The Right Prescription

The AMA’s Quisling Strategy

Collaborating with the enemy on health care reform.

By 10.22.09

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When Norwegian politician Vidkun Quisling was tried and shot for abetting the Nazi occupation of his country during WWII, his name entered the vernacular as a synonym for "collaborator." It is difficult to think of a more appropriate adjective to describe the health care "stakeholders" who have been genuflecting at the altar of "reform" since the Obama administration marched into Washington last January. While actual patients have protested at town hall meetings and organized demonstrations against Obamacare, the American Medical Association, the American Hospital Association, the Pharmaceutical Research and Manufacturers of America, America's Health Insurance Plans and a variety of other industry groups have been hard at work currying favor with their new masters.

The most transparently self-serving of these stakeholders has been the AMA. The waning but still influential physician association was among the first to join with the new administration in its effort to take over U.S. health care. The President of the AMA, J. James Rohack, began parroting the empty platitudes of reform shortly after the election and jostled with his fellow quislings for a conspicuous place at the May press conference at which Obama announced his "historic" cost-cutting deal with industry players. As Rohack put it at the popular medical blog, Kevin, MD: "In an unprecedented endeavor aimed at achieving health-care reform this year, the American Medical Association stood with President Obama and other key health-care stakeholders Monday to announce efforts to 'bend the spending curve' on health care."

But Dr. Rohack wasn't there to bend the spending curve or to promote genuine health care reform. He was there to protect his paycheck. Specifically, he wants to stop an imminent and deep reduction in the amount of money the government pays doctors. Medicare's physician payment scheme, the Sustainable Growth Rate (SGR) formula, mandates a 21% cut -- and it is due to be implemented next January. It is this "curve" that the American Medical Association is truly seeking to "bend." As it is phrased at the AMA website: "Permanent reform of the archaic Medicare physician payment system is among the core principles the AMA is urging Congress to include as part of comprehensive health system reform this year." Dr. Rohack is obviously hoping that collaboration on the Democrat reform charade will earn the AMA a presidential pardon from SGR-mandated cuts.

The American Medical Association was not always so ready to collude with the enemy. Motivated by well-founded fears that government-run health care would inevitably lead to bureaucratic interference in the practice of medicine, the AMA actively opposed Harry Truman's post-WWII attempt to impose nationalized health care on the country. Likewise, the organization vigorously opposed the enactment of Medicare during the early 1960s. It even launched what is often cited as the first viral marketing campaign, "Operation Coffee Cup," featuring an LP of Ronald Reagan describing the dangers of socialized medicine. During the early 1990s, after some early flirtations with the Clinton health care "reforms," the AMA eventually joined the coalition of health industry organizations that provided Hillarycare with its much-needed end-of-life counseling.

The once-feared organization has become far more pliant in recent years, however. Since the Sustainable Growth Rate formula was imposed in the 1990s, the AMA has repeatedly been forced to go hat-in-hand to its Beltway masters for stays of execution. Each time, Congress has issued a reluctant reprieve from payment cuts -- but not without a price. In exchange for its 2008 reprieve, the AMA was forced to cooperate with congressional Democrats in their disgraceful move to gut Medicare Advantage (MA), a program that has greatly benefited poor and minority seniors. In that tawdry episode, the Dems attached an SGR waiver to a bill that cut funding for Medicare Advantage, whereupon the AMA cravenly began parroting DNC talking points about insurance company profits. This collusion helped the Democrats push through the first of several cuts in MA funding.

This year, the price of the AMA's reprieve is support of whatever health care legislation emerges from Congress. And, so long as the final bill does away with SGR, the organization is obviously prepared to be a willing accomplice in whatever fraud the Democrats perpetrate. Thus Dr. Rohack rhapsodized about HR 3200, the widely-panned House version of Obamacare: "This legislation includes a broad range of provisions that are key to effective, comprehensive health system reform." HR 3200 includes nothing of the sort, but it does contain a provision that would repeal SGR. Meanwhile, the absence of such a provision in the Senate Finance Committee bill produced a noticeably tepid response from the good doctor, despite a $250 billion sop to Cerberus that purports to solve the SGR problem.

There are, of course, legitimate reasons to oppose the SGR. This payment formula, like the PPS methodology to which the federal government subjects most hospitals, is nothing more or less than a Soviet-style price control system. And, as with all price control schemes, the SGR has failed to control costs and created distortions in the market. One of its most conspicuous effects has been a shortage of primary care physicians willing to treat Medicare patients. Unfortunately, the current AMA leadership has decided not to seek any real change in this perverse and counterproductive system. Instead of using the association's leverage to force genuine free market reforms, Dr. Rohack has settled on a strategy designed to produce a special dispensation for his members, regardless of the damage it does to our health care system.

The tragic irony of this cynical strategy is that it will not work. As Vidkun Quisling discovered in October of 1945, the advantages of collaboration are always short-lived. A temporary reprieve from Medicare payment cuts is all Dr. Rohack will have gained by delivering his patients and colleagues into the hands of Washington's health care bureaucrats. Because socialized health care systems are explicitly designed to circumvent the market mechanisms that actually control costs, they must always revert to the only remaining alternatives: rationing services to patients and cutting payments to providers. All government-run systems do both, and Obamacare will be no different. Once the President has finished using them for political cover, the AMA and the rest of the "stakeholders" will be abandoned to the depredations of bureaucrats and the revenge of an angry public. This is the inevitable fate of all quislings.

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About the Author

David Catron is a health care revenue cycle expert who has spent more than twenty years working for and consulting with hospitals and medical practices. He has an MBA from the University of Georgia and blogs at Health Care BS.