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AMA Debates ban on Corporate Medicine
EP #71 FLATLINING Podcast Recap
In this episode Matthew and Ron talk about the American Medical Association’s (AMA) possible lobby effort to ban corporate medicine and what is the latest from the Centers for Medicare & Medicaid Services (CMS) and the U.S. Congress on the 2024 Medicare fee schedule.
This Medicare reimbursement rate is important because many provider contracts with health insurance companies are based on this reimbursement rate. So, when Congress decides to cut this rate as a budgetary exercise, provider revenues go down with it. Ron breaks down if the proposed 3.4% cut will stand or if it will end up more in the 1.5% range. He explained that what usually happens as the budget discussions continue, the rate generally gets reduced. At the time of the recording, there was a looming government shutdown and Ron was concerned that the Medicare rate might get overlooked and the 3.4% would stand. However, congress passed a two-step Continuing Resolution (CR) last Thursday. That was a “clean” bill and had no spending cuts or contentious policy provisions.
Ron has posted more analysis on this topic on Linked In if you want to read more of his thoughts on how Medicare rates affect provider revenue. Keep tuned to FLATLINING.net to hear the latest.
Matthew dives into the description of what “Corporate Medicine” is and how it is a topic that is trending in the medical business world and became a hot topic at the AMA interim House of Delegates meeting last week. The publication, The American Prospect, ran a story on the meeting. At the AMA meeting, it was proposed that they lobby the U.S. Congress to ban corporate medicine.
Ron pointed out that his feelings on this were really two-fold, the first was his thoughts on the tremendous value the U.S. Healthcare system has in the pure nature of the patient-physician relationship. That relationship builds trust for patients knowing that their doctor is working completely for them. Ron explained that the other side to this is when a doctor is employed by some corporate entity and may be pressured to focus on the bottom line, which may call into question whether they are doing what is in the best interest of the patient or the corporate entity.
The interesting way this issue came up at the AMA meeting, was something Ron liked. He liked the fact that it was raised by physicians and not policy wonks with an agenda. These are doctors concerned about what happens when more physician practices are being bought up by Wall Street. It’s a discussion that needs to happen he said.
Matthew asked Ron about the different types of corporate ownership of medical practices and if one type is better than another. Ron described the situation as more of a grayscale, where the impact of one type of ownership is different than another. He said it comes down to the severity of the conflict between what the doctor wants to do and how much pressure he is under to act in accordance with what is best for the bottom line of his employer. Ron said at the worst end of the spectrum are the health insurance companies since they make money when they don’t deliver care. So they have the motivation to keep expenditures low. At the other end might be a non-profit hospital, with the rest falling somewhere in between.
Ron described physician’s attitudes toward these corporate arrangements and said that in his experience most of the physicians he interacts with would like to be independent and have the ability to do what is right for their patients. Ron said the physicians or the practices that get purchased by a corporate entity come to this decision usually for one or two reasons. The first is a monetary decision when the practice can’t seem to make it financially, the other is when the physicians are burnt out on the non-clinical aspects of running and managing a practice. He said doctors often conclude that “it’s something I have to do, not what I want to do.”
Matthew asked if large physician-run operations are corporate medicine as well, and Ron explained that just because a provider company is owned by physicians doesn’t get them off the hook. He said the test, in his opinion, is, “Can that physician practice truly independently, with what is best for that patient, or is there outside influence that pushes them into something else.” He described some of those influences as the threat of termination of employment and being directed to act or provide care in a certain way that could have an impact on your pay either positively or negatively. Ron said it really comes down to how independent the physician can practice medicine.
The discussion shifted to the AMA and Matthew asked if the AMA could get this proposal out and if so, can they get something done about it? He pointed out that only 11% of physicians are members of the AMA. Ron acknowledged that this fact is a problem for them. He did point out though that in the general population, people tend to think of the AMA as representing physicians. He pointed out that this issue could be a rallying cry for the AMA and demonstrate that they are listening to their members, which could increase membership and demonstrate they are in fact the voice of physicians. All this would be good for the AMA, he said, but it will take some work.
Matthew referenced the The American Prospect article and said that Medicare reimbursement had dropped by 21% over the last ten years which demonstrated that the AMA may not be very capable of lobbying on behalf of their members. Ron said that this fact is central to the reason the AMA membership is only 11%. He said physicians he talks to point out that doctors often ask, “What have you done for me?” Ron did point out, in the AMA’s defense, that the AMA is often going up against big opponents like the health insurance industry and big pharma, but at the end of the day, he said the AMA needs a win. The advantage of the AMA, he said, was that people respect doctors.
The discussion wrapped up with what is central to healthcare, the patient. Matthew asked what effect a ban on corporate medicine would have on patients. Ron pointed out that he has never seen any statistic that demonstrated that an increase in the corporate management of medicine has benefited patients. He went on to explain that the ways corporate ownership has hurt patients are often difficult to see. For example, maybe you went to an imaging center that is not as good as another in your market because of some arrangement in the referral process, or certain drugs or treatment regimens are mandated due to costs.
Ron closed by telling us that we need to make sure patients understand the effects of corporate medicine and that your doctor may be doing things because of someone behind the scenes who is controlling their livelihood. He said it’s almost a campaign of “Don’t you want your doctor working for you.” That could be the winning strategy on this issue, he said.
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