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Is the AMA the Worst Trade Association Ever?
By Scott Becker, JD, CPA | April 07, 2010
The American Medical Association has been in existence for 162 years now, making it the oldest trade association in the nation, but this organization doesn't have a clue anymore as to what a trade association is about.
A trade association promotes its members' best interests. From time to time, it can embrace higher causes, even a cause such as health reform. But if it strays too far from its core mission of delivering benefits for members, it ceases to be a trade association and becomes something else — maybe an officious advisory group, as when the AMA declared in 2008 climate change was real.
Last year, the AMA gave its support to a fledgling health reform process whose ultimate success was very much in doubt at the time. In return for that support, the AMA wanted at minimum two basic things: federal tort reform and a permanent fix of Congress' noxious sustainable growth rate. The SGR, promulgated in 1997, has been producing ever-higher proposed cuts in Medicare physician reimbursement, which constantly have to be patched but are never removed.
Now health reform has become law, and what does the AMA have to show for its early support? No SGR-fix, no tort reform and a number of new payment problems created by the new law. Here are just four examples.
- a powerful new advisory board that can lower physician fees with little Congressional oversight.
- an estimated 15 million previously uninsured people who will be covered at very low-paying Medicaid rates.
- the prospect of intra-professional conflict as Medicare reimbursements for some areas may be raised and, under the zero-sum game of Medicare spending, physician reimbursements will probably fall.
- the demise of physician-owned hospitals. No new facilities can be built after this year and existing facilities cannot expand upon the date of enactment.
That adds up to no wins and several losses for physicians, leaving Paul DeHaan, MD, an orthopedic surgeon and AMA member in McHenry, Ill., feeling frustrated. In the health reform process, "there are huge concerns that many critical items we've been asking for were ignored," Dr. DeHaan told the Chicago Tribune. "I believe they [the AMA] lost much support and confidence from a large faction of members, and that will hurt them in recruitment and retention."
Who got the better of whom?
AMA President J. James Rohack, MD, has repeatedly said the AMA's early support of the health reform bills gave it a front-row seat at the bargaining table, where it would be able to finesse more physician-friendly provisions into the final law. Last August he characterized an early version of the House health reform bill as "a starting point for the health reform debate, and the AMA is committed to staying engaged to improve the final legislation."
But as it turned out, the chief benefit of AMA involvement in the process was to make it easier for President Obama to sell the bill to Congress and the nation. Urging the House to pass the reform bill in November, Mr. Obama noted that the doctors of the AMA were behind it, and "they would not be supporting it if they really believed it would lead to government bureaucrats making decisions that are best left to doctors."
Actually, the President needed the AMA more than the AMA needed him, according to Howard Smith, MD, a Washington, D.C., obstetrician-gynecologist. "Obama needed to get all the major actors on board to have any hope for it to pass," Dr. Smith wrote last year in the blog, DC Examiner. "Knowing this, it stood to reason that it would be more to the advantage of the AMA to hold its support off until it could get the best deal possible."
As the AMA became more expendable in moving the bill forward, its influence over the process waned. The fate of the SGR-fix is a good example. "The flawed Medicare payment formula must be fixed," Dr. Rohack told MedPage Today in the summer, when things still looked pretty promising for this issue. The House passed an SGR-fix in its first version of health reform, but then things went downhill. The SGR-fix has a huge price tag — $210 billion to $230 billion over 10 years. That's the amount on paper, at least. In reality, Congress has always in the past staved off the cuts and the money is never realized. In the strange world of Capitol Hill, though, this fictional amount is real money — so real that it threatened to squeeze out the money Congress wanted to spend on expanding coverage to millions of uninsured people, while delivering net savings over 10 years. After the short-lived victory in the House, the Senate threw the SGR-fix out of its reform bill, introduced it as a separate measure and voted it down.
That was the end of the fee fix as part of health reform, but Congress was still assuring the AMA until the end that the SGR-fix had a chance, and the AMA believed them. As recently as last month, just before the final health reform vote, Dr. Rohack was still promising in a conference call to reporters he'd hold Congress' "feet to the fire" and make it pass a permanent fee-fix. But it was too late. "It becomes extremely difficult to do a fix now that health reform has passed with such a big price tag," Julius Hobson, the AMA's former chief lobbyist, told Chicago Business a few days after the final vote.
Why the AMA failed to have influence on health reform
Why, after being so tough on President Clinton's health reform proposal in the early 1990s, did the AMA roll over so easily for President Obama and the Congressional Democrats? Many personally blame Dr. Rohack. This cowboy-booted cardiologist from Texas entered the AMA's one-year presidency just when health reform negotiations heated up and he's pretty much been front-and-center ever since. But even if Dr. Rohack shares some of the blame, the AMA's mistakes run deeper than one man who took office last June and will be gone from it this coming June.
One mistake was the organization's highly nuanced position on health reform, which nobody but the AMA got. The organization frequently said while it supported the proposed health reforms, it did not endorse them. What? "'Endorse' means you think it's perfect and love it the way it is; 'support' means there is enough there to keep it moving while realizing there are things that need to be changed," an AMA delegate explained to Psychiatric News. A good explanation, perhaps, but the headline always was the AMA supports health reform. In a December letter on the Senate's reform bill to Senate Majority Leader Harry Reid (D-Nev.), the AMA said it "firmly supports critical aspects of the bill" but "there is still work to be done." What kind of negotiation tactic "firmly" supports a plan — even parts of a plan — and still demands changes? Do you even listen to the demands of a negotiating partner who has already agreed to the contract?
The AMA's biggest mistake, however, was getting so smitten with the prospect of health reform that pocketbook interests for members were put in the trunk. Even before the reform debate, "the AMA was traditionally cautious about advocating the interests of doctors because it feared that advocacy could be misperceived by the public as partisanship," Dr. Smith explained in his blog. This time around, AMA officials also appeared to have no appetite any more for always having to nix ambitious, well-meaning social programs in favor of pocketbook issues. Some delegates at the AMA's December meeting praised the organization's affirmative stance on health reform and criticized "the AMA's reputation over the years as a nay-sayer — voting against Medicare in 1965 and the Clinton health care reform proposal in the 1990s," the Psychiatric News reported.
Though Dr. Rohack and the rest of the AMA board set AMA policy through most of the health reform debate, the House of Delegates, the ultimate authority in the AMA, had a chance to redirect it at an interim meeting in Houston last December. Three former AMA presidents and 10 state and specialty societies came in open revolt against the board's stance, but delegates firmly rejected a motion to rescind AMA support of health reform by a vote of 315-199. (However, they did pass several resolutions condemning parts of the bill, such as the advisory board.)
The Houston vote was a validation for Dr. Rohack, giving the beleaguered board an endorsement from the entire "House of Medicine." "Our policy is created through our House of Delegates," he told Analyst Wire afterwards. "Our House of Delegates represents every state medical association, over 170 specialty societies, medical students, residents, faculty of medical students, faculty of medical schools. So our policy is created by the profession."
AMA policy was endorsed by the profession. The delegates might have made the endorsement, however, because they were handed a fait accompli with little choice but to accept it. Sure, they could have yanked the AMA board from its chosen path, but health reform already seemed to be well into its last lap (that is, until Scott Brown (R-Mass.) won the U.S. Senate race in Massachusetts and put off final passage for a couple of months).
While the House of Delegates true stance on health reforms seems a little unclear, polls of physicians are even hazier. A National Public Radio poll in September found that nearly three-quarters of physicians favored a public option for health insurance, but another poll the same month by Investors Business Daily found 65 percent of doctors opposed government expansion of healthcare.
No longer a membership-driven organization
The House of Delegates may still represent physicians to some degree, but the AMA definitely does not. AMA membership reportedly reached a peak of 70 percent of physicians in 1962 and now is generally pegged at about 17-20 percent of all doctors. (The number is fuzzy because members include medical students and retired physicians, who have relatively high membership rates because they pay discounted dues.)
While plummeting membership would cripple most organizations, the AMA makes up for lost dues income by relying increasingly on other income. Product endorsements have been out ever since the 1997 Sunbeam scandal, but publications like CPT coding manuals have filled in the gap. In 2008, dues made up only 16 percent of AMA revenues, or $43.9 million, while books & products made up $69.9 million in revenues, database products made up $47.6 million and publications, $64.6 million, according to the most recent statistics in the AMA's 2008 annual report.
Other trade organizations have to meet the needs of dues-paying members, but the AMA is in its own, strange orbit. While it is still regarded, for now, as a major force in national policymaking, whether it can remain so is an open question. It is no longer the tough-minded trade group that frequently went to the mat on payment issues with federal policymakers. Its membership is broad and too ill-defined to direct policy. And, in the health reform debate, at least, its leadership seems to lack the most basic negotiating skills.
"The AMA, when first established, represented the views of the doctors in the 'trenches,' but now they have capitulated to our government and are not interested in the needs of practicing physicians," wrote Harold Fields, MD, in a comment on the HCP Live Network last July. "The AMA is only interested in self-advancement and maintaining its position."
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