Putting the pieces together

August 2017 - Vol. 36, No. 7

James C. Denneny III, MD
AAO-HNS/F EVP/CEO

The seemingly ever-expanding cost of the American healthcare system, predicted to surpass 20 percent of the GDP by 2025, has caused increased scrutiny of many well-established institutions related to the medical profession and the healthcare industry in general. On the surface, the “North Carolina State Board of Dental Examiners (NCSBDE) v. FTC” decision by the U.S. Supreme Court, recent legislation in 17 states relating to Maintenance of Certification (MOC) along with follow-up discussion and House of Delegates activity at the AMA Annual Meeting in June, a recent op-ed in The New York Times, and an article on Forbes.com don’t seem interrelated. However, each of these address various aspects of physician involvement in determining the practice of medicine both currently and going forward.

The public has traditionally relied on physicians to determine, disseminate, and police standards of best patient care through certifying professional boards, state licensure boards, and medical associations. The medical profession has taken this responsibility quite seriously for generations. Although specific missions may vary among the aforementioned groups, all have the common goal of delivering the best possible care to the patient population and protecting them from harmful deviation from accepted standards.

The Supreme Court decision of 2016 (NCSBDE v. FTC) in which the majority held, “If a controlling number of an agency’s decision-makers are active market participants in the occupation the agency regulates, the agency can invoke state-action antitrust immunity only if it was subject to active supervision by the State.” This ruling certainly has the potential to markedly alter the compositions of state licensing boards nationwide in a heterogeneous fashion. One can just imagine the concerns created by a state medical board dominated by representatives of the hospital associations, insurers, and allied health providers. Physician self-regulation could quickly become a historical curiosity.

During roughly the same time period, legislation has been introduced in 17 states to limit the use of MOC in hospital privileging, physician licensure, insurance credentialing, and network participation. However, in some of the states, determination of qualified certifying bodies and Continuing Medical Education (CME) has been ceded to the state medical boards. Given the uncertain future of the makeup of these boards, this strategy has significant risk that physician regulation may be controlled by those lacking understanding of the profession and driven by interests contrary to best patient care.

The Sherman Antitrust Act of 1890 has been a source of great frustration to many physicians who are subject to tightly restricted discussions concerning anything related to practice-based economics, while hospitals and insurers can plan and negotiate within their own groups with impudence and no consequences. To potentially have the ability to regulate our own profession snuffed out by the same act is a bitter pill to swallow.

Ironically, at a time when physician influence seems to be on the historically low side related to federal legislation, workplace requirements, payer relations, administrative burden, and recent pieces in prominent publications have espoused quite the opposite viewpoint.

An op-ed column in The New York Times written by a physician contains several interesting statements of questionable accuracy that do not correlate with my experience. Comments such as,  “Instead, it [the healthcare market] is a colossal network of unaccountable profit centers, the pricing of which has been controlled by medical specialists since the mid-20th century.”; “What people don’t know is that specialists essentially determine the services that are covered by insurance, and the prices that may be charged for them.”; and “Instead of letting specialists’ lobbyists set costs, payment algorithms should be determined by doctors with no financial stake in the field, or even by non-physicians like economists.”; totally disregard the “Relative Value System (RVS).”

The RVS was set up in the late 1980s and constantly undergoes revision designed to accurately measure time and resources involved with providing respective services.  The majority of the individuals making these determinations have no direct involvement with the individual procedures being assessed. Ultimately, CMS thoroughly reviews each recommendation and has the final authority and responsibility to adjust values that it considers inappropriate. The author may be interested to know that physician payment accounts for only 12 percent of the Medicare budget. Most specialists and specialty organizations would be “surprised” to learn that they can dictate coverage decisions and pricing to CMS and the private health insurance providers. Most communications from our members are concerned with quite the opposite scenario.

A recent article on Forbes.com by Tim Worstall, references The New York Times article and additionally paraphrases Milton Friedman’s comments from decades ago when he says: “The AMA, and in this current analysis all of the smaller and more local specialty groupings, make healthcare more expensive in their exercise of their monopoly power.” Shikha Dalmia states, “but the entities that will be most injurious to the nation’s health are not so much in the evil-mongers’ group, but the first group, including the American Medical Association—a doctors’ cartel that has control of the medical labor market in the U.S. like its personal fiefdom for a century.” Finally, economist Milton Friedman argued for “no licensure of physicians, because that would help to reduce and eliminate the monopoly power of the American Medical Association … And the control over that licensure procedure is what has enabled the AMA to exercise its monopoly power for these many decades.”

While opening the practice of medicine to anyone who wanted to try their hand, do you think Friedman would have been comfortable looking up at an economist colleague poised to perform open heart surgery on him? Using a similar logic, pharmaceutical costs could be dramatically reduced if they did not have to show efficacy and safety as required by the FDA for approval. Examples of the danger of this strategy can be seen in the news on a regular basis, particularly related to production and consumption of illegal narcotic products and the thousands of deaths related to such each year.

When one starts to carefully look at these examples that seem to favor decreased involvement of the physician community in setting standards of care and the practice of medicine, one must wonder if that would truly be in the best interest of the many patients treated in the United States every year. At a time when there is consensus agreement that the public deserves high quality care and value, it would seem intuitive that defining and improving quality medical care, including reducing the well-documented excessive medical errors and enforcing the appropriate use of resources, requires some degree of professional self-regulation.

The challenge for organized medicine is to accomplish this in a fair, data-driven way that allows provision of appropriate, safe, quality care within an efficient, cost-effective paradigm. We oppose the outsourcing of physicians’ autonomy to unpredictable state legislatures and medical boards. This would not serve the public well and additionally will only confuse the majority of patients. Physicians and other participants in the healthcare system in society are all telling us we need to do a better job, and do it soon.