greatest sources of tension are between the Administration and the AMA.  The first is the real possibility of creating a public insurance plan to broaden coverage and get more of the 48 million uninsured Americans relief. Publicly, the AMA hasn’t quite come out against the plan—in fact, the organization spent the better part of last weekend trying to “correct” New York Times reports suggesting its opposition to it.   But there’s no doubt that the AMA doesn’t see “public option” as code for “socialized medicine,” and it worries about a lower cost public plan becoming the first choice for employers and individuals will force doctors profits down.

The next point of contention is tort reform, and limiting the scope and awards of malpractice suits.  As a doctor, it’s hard to argue against this point—many of us practice “defensive medicine” and order plenty of tests and drugs not out of necessity, but rather out of the fear of being sued. In reality, however—and as a piece in this week’s New England Journal of Medicine points out, nobody really knows how much defensive medicine contributes to the overall cost of health care.  Still, as the article points out, even if its 1% of annual GDP spending, it’s more than enough to justify some reform.

But Obama isn’t backing down on tort reform either—he came out and told his audience yesterday that tort reform isn’t on the table because it’s not fair to those who may have been truly injured by a doctor. For that, he received some scattered boos from the audience.  Yet it’s probably not a very risky bet to make that the Negotiator-in-Chief will support some form of medical malpractice reform as a way to garner the AMA’s formal support for a public plan and other aspects of his package.

In the end, however, the fact that most doctors don’t pay much attention to the AMA anymore should be a strong signal to President Obama to keep seeking out opinions from the 70-80% doctors who don’t belong to it.  Some of these doctors  have started new groups, like Doctors for America, and are growing rapidly.  The difference between the old and new thinking were showcased in a News Hour piece the day Obama delivered his speech.   It contrasted the views of a relatively highly-paid orthopedic surgeon, expressing concern about paying his bills, to a relatively underpaid Primary Care doctor, ready to take a small cut in pay so health care can get better for everyone.

Getting back to the question:  Is the AMA still relevant? Only time will tell, but given it sinking numbers and traditional resistance to change and innovation in the delivery of health care in the wake of a groundswell of support for change, it’s hard not to see this grand old institution of American medicine slowing getting sick and slipping into critical condition.  The only thing that could save it is sharing the spotlight with some new, progressive doctor’s groups and coming to the table ready to make some serious reforms.

Dr. Rahul Parikh is a Pediatrician in the San Francisco Bay Area and a frequent contributor to Salon.com and THCB.  Dr. Parikh practices with the Walnut Creek Medical Center and Kasier Permanente.

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23 replies »

  1. Im no professional, but I suppose you just made the best point. You definitely fully understand what youre talking about, and I can really get behind that. Thanks for staying so upfront and so honest.

    16 YEARS IN US – SUED 4X AS CO-DEFENDANT and released after confiscatory billable hours by All the lawyers who deposed everyone but my Dog -for billable hours, even though I was released each time
    Imagine that premium on everything we do, make , use, insert, operate with.etc, etc

  3. Affordable Accessible Legal Care for All Now! One in eight black males is in prison on any given day. Small businesses and working families are crushed by nearly a trillion dollars of tort costs every year. Attorneys and law firms cherry pick lucrative cases while casting off disparity groups to public defenders. Remove the profit incentive and restore the client-attorney relationship! This is reform we can believe in: http://www.SinglePayerLegal.org

  4. It was very interesting to see the interchange between persons. It was easy to tell who was an attorney and who was physician. It was also easy to tell who was in private practice versus large group practice. It is easy to blame the insurance companies. It is easy to blame physicians. It is easy to blame providers. It is easy to do these things, because each person who receives health care believes that he has a perfect right to it. Beyond that he believes that he has a right to consume as much of it as he thinks that he needs. This is the 800 pound gorilla in the room that we refuse to acknowledge or discuss. This is the reason why we are consuming 17% of the GDP.
    The first issue is that the reason why a person needs health care is most frequently rooted in choices that they have made. It has nothing to do with anything the society does or does not do. If a person drinks soft drinks frequently, does not brush regularly he will lose enamel and demonstrate poor dentition, have a greater chance of having oral infections, and facial infections. Now somewhere along the way he sees a physician who fails to notice a spot on the gum at a particular time. Now the facial infection becomes malpractice. Just whose choice produced this course of events? Now the physician is responsible for the result to the poor choices made by this individual!
    Let us take a closer look at things.
    First let us look at insurance. Insurance was created by Lloyd’s of London specifically to cover the loss of transoceanic sailing ships. It started simply where owners would put up a small percentage of the value of the cargo and then if a ship was lost the revenue was removed from the pot in order to stop the loss for an individual and to spread it. This worked well for ships and for losses that are a fixed small percentage of the whole. The amount contributed remains small, and thus the loss is fixed and remains coverable by the premium. If the losses keep growing because of a progressively larger percentage of the insured having losses the premiums have to increase to cover these losses. Why does this not work for health care? It is simple. We have a progressively larger percentage of the insured requiring use of loss. The loss is always spread to everyone. The problem with this system is that all users perceive that the loss is passed to everyone else except themselves. This is simply not true as the losses are passed to everyone collectively. The point is that if individually I were using my treasure to pay for my health care then I would do things to decrease its cost to me. First I would make better choices about my individual everyday decisions. I am told that Safeway has an interesting twist on this in how they provide health care for their employees. If we are always using someone else’s treasure then we will always exhaust it. This is human nature. If the system we have fails to acknowledge human nature it will fail. Consequently the answer is not in a private versus a public system. It is rather in how we create a system so that each person is responsible for his choices and his consequences. In fact if we look below the surface at systems in Europe and elsewhere they cost less because the population uses less resources, because they make better choices. The epidemic of diabetes, obesity, and concomitant heart disease, or hypertension is largely a result of poor choices and lack of exercise.
    * Contributors to high cost of services
    Let us look at this as a group. A number of items will become evident.
    * Malpractice insurance premiums
    Most of the persons who argue against the effect of malpractice premiums used jaded material suggesting that only a bad 5% of physicians commit the vast majority of malpractice that takes place. In fact statistics from the American College of Obstetricians and Gynecologists state that more than 50% of Obstetricians have had one or more claims against them. This is in contrast to the material suggested by many attorneys. Furthermore the malpractice premiums serve to pay for not only the defense attorneys, but also the plaintiff attorneys. The insurance company must remove administrative costs and obtain their 10% or so profit. In addition to this it also serves to pay the patient. Most awards, to a patient, are reduced to two thirds going to the patient, after costs. Thus a large portion of the funds go to administrative costs, costs of litigation both sides with a small percentage actually going to the patient. A person with a “bad baby” sues, often not because of a malpractice but, because there is nothing within the system that takes care of the expenses of such an infant including the high medical cost. A system attached to needing to work in addition to receive health care does not take care of this problem. When we look at this we find that we need a system that takes care of persons with bad outcomes. A large part of the cost of a bad outcome is medical care.
    Thus the need for a system that allows malpractice premiums and insurance benefits only attorneys, plaintiffs and defense. They do not actually benefit the patient or the physician or other provider.
    Let us consider how negligence is defined. This is an act that would not be done by a reasonable person of similar training. If you go to one hundred physicians with the same problem you are likely to get almost one hundred different ways to solve the problem. Some of these will vary significantly from others. By this definition most of them could carrying on malpractice. Each person has different abilities. Each surgeon will perform the same procedure differently. Each person will heal differently and it is the combination of their healing and the surgeon’s treatment that produce the result. Even the clearly negligent action of leaving a sponge in an abdomen can be asymptomatic in one patient and another who had similar surgery performed admirably have unceasing pain. The basic issue is that the outcome has little to do with what was done. If you doubt this, google the following (sham surgery orthopedic Baylor). You will find some interesting concepts.
    * New Technology
    New technology is always more costly than technology before, because frequently it goes to a new level of examination. Often this is an order of magnitude cost. Consider X-rays vs. CT-scans vs. MRI’s vs. PETscans. The never-ending affair with new technology contributes significant cost. Frequently this is not absolutely necessary to get the information though one may move from 96% certainty to 98% certainty. This would make a difference if knowing completely about things made a difference to outcome. Sadly as the increasing costs of health care has shown, there is really no difference in outcome. In Obstetrics there came the electronic monitor which allowed interpretation of the monitor strips frequently leading to an increased C-section rate. However, the rate of cerebral palsy is unchanged. It is interesting when the statistics of the U.S. is compared with other countries. We go after cases which in other countries are considered simply losses. These are included in our statistics and are seen as a measure of how our system is failing. The time has come to compare apples with apples.
    * Cost of Defensive medicine
    There can be no real assessment of the cost of defensive medicine. One issue is that in the old days a diagnosis was made clinically and confirmed with laboratory data. This is highly efficient and not as costly. Now diagnoses are made by ordering a battery of tests and using the positive and negative ones to come up with a conclusion. This is at the heart of defensive medicine. It is the need to create a pathway that someone else can follow to justify the reason why you did what you did. It is indeed to create an unarguable path to your conclusion. Thus defensive medicine has changed how we practice and how we order what we order as physicians.
    * High cost of medical training
    The cost now to go to college for four years and then attend medical school is somewhere on the order of $500,000.00 if one goes to a comparable private institution. After footing this bill we then say that this person should become a family physician and be paid $120,000.00 a year. How can they do this and pay for the second mortgage that their educational cost has become. If you go around the country you will find that the majority of family practice physicians in residency are foreign trained. Why? Because, most of them, they are coming from countries that have subsidized their medical education. Unlike in this country, they have had their medical education paid for by their society and now our first world society is taking them away. They have not incurred the costs of their American counterparts who move to specialties in order to recover some of what they have spent.
    In closing this is a consumption driven problem. Looking for people to blame, while the individual is not held responsible for his choices will crush the economy of this country. 17% GDP is about 10% more than we can afford, since on average no other society spends more than this. If we do not we will have no resources with which to purchase other goods and services which will make the whole economy collapse. It is this way because the individual is the sole determinant in creating his own reality, particularly in the way he sees others affecting him.
    Visit http://www.thehealingattribute.com and see some of the news letters. They discuss the lack of sustainability present now in the system.

  5. Thanks Dr. Parikh for your post. I echo your comments of how little the AMA represents most practicing physicians. In fact, in response to President Obama’s address to the AMA, a group of progressive physician organizations sent a letter to the President noting their support for the public plan option (which you can read here: http://www.seiu.org/images/pdfs/Joint_Physician_Statement_20090615-1.pdf ), and collectively represented 215,000 MD’s. In fact, one of the organizations, the National Physicians Alliance, grew directly out of the need for an alternative physician voice to the AMA.
    Your comment of how the AMA discouraged physicians to join Kaiser despite how effective the group was in placing health as a priority should be alarming. Effective, cost-saving, accessible, quality care should be promoted and replicated, regardless of what kind of market system we have. Exposing the irresponsible philosophies of the AMA is not about being reactive, it’s a matter of being true to our profession. Thanks again for the post.

  6. Greg – Thank you for your posts on malpractice reform. As with almost every topic, the AMA’s solution to malpractice is simply one that almost exclusively benefits the AMA and its members. Never mind anyone else who might be affected by the resolution to this issue.
    The AMA’s solution to medical malpractice the past several years has largely a hard cap on pain & suffering at $250k. Granted their needs to be reform of the legal process and it likely involves a heavy hand of meditation before proceeding to the courts. Frankly, all parties would be likely better served by a through and sound meditation process than heading to the courts.
    The AMA though has done a deplorable job of its efforts for greater transparency and at every nearly term has undermined efforts at reporting errors and sanction efforts toward rotten doctors. One you pass your medical boards, you are a doctor for life. You basically have to do something so morally reprehensible or so idiotic as to actually get disciplined let alone barred from your profession.
    With the exception of the police (maybe public school teachers), I have never met a professional society that protects their rotten members as much as the medical profession protects rotten physicians. The amazing thing too is that physicians generally have a pretty good idea of who is a rotten doc yet they do buckus about it.
    I had a good family friend who was a physician and “ratted” on a fellow physician at a prominent hospital in the Philly area. It resulted in the physician getting severely disciplined by the PA Medical Board and losing his admitting privileges to that hospital for a while.
    Subsequently, the family friend was treated like Frank Serpico and he subsequently relocated from the Philly area given all of the harassment and issues he had to deal with from other local physicians.
    Just try as a physician right now to “rat” on a fellow physician at a community hospital that is the only game in town or against a fairly prominent doctor in an AMC or large tertiary hospital. Almost guaranteed that physician will be severely ostracized by a bunch of his fellow physician colleagues.

  7. Greg,
    It sounds like your legal practice is thriving. You lawyers talk big but you take no responsibility when you make mistakes. Then it is, “Oh everyone makes mistakes”. You guys charge 300, 400, 500 per hour and if you make a mistake, we have to pay you to correct it.
    Most Physicians have to worry and doublecheck, triple check their work, document like crazy because we can be sued for outcomes. Not for medical mistakes, but bad outcomes. All you trial lawyers have so much money and marketing power that you blast through radio, tv, billboards constantly trying to encourage people to sue for bad outcomes. It is not patients, but their families who sue. The families are not there when diagnonsis or treatment is ongoing, but once a bad outcome and a snake oil lawyer gets through to a family member suddenly the doctor is the one at fault.
    You lawyers have done such a great job that whenever there is an unusual medical records request you cause agitation and energy sapping worry that something was not documented or something was missed.
    You guys are the base reason for the primary care crisis. There are many physicians that don’t mind the low pay, or even the huge number of patients that need to be seen to pay the bills. But the constant knawing worry about losing one’s whole life not due to anything one has done is not something most humans can live with.
    You are the base cause for the loss of primary care crisis.
    Any curtailing of the trial lawyers and their significant lobby will have significant positive effect on the health care system. Even something as simple as no advertising.

  8. It seems like the California model (MICRA System) certainly is working. In the State of California, medical malpractice premiums rose 450% in the 13 years following passage of California’s cap on victim compensation.
    California’s Proposition 103, a 1988 voter-approved insurance reform initiative decreased medical malpractice premiums 2% in the 13 years following enactment of insurance rate regulation.
    Perhaps that is why some of our more intelligent governement representatives, in an effort to protect consumers from dubious insurance industry tactics, legislation was introduced that would mandate medical malpractice insurers to provide reduced rates for doctors in good standing. This provides the much needed ammunition to produce “real” results in reducing medical malpractice insurance rates.
    Evidence shows “cap” reform is not the answer, while mandated lower insurance rates are. A study by Weiss Ratings, an independent insurance-rating agency, found that between 1991 and 2002, states with caps on noneconomic damage awards saw median doctors malpractice insurance premiums rise greater than in states without caps.
    But won’t this hurt the medical malpractice insurance industry? Yes, as I stated above, I can see why doctors and insurance companies are working together to take away patients’ legal rights, to protect insurance insurance company profits and doctors’ income.
    In California’s MICRA System, insurers had promised doctors lower premiums but instead simply captured higher profits in California. MICRA’s arbitrary $250,000 cap also failed to discourage medical negligence because doctors, hospitals and HMO’s are faced with insignificant liability for their actions, even if they repeatedly commit medical errors.
    Thank goodness doctors aren’t still investing their money in “strip-malls” like in the 70’s. The single most cause of rising medical malpractice insurance rates had been the insurance companies investment of medical insurance premiums in the stock market and not in a secure pool to cover medical insurance pay-outs (which have been only about $30,000 per claim, according to a 2001 study by the Consumer Federation of America). Perhaps they should change their “brokers”?
    The economy had soured, leading to investment losses and lower porfits for malpractice insurers. To fill the financial void, insurers raised liability premiums for many insurance lines, including big hikes for doctors. In reaction to the steep increases, doctors and insurers have falsely blamed higher premiums on injured patients who exercise their right to seek remedy in the courtroom.
    The malpractice insurance debate centers not on compensatory damages but on the money awarded to patients for pain and suffering. This has traditionally been a way to equalize the inherent unfairness in a legal system that bases the amount of compensatory damages on lost earnings, as well as medical costs. A malpractice-related death of an 80 year old, a low wage worker or an infant are examples of cases that would automatically result in low compensatory damages. The pain and suffering award is used to level the playing field.
    The repeated use of the word “frivolous” in conjunction with malpractice lawsuits misrepresents the situation. A cap of $250,000 would be put on a patient’s damages for pain and suffering. But if a patient is entitled to any compensation for pain and suffering, their claim is by definition not frivolous. Frivolous claims are thrown out of court. In fact, many states have a requirement to pay for an independent review of the case to determine whether there is good reason to even initiate a malpractice lawsuit (most respectable law firms have already been doing this).
    I agree wholeheartedly that medical care is in desperate trouble. However, the complexity of the issue is entrenched on “caps”. Our U.S. Senators got a taste of what it is like being up against the insurance and medical lobbies. The Senators wanted a bipartisan bill that would win the support of doctors as well as the majority of the Senate, to assure passage. But, there is certainly little doubt that the American Medical Association has definite concerns about medical malpractice jury award caps…..defend it at “any” cost! This is the extent of their way to solve the medical malpractice insurance rate problem, and nothing else.
    Somehow, the crucial issue of malpractice itself and ways to reduce injuries to patients rarely seem to enter the story. There is no litigation crisis, but there is a health care crisis. The medical lobby should look in the mirror rather than team up with the big insurance companies to deny injured patients the right to challenge malpractice doctors.
    Some Needed Changes:
    1. Better reporting of hospitals’ and physicians’ health care quality. Consumers should have easy access to hospital quality data already collected by the State Health Department. Such information should be contained in a “Hospital Profile” that includes reports of the experience level of a hospital and its physicians in performing particular surgeries and other treatments.
    2. Create a system of periodic recertification of physicians. The National Academy of Sciences’ Institute of Medicine has recommended that physicians be recertified to assure that they continue to be able to practice as competent professionals. Over time, physicians may see some of their skills erode and it is almost impossible to keep current with the latest medical research and advances in technology. In an effort to identify these physicians before a patient gets harmed, a system of recertification based on testing competency is needed.
    3. Require the State Health Department to review malpractice payments by physicians to identify potential problems. A small percentage of physicians account for an extremely high percentage of malpractice payments. The overwhelming majority of physicians make no malpractice payments, yet their high premiums help subsidize the losses caused by a few. The State Health Department collects from insurers the data showing the malpractice payments of physicians and a law should be passed to make them use that data to identify problem doctors.
    4. Of those 5% of doctors that commit malpractice, only 7.6% have ever been disciplined by state medical boards. State medical boards should be given more money and staff to investigate complaints. So much has been glossed over and avoided by them at every level. They should “discipline” all bad doctors and sever links with state medical societies, avoiding the inference of improprieties.
    5. Require health care providers who make a medical mistake to tell the patient and his or her family when such a mistake occurs and causes patient harm. Physicians are required by their own code of ethics to report medical mistakes even if such admission exposes them to liability. Since virtually no physician reports such errors now, the force of law should back up this common sense ethical requirement.
    The American Medical Association and other medical trade associations and unions have effectively killed the Institute of Medicine’s 1999 recommendation for a mandated reporting system for serious medical errors, which would be made available to the public. The Institute recommended that a system be created for periodic re-certification of physicians to assure that they keep their skills and information up to date. Organized medicine continues to oppose the most basic reforms that help to prevent injury to a patient.
    If you’re going to solve the so-called medical malpractice insurance crisis, you need insurance reform, along with health care reform.

  9. Dr. Dussia writes:
    > It takes alot of $1,500 payments for pregnancies
    > with 6 to 7 months of prenatal care to pay for a
    > $260,000 insurance premium in South Florida. And
    > we still have to pay the light bill.
    Yes, around 175 of them. This sounds like a Medicaid global fee, is that right?

  10. Mr. Pawelski,
    Physicians began to be abandoned by big name insurance companies in the mid-1970’s so instead of “going bare” we started our own companies. As we continued to have ups and downs in the malpractice insurance market, more physician oriented companies appeared.
    Doctors now prefer companies started by other doctors and run by other doctors because these companies fight for their share holders rather than settle with plantiffs attorneys in order to avoid court room battles.
    Cost of the premiums is determined by actuarial analysis and watched closely, at least in my state, by the Commissioner of Insurance. If the premiums get too low, the plan is not sound and will become bankrupt, if the premiums get too high, the doctors don’t buy. Some do go bare from time to time. Those are the facts.

  11. Why do malpractice premiums keep rising to astronomical levels?
    The doctors are the insurance companies!
    According to the Physician Insurers Association of America, a trade group of about 50 doctor-owned malpractice insurers, they cover about 60% of U.S. doctors in private practice and hospitals.
    Why are the profits of these doctor-owned insurance companies that doctors want to protect?
    Limits on the rights of people hurt by medical malpractice will victimize them and their families further while helping neither patients nor doctors. The real beneficiaries will be insurance companies, including the doctor-owned malpractice insurers.
    Solving this crisis will involve a three-legged stool of legal reforms (not tort reforms), insurance reforms and reduction of medical errors.
    In the meantime, private insurers will keep placating physicians because they fit into their overall plan. Under the present HMO-for-all type systems, doctors are becoming employees of the hospitals, instead of remaining as independent contractors.

  12. Yes, if malpractice is such a small part of health care costs, then why do malpractice premiums keep rising to astronomical levels?
    The other point is that it is the FEAR of being sued, not actual malpractice payouts, that drives defensive medicine. People who point to parity of costs in states with and without malpractice caps are missing the point. Once sued, no matter the outcome, a doctor must report that on every single reaccreditation form or application for insurance panel for the rest of his professional life.
    Ironically, doctors would be better protected against malpractice premiums if they gave up the small practices they so value, and aggregated into large groups or ACO’s or integrated delivery systems or whatever you want to call them. Do not dismiss these groups out of hand.

  13. Mr. Leith,
    The facts show that in California, where caps were put on pain and suffering more than 30 years ago, medical malpractice premiums continue to be about 20-30% of premiums paid in Florida for the same coverage for the same specialties.
    When California looked at increasing the $250,000 cap on pain and suffering several years ago, they left it unchanged because of the effect it had on keeping premiums down–for decades. Do you know of anything else that costs less in California?
    Malpractice premiums are another overhead expense for clinicians just like the electric bill. It takes alot of $1,500 payments for pregnancies with 6 to 7 months of prenatal care to pay for a $260,000 insurance premium in South Florida. And we still have to pay the light bill.

  14. MG writes:
    > Medical malpractice is largely a complete
    > red herring when it comes to medical costs.
    The “MedMal comes to 2%” argument is also a red herring. It is true that MedMal premiums total maybe 2% of the total spend for medicine, and it runs 5 – 10% of practice expense depending on specialty. So from this point of view it seems “just a cost of business” and not such a big deal.
    Getting sued is a huge distraction for the docs individually — they don’t get paid for defending themselves, they get paid to take care of the patients that haven’t sued them yet 😉 Their personal reputations are on the line each and every time, and that’s the totality of a doctor’s Stock in Trade: his reputation.
    So, they spend other people’s money to 1) reduce the chance they’ll be sued at all, and 2) reduce the chance they’ll be found liable if they are sued. At least the received wisdom is that so-called defensive medicine has these effects. Besides, the patients seem to want it.
    But this is a LOT of money: estimates of the cost of defendive medicine run around 25% of the total spend.
    Even with reasonable tort reform, I don’t see this changing — so what if awards are capped and cases are heard in special MedMal courts? How does this change anything at all for the individual docs? I don’t think it does, and so I don’t think it will change their behavior.

  15. Normally, my overall take for healthcare would see a greater need for market forces. If doctors were paid by their patients for their expertise and pharmaceutical companies were paid by patients for their products, patients would force the costs to come down by voting with their feet. The market could be an elegant, efficient and fair. However, people are not a commodity and market forces have not had a good track record in health care. We have to think of people and not products.
    Physicians respond to economic forces just like everyone else. If a physician is a specialist, like an orthopedic surgeon, I’m sure he/she feels more reasuring than if they were a gastroenterologist. They can feel free to become an orthopedic surgeon in a free-market health care society, but do patients have to suffer because they have a problem with their digestive tract and can’t find a gastroenterologist because the free-market doesn’t pay enough for them to do their operations?
    The porous policies of the private market: imposing preexisting condition exclusions, insurance rates that vary by health status, gender, class of business, or claims experience, and levy lifetime or annual limits on benefits and limit the cost sharing for certain preventive services and immunizations, have cost this nation billions of dollars of uneeded health care costs.

  16. There is nothing more difficult to carry out nor more doubtful of success nor more dangerous to manage than to introduce a new system of things; for the introducer has as his enemies all those who benefit from the old system, and lukewarm defenders in all those who would benefit from the new system. — Niccolo Macchiavelli
    The AMA represents the care provider stakeholders who benefit from the old system. They are still powerful and are likely to remain so for at least another generation.
    No strategy can hope of being successful unless it is effective in the following areas:
    (1) Remove the link between increased health care spending and increased (insurance, care provider, pharmaceutical, medical equipment manufacturer) stakeholder wealth.
    (2) Realign market forces so that stakeholder wealth is contingent upon more good health not more sickness.
    (a) fee for service and pay per pill must go away.
    (3) Protect stakeholders’ wealth from market fluctuations
    (4) Protect workers’ rights and income from market fluctuations
    (5) Create a free market.
    When the market fluctuations stabilize remove the worker and stakeholder protections. Institute and enforce a system of laws that protect any segment of the market from gaining undue influence.

  17. As for the AMA, I find it interesting that the Republicans have tried to crucify the UAW for the failure of the American auto industry (and they do have a few very valid points but it was more nuanced than that) but the Republican party has no criticism of the AMA even though the AMA has largely acted like a union for quite some time and generally been a huge roadblock to any type of reform to the U.S. health care system for the past 50 years and paid no heed to controlling U.S. healthcare costs.

  18. Greg – Thanks for pointing that out. Medical malpractice is largely a complete red herring when it comes to medical costs.
    It is a real issue for certain specialties and sub specialties (OB/GYN with deliveries, surgeons with neurosurgeons and a few surgeries paying very large annual fees). Additionally, a few geographic areas of the country are much worse than others in terms of the per capita number of lawsuits.
    The data you posted and from other sources like MGMA, AMGA, and others show that medical malpractice costs as a % of operating expenses really haven’t increased at all for an overwhelming majority of physicians. Plenty of other operating costs have including certain administrative issues.
    Reality is that medical malpractice is largely a political issue. Republicans want to destroy a key source of revenue for trial lawyers lobby because they are heavy political contribution donors to the DNC and Democrats in general. It isn’t about truly holding down medical expenses or the issues that a hard cap with a low number would cause to actual patients who receive truly are damaged for life by poor and inept medical care.
    Democrats are largely beholden to trial lawyers because of their outsized political contributions and frankly stmy/drag their feet at any chance they get for real reform. So instead of ending up with some sensible reforms (and there have been some suggested that work out meditation and other ideas) you largely get the ineffective status quo because of the political gridlock on the issue.

  19. Shouldn’t we be wanting a system that lessens the prevalence of medical errors, provides an avenue for compensation without undue reward for those who are injured by medical negligence and place the ultimate cost of such compensation on those whose conduct is the most reckless?
    The real malpractice crisis is the fraction of doctors who commit most of the negligence and medical errors. Just 5.3 percent of doctors are responsible for 56 percent of medical malpractice payouts nationally, according to the NPDB.
    The only people who benefit by medical malpractice reform are the doctors and hospitals who commit the malpractice in the first place. Why should innocent victim’s rights to seek compensation be limited? That just rewards the wrongdoers. To help eliminate medical malpractice, state Medical boards have to do a better job of weeding out the bad doctors who cause most of the harm.
    And the reason most physicians and nurses do not speak up against these incompetent physicians is that there is a very real and efficient retaliation system in place in most medical institutions. It’s a falacy to believe that physicians are empowered to “police themselves.” This intimidation is getting worse and threatens any real improvement in patient safety issues.
    Most caregivers risk their jobs, priveleges, lawsuits, malpractice charges, increased premiums, and defamation, when they “speak up.” The only connection most physicians see between identifying substandard care and effect is malpractice premiums go up and payouts get bigger, but the practices continue unabated.
    There are extremely ethical and wonderful doctors who are giving up their practices because premiums are so high and they have seen such bad care coming along they are not willing to lower their standards any more and decide to get out. General consensus is that the public doesn’t care. I prefer to think it is they don’t know, but maybe they don’t care.
    A study done by the U.S. Department of Justice confirmed that the much-hyped medical malpractice crisis simply doesn’t exist. The total cost of all medical malpractice insurance is less than one percent of the total health care bill. Most cases brought against doctors are dismissed and the ones that go to trial are generally won by the doctors.
    Again, the bottom line is the only persons who benefit by medical malpractice reform are the doctors and hospitals who commit the malpractice in the first place.

  20. The AMA remains the largest organized group of physicians in the country. Does not make them relavent? Yes.

  21. AMAzing,
    good comments, and thanks for reading–the resurgence of white coated paraprofessionals and snake oil folks must have at least some of its origins in a backlash to the AMA. Great screen name, btw

  22. AMA is depreciating the profession it built. Snake oil is coming back disquised as comparative effectiveness controlled by computer controlled recipe books, followed by paraprofessionals dressed in the white coats no longer in the AMA’s favor.

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