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How a Secretive Panel of Doctors Helps Set Health Care Costs

A Washington Post story by investigative reporters Peter Whoriskey and Dan Keating has drawn plenty of attention to a little-known committee of doctors that establishes values for each medical procedure, which in turn affects how much Medicare and private insurers pay for them.

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The American Medical Association committee meets once a year behind closed doors to determine the time and intensity of most of the procedures and services a doctor performs - like colonoscopies (75 minutes of a doctor's time, the committee says). But in fact, Whoriskey and Keating write, "the AMA's estimates of the time involved in many procedures are exaggerated, sometimes by as much as 100 percent, according to an analysis of doctors' time, as well as interviews and reviews of medical journals."

Looking at the time that the panel said was needed for each procedure and the number of procedures performed by each doctor, the Post found some doctors would be working more than 24 hours a day.

Here's what people are saying about the system:

  • Dr. Ardis Dee Hoven, the president of the AMA, says that the committee's recommendations are just that - recommendations. "There is simply no substitute for physicians' clinical expertise when gauging how much work and resources go into one medical service compared with another," Hoven writes in a commentary for USA Today. "No one knows more about what is involved in providing services to Medicare patients than the physicians who care for them."
  • In an editorial, USA Today calls the system flawed and too secret: "The time has come to either supervise the AMA committee's work more aggressively or have Medicare do the work itself. Even if the committee members all behave with the utmost professionalism, the potential conflict of interest throws a shadow over their work, and the moral hazard is simply too great."
  • Bloomberg's Megan McArdle, who writes about business and economics, points out that the work of primary care physicians and gerontologists gets short shrift from the AMA panel, which is dominated by specialists. "Because of the way Medicare payments are skewed, gerontologists (who definitionally must survive almost entirely on Medicare) have a tough time making a living," she writes. "If you have a national health-care system specially for seniors, and this results in a shortage of gerontologists, then by definition, you're doing it wrong."


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