AMA Endorsement of Senate Healthcare Reform Misguided

Statement by Joseph Reichman, MD, President of the Medical Society of New Jersey

The Medical Society of New Jersey is deeply troubled by the recent AMA approval of healthcare reform legislation emerging from the US Senate.  This legislation is significantly flawed and contains very few of the important reforms physicians consider critical to a meaningful overhaul of the US healthcare system.

The Senate measure provides no substantive payment reform.  The AMA and MSNJ have placed a high priority on permanently fixing the flawed Sustainable Growth Rate formula for Medicare payments to physicians.  It is shocking that a bill could gain AMA endorsement without such a fix.  America’s physicians deserve more than unsecured promises from Congress on something as vital as healthcare payment reform. 

Second, the Senate bill expands Medicaid to cover the uninsured. Unfortunately the New Jersey Medicaid Program pays so little for healthcare services that few physicians participate in the program.  Healthcare reform based on Medicaid expansion will leave thousands of New Jersey residents with health insurance that the majority of practicing physicians cannot accept.  It is no fix to roll the uninsured into a program where the cost to the physician to provide care exceeds the amount paid.

Finally, the Senate bill provides very little insurance reform.  New Jersey is dominated by a few large health insurance plans that dominate the market place.  These companies use their market power to increase premiums and force physicians and other healthcare providers to accept poor contract terms and lower payments.  The Senate bill does very little to restrain the monopolistic behavior of these insurance companies.

We have little confidence that the American Medical Association is representing the interests of the practicing physician in New Jersey.  The Medical Society of New Jersey will continue to advocate for meaningful reforms that help practicing physicians care for their patients.

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About MSNJ

Founded in 1766, the Medical Society of New Jersey is the oldest professional society in the United States. The organization and its dues-paying members are dedicated to a healthy New Jersey, working to ensure the sanctity of the physician–patient relationship. In representing all medical disciplines, MSNJ advocates for the rights of patients and physicians alike, for the delivery of the highest quality medical care. This allows response to the patients’ individual, varied needs, in an ethical and compassionate environment, in order to create a healthy Garden State and healthy citizens.

One response to “AMA Endorsement of Senate Healthcare Reform Misguided”

  1. michael S. Fleischer, MD oph says :

    Dr. Reichman, I read with interest your letter rejecting the senate health care bill. I share your sentiments, as well as your disdain for the way in which the AMA has conducted itself. I have never belonged to the AMA. I am an ophthalmologist in private practice in northern NJ now for 10 years.

    The points you outline in your letter detail issues in which the government is not treating physicians the way that YOU think the gov. should treat them. The assumption seems to be that if only the gov. would create the proper framework, laws, or regulations then the system would work properly.

    What I would suggest to you ( and you may already appreciate this) is that the very involvement of government in any aspect of healthcare is the PROBLEM. The MSNJ should not be trying to convince the gov to pass laws and regs favorable to doctors b/c we as drs think that this would be in the best interest of patients, NO! We should be trying to get government OUT of the business of healthcare completely.

    The sooner and quicker and more completely the government disengages from any and all control over healthcare the better off we all will be.

    As a physician and a businessman, I know that my services have value to others. I do not need or want special treatment or favors or subsidies from government. What I want is FREEDOM! LIberty! FREE markets! SO I can show people my dedication and ability not only as a practicioner as medicine but also as a cost conscious ethical businessman.

    The MSNJ should be trying to show the public as well as other doctors how gov involvement in healthcare has ruined the system for everyone. Orgininaly drs. were opposed to medicare then they accepted it and look where it has gotten us….we get paid by the gov and we are at their mercy!

    No the solution is to shrink gov involvement and get the gov OUT of the way. NOT to petition the gov for special treatment.

    The famous german free market philopher puts it best in his article:
    ________________________________________________________
    A Four-Step Healthcare Solution
    Mises Daily: Friday, August 14, 2009 by Hans-Hermann Hoppe

    It’s true that the US health-care system is a mess, but this demonstrates not market but government failure. To cure the problem requires not different or more government regulations and bureaucracies, as self-serving politicians want us to believe, but the elimination of all existing government controls.

    It’s time to get serious about health-care reform. Tax credits, vouchers, and privatization will go a long way toward decentralizing the system and removing unnecessary burdens from business. But four additional steps must also be taken:

    1.Eliminate all licensing requirements for medical schools, hospitals, pharmacies, and medical doctors and other health-care personnel. Their supply would almost instantly increase, prices would fall, and a greater variety of health-care services would appear on the market.

    Competing voluntary accreditation agencies would take the place of compulsory government licensing — if health-care providers believe that such accreditation would enhance their own reputation, and that their consumers care about reputation, and are willing to pay for it.

    Because consumers would no longer be duped into believing that there is such a thing as a “national standard” of health care, they would increase their search costs and make more discriminating health-care choices.

    2.Eliminate all government restrictions on the production and sale of pharmaceutical products and medical devices. This means no more Food and Drug Administration, which presently hinders innovation and increases costs.

    Costs and prices would fall, and a wider variety of better products would reach the market sooner. The market would force consumers to act in accordance with their own — rather than the government’s — risk assessment. And competing drug and device manufacturers and sellers, to safeguard against product liability suits as much as to attract customers, would provide increasingly better product descriptions and guarantees.

    3.Deregulate the health-insurance industry. Private enterprise can offer insurance against events over whose outcome the insured possesses no control. One cannot insure oneself against suicide or bankruptcy, for example, because it is in one’s own hands to bring these events about.

    Because a person’s health, or lack of it, lies increasingly within his own control, many, if not most health risks, are actually uninsurable. “Insurance” against risks whose likelihood an individual can systematically influence falls within that person’s own responsibility.

    All insurance, moreover, involves the pooling of individual risks. It implies that insurers pay more to some and less to others. But no one knows in advance, and with certainty, who the “winners” and “losers” will be. “Winners” and “losers” are distributed randomly, and the resulting income redistribution is unsystematic. If “winners” or “losers” could be systematically predicted, “losers” would not want to pool their risk with “winners,” but with other “losers,” because this would lower their insurance costs. I would not want to pool my personal accident risks with those of professional football players, for instance, but exclusively with those of people in circumstances similar to my own, at lower costs.

    Because of legal restrictions on the health insurers’ right of refusal — to exclude any individual risk as uninsurable — the present health-insurance system is only partly concerned with insurance. The industry cannot discriminate freely among different groups’ risks.

    As a result, health insurers cover a multitude of uninsurable risks, alongside, and pooled with, genuine insurance risks. They do not discriminate among various groups of people which pose significantly different insurance risks. The industry thus runs a system of income redistribution — benefiting irresponsible actors and high-risk groups at the expense of responsible individuals and low-risk groups. Accordingly, the industry’s prices are high and ballooning.

    To deregulate the industry means to restore it to unrestricted freedom of contract: to allow a health insurer to offer any contract whatsoever, to include or exclude any risk, and to discriminate among any groups of individuals. Uninsurable risks would lose coverage, the variety of insurance policies for the remaining coverage would increase, and price differentials would reflect genuine insurance risks. On average, prices would drastically fall. And the reform would restore individual responsibility in health care.

    $10 $7
    4.Eliminate all subsidies to the sick or unhealthy. Subsidies create more of whatever is being subsidized. Subsidies for the ill and diseased promote carelessness, indigence, and dependency. If we eliminate such subsidies, we would strengthen the will to live healthy lives and to work for a living. In the first instance, that means abolishing Medicare and Medicaid.

    Only these four steps, although drastic, will restore a fully free market in medical provision. Until they are adopted, the industry will have serious problems, and so will we, its consumers.

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