The President of the American Medical Association Is Disingenuous

On the Tuesday, July 21, episode of All Things Considered, NPR’s Robert Siegel interviewed James Rohack, president of the American Medical Association (AMA), about the AMA’s recently declared support for a health care reform bill, H.R. 3200, which is currently before Congress. Because the AMA has sabotaged health care reform in the past, its support is somewhat unexpected, and some have worried that the Obama administration has won the allegiance of the AMA and groups like it at too high a cost. Indeed, to judge by an FAQ on the association’s website, what the AMA most enthusiastically appreciates about H.R. 3200 is that it may remove a legal ceiling on the growth of Medicare reimbursements to doctors: H.R. 3200, the AMA writes, "represents medicine’s best hope for eliminating the current sustainable growth rate (SGR) formula for updating Medicare physician payments." The tone is pretty rich. "Medicine's best hope"—you'd think they were talking about a cure for cancer.

But what made me prick up my ears on Tuesday night was that NPR's Siegel challenged the AMA's Rohack to respond to an insight into the causes of runaway health care expenses that Atul Gawande described in "The Cost Conundrum," a June article for the New Yorker. As is becoming clear in the Congressional negotiations, health care reform will fail unless costs can be contained, and there aren't a lot of solid ideas (as opposed to wishful thinking) for how to do this without compromising standards of care. Gawande, however, has found a plausible and promising one.

In McAllen, Texas, more is spent on health care per person than almost anywhere else in the United States. Medicare spends $14,946 per enrollee there, "almost twice the national average," Gawande writes. Why? Gawande visited to find out. For comparison's sake, he also looked at nearby El Paso, Texas, where the population has the same ethnic makeup, the same socioeconomic profile, and similar health issues, but where Medicare pays only $7,504 per enrollee—roughly half as much. Empirically, and with mind-blowing lucidity, Gawande in the course of his article considers and rejects a number of possible explanations for the disparity, and concludes that McAllen is not getting better health care, just more of it, because its doctors are focusing not on their patients' health but on making money. You could call it an entrepreneurial culture, or you could cut to the chase and call it a corrupt one. Doctors in McAllen are paid according to how many treatments and consultations they order for their patients. Not surprisingly, they order more of them. Many have also invested in private diagnostic and treatment centers, where they make money twice over when they refer patients—first for having recommended the procedure, and then a second time in their capacity as owners of the facility that administers it. Even doctors without centers of their own can get in on the take; Gawande discovers that in McAllen the private centers are expected to pay kickbacks to doctors who refer patients to them.

In El Paso, by contrast, doctors for the most part make money only once—for the practice of medicine. Indeed, Gawande discovers, some of the nation's lowest health care costs—and best health care performance—are delivered by organizations like the Mayo Clinic, headquartered in Rochester, Minnesota, which pays its physicians a set salary, along with incentives correlated to measurements of patient health. Doctors are rewarded for long-living, robust patients, not for the number of interventions they make into their lives. In many cases, it turns out, doing no harm not only saves money but is also good medicine. Gawande's article is exhilarating to read, because it suggests that it may be possible to cut health care costs significantly—in a city like McAllen, by up to 50 percent—without any sacrifice to anyone's health. There are vested interests who don't want to hear this, of course, and in a follow-up blog post on the New Yorker website, dated June 23, Gawande entertains and refutes a number of attempts to spin or dismiss his conclusions.

If you search the AMA's website for the terms "Gawande" or "McAllen," you will find only a couple of hits, none of them regarding his article. But one of the lovely things about a live interview is that it can force someone powerful to address a question he would be able to slip away from in other circumstances. On Tuesday night, NPR's Siegel asked Rohack, the AMA's president, what he thought about the case of McAllen, where, Siegel explained, Gawande had found that health care costs were exorbitant "essentially because the doctors there are collecting as much money as they possibly can." Siegel continued: "Why hasn't the AMA stood up for best practices?"

Here's Rohack's response:

What McAllen, Texas, is, is not only a unique area but it's also one of the poorest counties in the United States, and so there's cost-shifting that's going on there, because of the uninsured burden. So we're committed as the AMA to try and create a solution so we can reduce unnecessary variation in care, but also have that liability protection so that if we don't order that extra test or do that extra procedure, we don't have to worry about being sued because we didn't do that test that wasn't necessary.

Note that Rohack doesn't pretend not to have read Gawande's article. He merely pretends to have found two explanations that, he implies, eluded Gawande: McAllen is poor, and malpractice lawsuits have raised costs there. It is true that McAllen is poor. Gawande says in his article's third sentence that it's located in the nation's poorest county. But poverty is not why McAllen's costs are higher, because El Paso, Gawande's point of comparison, is almost exactly as poor. In his blog follow-up, Gawande notes that McAllen's poverty rate is 27.4 percent, but El Paso's is 27.3 percent, and El Paso's median household income is actually $4,000 lower than McAllen's. Rohack is not quite lying: because McAllen is poor,  there no doubt is cost-shifting. But there must be cost-shifting in El Paso, too, and if he read Gawande's original article, he must know that this can't explain the cost discrepancy between the two places. Rohack's answer is not technically a lie but it is less than candid.

On the second claim—namely, that malpractice has raised costs in McAllen—NPR's interviewer catches Rohack out, by noting that malpractice liability is capped in Texas (Gawande notes in his blog post that premiums for malpractice insurance have actually dropped lately) and is irrelevant to any comparison of the two Texas towns. Siegel: "It's not malpractice, it's a commercial culture, and doctors trying to make as much as the system permits them."


The reality is that there is variation in care, and part of the reason is we don't have the science to help guide patients and physicians. Is a device or a drug better for that patient? The FDA approves new drugs, approves new devices, but there's no matching, and that's why we were very supportive of legislation to create comparative-effectiveness research, so we can have information to be able to provide the doctor and the patient at the time care is delivered, what's really best for them.

In other words, Rohack changes the subject. No one was talking about comparative-effectiveness research. It's sweet that the AMA supports it. At issue, however, was whether doctors should be paid per procedure or paid a salary, and Rohack's answer sounded to me like weaseling. It's possible that Rohack read Gawande's article inattentively, and failed to see his blog-post follow-up. But that's the most charitable interpretation I can make of his comments, and I'm inclined to believe that he read both very carefully, and is hoping that America will get confused and forget about the idea of reining in the profiteering of rogue doctors.

The Mayo Clinic—whose leaders come across as heroes in Gawande's article—has criticized the healthcare reform proposals pending in Washington, writing on July 16 that "the proposals under discussion are not patient focused or results oriented." Indeed, on July 21, David Leonhardt regretfully observed in the New York Times that no one very powerful in Washington is fighting for the ideas in Gawande's article: "So far, no one has grabbed the mantle as the defender of the typical household—the opponent of spending that creates profits for drug companies and hospitals at no benefit to people’s health and at significant cost to their finances." A pilot program to reform doctor pay is in the current bill, Leonhardt notes, but it's no more than that: a pilot program. Is an opportunity being squandered? In "Salaries for Doctors, Not Fees," published in the New York Times on July 25, Gardiner Harris recapitulates Gawande's thesis, writing:

Doctors in the United States are usually paid fees for each service they provide. The more procedures and tests they order, the more money they pocket. There is widespread agreement among health policy analysts that many of these procedures are unnecessary, raising costs in ways that often do nothing to improve patient health.

But, Harris writes, "almost nothing in proposed legislation that has so far emerged in Congress would encourage the creation of . . . hospitals" that pay doctors salaries instead of fees per treatment. He, too, takes note of the pilot program to reform pay, remarking glumly that "the history of Medicare is full of pilot programs" and observing that the AMA has long opposed such reforms.

3 thoughts on “The President of the American Medical Association Is Disingenuous”

  1. Correction: Mayo Clinic headquartered in Rochester, Minnesota, not New York. Rochester, Minnesota is also home to John Hardy's BBQ, one of the finer BBQ joints North of the Mason Dixon (run by an Alabama transplant). Minnesota – full of surprises!

  2. I am entirely in favor of healthcare reform. Had some great care years ago in Germany, under — egad! — socialized medicine.

    Coupla questions:

    How does paying doctors a salary square with the fact that insurance reimburses by procedure?

    Has anyone suggested that perhaps medical education could be subsidized? Part of the problem with the medical profession as a whole, is that those who are drawn to it because they want to heal people end up so deeply in debt that they have to have a considerable income when they enter the profession in order to pay back their student loans — which really can be the equivalent of two sizable mortgages.

    I think that switching to subsidized medical education and salaried physicians would be a dreadful shock to those currently in practice. But it would stop the hotdogs who just want to buy toys and get laid from applying to med school in the first place.

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