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Guess what, The AMA controls what doctors charge for services too.

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posted on Mar, 15 2011 @ 08:39 PM
If it isn't bad enough that the AMA has artificially kept the number of doctors down to drive up medical prices, they also get to set the prices doctors charge for their services. Talk about the foxes guarding the hen-house.

Their policies have resulted in fancy procedures getting all the dough while the primary care physicians, who we all rely on for day to day preventative maintenance, are barely getting by.

The Fix Is In
The hidden public-private cartel that sets health care prices.

The root of the shortage can be traced to 1985, when a Harvard economist named William Hsiao developed a scale to measure the relative value of every single one of the thousands of services provided by doctors, a job later compared to measuring "the exact amount of anger in the world." For example, Hsiao's team deemed that a hysterectomy required 3.8 times more mental effort and 4.47 times more technical skill than a psychotherapy session. In 1992, Medicare formally adopted Hsiao's concept; private insurers followed suit. Today, this relative value-based system sets the prices—and therefore drives the priorities of American medicine.

Here's how it works. Doctors do a job—like placing a coronary artery stent, reading an EKG, or spending an hour examining and diagnosing a patient with a complex problem like insomnia—and earn something called "relative value units." In 2009, according to Medicare, the stent guy scores about 24 units for his relatively quick procedure, the EKG person gets 0.5 units for the 10 seconds his job requires, and the poor internist gets only 2.5 units for his hour of time. Figuring a doctor's total take per task is straightforward: Medicare adds up a doctor's total RVUs, multiplies the total by a fixed amount (roughly $40 right now), and writes the check.

Fundamentally, the entire payment model of American health care drives medical centers, doctors, and hospital managers to push for more fancy procedures at the expense of primary care doctors. How'd we get here? Since 1992, Medicare has depended almost entirely on the American Medical Association for guidance on how relative values should be set. In a devastating critique published in the Annals of Internal Medicine, scholars from the Urban Institute and the University of California-San Francisco explained that Medicare uncritically accepted 95 percent of the AMA's recommendations, which are formulated by the group's Relative Value Scale Update Committee, or RUC.

This price-fixing process explains why people can't find primary care doctors in Massachusetts. By law, Medicare's costs are capped so what one doctor gains, another loses. (Medicare has long "rationed" care in this manner.) To meet budget targets, Medicare doesn't alter the relative valuations of different medical services; instead, it simply cuts the multiplier (say, from $40 to $38 per RVU), which just worsens the disparity between specialists and primary care doctors.

The funny thing is, paying more for medical care that's more valuable does makes sense. That's how capitalism should work. Unfortunately, ever since William Hsiao created the system in 1985, the collusive market valuation of medical services considered only the doctor (paying for his or her mental effort and stress, for example). The system completely fails to consider the value to the person actually getting the service. If we did, for example, angioplasties for stable chest pain would never be worth so much more than outpatient visits to lower cholesterol and blood pressure, which are just as effective.

Read more: Slate

The AMA cartel seems to be doing everything in its power to drive up prices while simultaneously lowering the quality of care.

edit on 3/15/11 by FortAnthem because:

posted on Mar, 15 2011 @ 09:27 PM
It's pretty obvious to anyone who has looked into it that the medical field has been elitist for the longest time. We could have so many more doctors helping people, animals and research in the USA. Every year there are students that lack the big money or pedigree that will allow them to one day practice medicine.

It was not all that long ago that only the sons of the well-to-do and connected went to schools of higher learning. It's always the same old song: those with money and power make sure those 'from good homes' ( as in their rich white children, or their rich neighbors rich white children ) get to play the reindeer games. The same curse of financial success has long been heaped on the shoulders of the children of the wealthy & powerful families in industry, commerce, politics, you name it.

Of course the ivy-laden old schools have let a few tokens & poverty-stricken sneak in over the years in an attempt to appear well balanced, fair and beyond bigotry or racism. Too little, too late.

If you know a health care professional you probably know the sad truth about a lot of doctors. Very few graduate at the top of the class. The best and those from better schools do not become General Practitioners in Your Town, USA. Money knows money and they don't want to know you. Nurses know who are good doctors and who they would not let touch their own mother.

Just like Police Departments conduct their own investigations that inevitably clear almost every single shooting, tazering, use of force or claim of abuse against a police person, so too go all the professions. Get screwed by a lawyer? Good luck finding another lawyer to right that wrong. Doctor screws up? Other doctors are not about to speak up, unless they work for insurance companies far, far away.

The whole damn lot of them should be ashamed. Incompetency should never be allowed to linger.

posted on Mar, 17 2011 @ 01:04 PM
I know what some people are thinking; what's wrong with members of a profession setting the prices for their services, that's how capitalism works right?

The problem is this system is anything but capitalism; The government has awarded one group monopoly control over an entire industry with the power to fix prices across the board for the entire nation. No variations for cost of living in certain reigons, and doctors are not allowed to set their own individual prices to be competitive and lure in more business.

The only way doctors can be competitive is to offer the latest and newest technology and the most luxurious amenities in their offices. This forces prices to run up as each doctor's office is constantly upgrading to the newest and hottest thing in order to increase their customer base. Instead of improving the quality of their care, they must increase the volume of their business instead to pay for the constant improvements which results in less face to face time with patients and an assembly line mentality toward treatment.

The patients don't care because they never see the bills their insurance company is racking up to pay for all the bells and whistles. Then they have the gall to gripe when their insurance premiums jump dramatically every year, blaming those greedy insurance execs.

People need to realise that it is the greedy SOBs running the AMA that are at fault for most of our health care woes.

posted on Mar, 17 2011 @ 07:38 PM

Is this thing on?

All of a sudden nobody cares about health care prices. I guess...

posted on Mar, 18 2011 @ 07:27 PM

Originally posted by FortAnthem

Is this thing on?

All of a sudden nobody cares about health care prices. I guess...

OMG, FortAnthem. I told you we should have served cookies & coffee!

posted on Mar, 18 2011 @ 07:30 PM
Interesting....My insurance company sets the acceptable charge for any given procedure. It's in the contract between my insurance company and my medical provider. It must suck for the non-insured to have to succumb to prices set by the AMA...all the more reason for health care reform!

posted on Mar, 18 2011 @ 07:53 PM
reply to post by FortAnthem

I know what some people are thinking; what's wrong with members of a profession setting the prices for their services, that's how capitalism works right?

No, that is not how capitalism works. Under capitalism the price is dictated by what the market will bear, and cartels engaging in price fixing is not allowed. Further, credentialism is not a part of capitalism either. The whole licensing schemes imposed upon professionals is just one more nail in the coffin of a free market. I get that there are plenty of people who believe that the licensing of doctors is a good thing, but the reality is that these licensing schemes do little to protect people from incompetent doctors. The AMA has also managed to keep one of the best kept secrets in the United States, and that is that doctors are the third leading cause of death in the U.S.

This next link is to the pdf of the actual article written by Barbara Stanfield published by the JAMA:

People are not just paying an arm and a leg for medical services, they are loosing arms, legs, and even their lives because the high price of medicine is increasingly being practiced by incompetent fools, and the licensing schemes imposed upon this profession has ensured a closed system. All closed systems tend towards entropy and I would suggest that the medical profession has reached entropic levels.

posted on Mar, 18 2011 @ 08:04 PM
The AMA (American or Australian) control everything, not just prices. They and their serpent logo even control what advice doctors are allowed to give you.

I find it annoying when a doctor of 30-40 years experience has to give advice "unofficially" to avoid their wrath.

posted on Mar, 18 2011 @ 09:41 PM

Originally posted by Aggie Man
Interesting....My insurance company sets the acceptable charge for any given procedure. It's in the contract between my insurance company and my medical provider. It must suck for the non-insured to have to succumb to prices set by the AMA...all the more reason for health care reform!

Your insurance company tells you that but in reality, most insurance companies simply adopt the same payment schedule as used by medicare.

Since the majority (85%) of Americans have health insurance, they do not directly pay for medical services. Insurance companies, as payors, negotiate health care pricing with providers on behalf of the insured. Hospitals, doctors, and other medical providers have traditionally disclosed their fee schedules only to insurance companies and other institutional payors, and not to individual patients.

As part of Medicare's pricing system, Relative Value Unit (RVUs) amounts are assigned to every medical procedure. One RVU translates into a dollar value that varies by region and by year; in 2005 the base (not location adjusted) RVU equaled roughly $37.90. Major insurers use Medicare's RVU calculations when negotiating payment schedules with providers, and many insurers simply adopt Medicare's payment schedule.


The payment system used by medicare is the one almost entirely dictated by the AMA. The insurance company does a good job of assuring you that they work hard to negotiate prices with individual service providers but, for the most part this is just good PR.

The AMA is the one they are negotiating with and with their vast power and resources, they can pretty much dictate their price schedule to any insurance provider. By setting their prices across the board, it becomes impossible for your insurance provider to go to another doctors office seeking a more competitive price; all doctor's offices use the same price schedule dictated to them by the AMA.

The health care system is definitely in need of serious reform. The first reform needed is to destroy the monopoly power awarded to the AMA by the government to allow health care providers to act as individuals and give them back control of their own pricing so they can compete for business the right way and this will give back to your health insurance provider the REAL ability to negotiate prices to keep your premiums down.

edit on 3/18/11 by FortAnthem because:

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