Undisclosed Committee behind Our Soaring Health Care Costs

National health care spending in the US has reached $2.8 trillion in 2012 - more than 17 % of the country’s gross domestic product — more than any other industrialized country. Still our citizens are not healthier than those in other industrialized countries.

As it appears prices in the United States are higher than those in other countries. Also, the payment system is fragmented and includes a mix of government funding and private third-party payers - this leads to huge variation in cost for the same medical procedures.

There are some economists who also point to the high administrative costs we have as well as the fact that pharmaceutical companies and medical device manufacturers set their own prices, though in many other countries, these prices are negotiated by the government.

There’s also another explanation, debated by experts in health policy circles, however less known to the public - a secretive committee run by the American Medical Association (AMA) which, with the assent of the government, has a huge power to decide Medicare prices by assessing the relative value of the services that physicians perform. For decades the committee has operated so in a way that has skewed Medicare fees in favor of expensive specialists over ordinary general practitioners. As Medicare fees are the guideline for the rest of the pricing in the health care system, this has had a broad effect, contributing to a situation where primary care doctors are usually underpaid, underappreciated — and in seriously short supply because medical students leave to where the money and opportunity are.

It seems just 30 % of practicing physicians in the United States today are primary care doctors, while in most other industrialized nations, 50 - 70 % of doctors practice primary care. This may explains a good part of what’s costing Americans so much for their health care. Primary care doctors frequently treat patients before their conditions get so complicated that they need to seek specialty care, which of course drives up health costs exceedingly.

As it appears though many doctors are still not aware of the hidden hand of the AMA-run committee in perpetuating this costly crisis. The panel, with almost no transparency or public discussion, carries on giving recommendations to the government on how much Medicare should charge for physician services and procedures. What you may also not know is that the AMA even owns the copyright to the elaborate coding system by which those prices are set, earning huge licensing profits from it, even though the organization has dramatically declined in membership and has largely lost its stature as the primary mouthpiece of the medical profession.

Called “Current Procedural Terminology,” the coding system has numbers to delineate everything from a standard office visit to a complex triple bypass surgery. However it does not include codes for much of the ongoing work that primary care doctors perform outside of scheduled office visits.

According to studies, primary care physician shortage in the US is currently estimated at 16,000 doctors and expected to rise to more than 50,000 by 2025.