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July 08, 2013 9:43 AM Doctoring the System

By Ed Kilgore

When contemplating the anomalous fact that Americans as a whole pay far more for health care than anyone else on the planet, without securing better health outcomes (or even basic access to care for many millions), progressives tend to make private health insurers the villains, while conservatives usually blame trial lawyers (you know, for the cost of medical malpractice insurance and also for “defensive medicine” and its byproducts) and “irresponsible” health care consumers themselves.

Lord knows there’s plenty of blame to go around for our expensive and inadequate health care system. But the new July/August issue of the Washington Monthly focuses on a large part of the problem that often eludes debate: the government-enabled ability of health care providers, and particularly specialist physicians and their representatives, to promote their own interests at everyone else’s expense. In a sneak preview from this issue last month, Philip Longman exposed the role of teaching hospitals and other training facilities in over-producing specialists (and under-producing primary care physicians), in turn leading to excessive medical procedures and a general mismatch of supply and demand in health care. Today we are releasing an important article by Haley Sweetlands Edwards that draws attention to a less-well-known but even more outrageous phenomenon: a government-created but AMA-controlled entity called the Specialty Society Relative Value Scale Update Committee, or RUC for short, that effectively controls Medicare reimbursement rates for physicians, which in turn heavily influence private insurance rates and health care costs generally.

Originally conceived as a way to rein in individual providers charging Medicare outrageous rates (and in conjunction with a long-running effort to keep docs happy with the government’s role in health care), the RUC constituted a cure arguably worse than the illness: in effect a physicians’ cartel, run by the American Medicaid Association but dominated by medical speciality societies, that makes “recommendations” (by and large accepted) about prices for various procedures. Edwards plumbs the mysteries of RUC extensively, and concludes it not only unnecessarily boosts reimbursements for many specialties, but also undervalues primary care, contributing to the over-emphasis on speciality medicine that Longman talked about in his article. She also discusses various way to “fix” this system, ranging from a more balanced composition of RUC itself to a more general shift away from the kind of fee-for-service medicine that makes procedure price-fixing necessary in the first place.

There are few if any topics more important to the future of progressive politics and “good government” in American than getting a handle on health care costs and proving universal health coverage can work. Please check out the July/August issue of the Monthly, and the Longman/Edwards cover package we’ve called “Doctoring the System.” As Paul Glastris says in his Editor’s Note for the new issue: “Qhen it comes to health care, the fix is in. Reformers have all kinds of smart ideas for how to lower costs and improve quality in health care, but none of them will get very far until we take on the specialist doctor cartel.”

Ed Kilgore is a contributing writer to the Washington Monthly. He is managing editor for The Democratic Strategist and a senior fellow at the Progressive Policy Institute. Find him on Twitter: @ed_kilgore.

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