Thursday, November 29, 2012

Fwd: qotd: AMA pushing for defined contribution for Medicare

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Subject: qotd: AMA pushing for defined contribution for Medicare
Date: Thu, 29 Nov 2012 12:43:50 -0800
From: Don McCanne <>
To: Quote-of-the-Day <>

November 2012
Interim Meeting of the AMA House of Delegates
Report 5 of the Council on Medical Service
Strengthening Medicare for Current and Future Generations
(Reference Committee J)

The Council recommends that the AMA support transitioning Medicare to a
defined contribution program that would enable beneficiaries to purchase
coverage of their choice through a Medicare exchange of competing health
insurance plans. Traditional Medicare would be an option in the Medicare

In addition to supporting transitioning Medicare to a defined
contribution program, the AMA should continue to strongly advocate for
related Medicare reforms. Policies related to balance billing, private
contracting, and the repeal of the Medicare Independent Payment Advisory
Board remain particularly relevant and should be reaffirmed. Similarly,
the AMA should continue to support incentives to encourage people to
contribute to health savings accounts, and to promote their use as a
means to ensure access to high quality medical care. It is also critical
that the AMA continue to advocate for the other Medicare reforms
articulated in Policy H-330.896, particularly restructuring beneficiary
cost-sharing in order to provide incentives for appropriate utilization
while discouraging unnecessary or inappropriate care, and increasing the
Medicare eligibility age to reflect increases in the average life
expectancy in the United States.


The Medicare NewsGroup
November 27, 2012
Ardis Hoven, President-Elect, American Medical Association

For Dr. Ardis Hoven and other veteran policymakers within the American
Medical Association (AMA), the nation's largest medical organization's
move to support transitioning Medicare away from a defined-benefit to a
defined-contribution system has been a long time coming.

"(The) AMA has been working on Medicare policy to improve the program
about 25 years, on an off," said Hoven, who was first elected to the AMA
board of trustees in 2005, following many years as a member and chair of
the AMA Council on Medical Service. That council was where AMA's policy
to move to a defined contribution began.

As Congress and the White House look in the coming weeks for new ideas
to reduce the deficit and avoid the so-called fiscal cliff, Hoven sees
promise. She believes the AMA's newly approved set of policy principles
for a Medicare defined contribution will receive serious consideration
in Washington.

Comment: In recent years it appeared that the AMA had an epiphany and
began to transition from an organization that defended the interests of
physicians to an organization advocating for the interests of patients.
They supported the Affordable Care Act as an improvement over the status
quo, and they even elected as their president, Jeremy Lazarus, a very
fine gentleman noted for patient advocacy, especially as a spokesman on
behalf of the uninsured.

Judging from the interim meeting this month of the AMA House of
Delegates, the epiphany fizzled. Ardis Hoven, the AMA President-elect,
and her co-conspirators from the Council of Medical Services succeeded
in advancing AMA's official support of the conversion of Medicare from a
defined benefit to a defined contribution. This gradually transfers risk
from the taxpayers who fund Medicare to the pockets Medicare
beneficiaries themselves. Many Medicare patients already face financial
hardship, and this will only make their problems worse.

Why would the AMA do this? As a Life Member of AMA, I can present my own
subjective observations. During my medical career, membership in the AMA
dramatically declined. Those leaving did not find the AMA to be
particularly relevant, whereas those remaining tended to be politically
conservative, wishing to advance policies that would conform with their
conservative ideology. But it wasn't just political ideology that drove
the AMA. Some physicians with more progressive views also remained,
hoping to improve AMA policies from within, but they remained in the

I hate to say it, but there does seem to be a more nefarious agenda than
that dictated by their political ideology. This may sound like an
oversimplification, but I don't think it is: they want patients to pay
their full fees in cash. They do not want an intermediary to control
fees or to establish any other rules on how their services are to be

Just look at the report they approved this month (excerpt above).
Defined contribution shifts more of the responsibility for health care
spending to the patients' pockets. Balance billing allows physicians to
collect directly from the patient the balance of their full fees
regardless of what any intermediary authorizes. Private contracting
allows the physician to contract directly with the patient for full
fees, again with no third party intervention. Health savings accounts
are cash accounts which the physicians can tap directly. "Restructuring
beneficiary cost-sharing in order to provide incentives for appropriate
utilization" is code language for requiring patients to pay more in cash
for any care they receive. Increasing Medicare eligibility age is a
scheme to postpone the day that their patients become eligible for a
public program that limits cash payments from patients. And there is
much to be said about the Medicare Independent Payment Advisory Board
(IPAB), good and bad, but the AMA fears this most of all since it would
place control of their fees in the hands of an independent government
board. (Much more needs to be said about IPAB, but not here.)

We saw what happened at the start of the Medicare program. Physicians
were able to set their own fees, and fees skyrocketed. As much as the
AMA House of Delegates wants physicians to have full control of fees, we
can't allow it. We also don't want to leave that control in the hands of
private insurers that have pressing interests which have priority over
patients. No, we need to place control in the hands of our own public
administrators who will always place patients first, understanding that
a quality health care system also requires adequate funding.

Ardis Hoven says that she believes "the AMA's newly approved set of
policy principles for a Medicare defined contribution will receive
serious consideration in Washington." Do PNHP members have something to
say about this? It's time for op-eds, letters to the editor, community
forums, and direct communication with your elected representatives. The
topic is hot in D.C. Do it now.

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