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Our top story tonight.
Our user's guide to health care last week you remember that it uncovered the secret committee setting doctors' pay in America.
It's -- -- set up by the American Medical Association and hit -- signs thousands of special codes for every medical procedure imaginable.
You've seen these codes on your medical bill actually gone to the doctor the -- set the price viewing your insurance company or Medicare have to pay.
But unlike every other part of American life in the last several decades this pricing code.
Well it hasn't kept up with the times what that means is this pricing structure -- some doctors to bill for putting in a fifty hour today.
Fifty hours in one day stretches the imagination doesn't it.
And here's the best part.
The federal government help set the system up with us now.
Doctor Scott Gottlieb former policy advisor at the centers for Medicare and Medicaid services and -- think Roy senior fellow at the Manhattan institute -- I'll start with you.
You know I read that prices that the government pays for Medicare services are up 50%.
Over the last ten years.
You say this might be part of the reason is -- a racquet.
It's a total racket I mean it's the fox guarding the henhouse right the AMA is conducting these surveys with their own doctors.
And they always they never air on the side -- saying it's too little work they always emphasizing how this is so much work this procedure is so challenging we have to beat cannot reimburse a lot for -- Doctors got what we talked about this out last week and you said that.
How some of -- pricing gets set makes no sense at all give us an example.
But the -- he gets set based on an assumption about the quote intensity of the work required to do certain things and also the time it takes in some measure of the overhead costs.
So basically gives an incentive for higher reimbursement for procedures so you could you can do -- procedure like removing having grown toenail literally.
They get paid more than you would for spending a half an hour counseling a patient and so it consent advises doctors to try to do more procedures and try to chart.
So they can then code for more things.
You know I don't know any other part of the American system of bank where you -- it Palmolive when it's deciding how to.
-- tooth paste it doesn't say just put this bright side if they go out in the market place to see what the market place and there's that's how that works.
Why isn't medical pricing the same way.
Well this was all developed by Harvard economist and William -- in the eighties and it was actually enacted.
By the Reagan administration and the Bush Administration as a way of trying to bring Medicare costs down there were like Medicare costs about it we're all.
No -- it didn't work I mean it basically costs kept going because people gain the system and one good example -- how this distorts the way people treat.
Patience is take gastroenterology so people who treat GI issues.
The biggest one of the biggest public health problems in and -- GM -- GI specialty is hepatitis hepatitis C hepatitis -- things like that.
It's it doesn't.
Doctors don't get paid treating those patients what they do get paid doing -- colonoscopy is.
So all these -- docs are doing colonoscopy is all day because they get paid tons of money at Medicare -- believe aren't treating people with hepatitis which is a much bigger public health.
And they want to have a colonoscopy every twenty minutes -- as far as I can tell and and they can cost thousands of dollars it's unbelievable.
Doctors got TU I want you to respond to what AMA had to say about these cuts because we got a statement from them last week they say CDC that's because we're talking about is one of several sets of codes used within the health care system.
It was great to -- the common language that accurately consistently -- medical surgical and diagnostic service.
Services that is provided by physicians and other health professionals medical doctors and other qualified health professionals.
Right the CPT codes and hundreds of experts provide input.
Does that really explain what's going on here.
Well basically the federal government punted to the physician organization to the American Medical Association the job of coming up with how they're gonna pay for all of the discrete services -- deliver.
Any reason they did that is because they essentially they tried to cap what doctors were paid then it's okay here's a fixed pile of money you doctors fight over -- figure out how you gonna carving up.
Now they caps on what positions -- pay overall I'm a physician never would.
Never wore honored -- that what what doctors are paid overall that pot has continued to grow more than what they sell well and the crowd and -- -- Medicare.
And Medicare doesn't want to get involved in this they would rather have the doctors fight this out what happens as the specialists who do more procedures have more sway in this process so they end up over compensating procedures.
Well I don't let me just get out this this blew me away so it's not just -- the AMA ends up setting per you know prices basically by consulting with doctors.
They also make money off for this that makes 72 million which is far more than they get from their member -- Sydney two million dollars from this basically the federal government Uncle Sam -- that isn't monopoly.
You set these prices.
You make this money and there's a reason for that -- -- make that.
-- -- reason why this all happened is because the -- used to be the biggest bull work against socialized medicine and so when Lyndon Johnson was trying to get Medicare and Medicaid through congress.
He basically said we're gonna let the doctors charge whatever they want and that -- the and they -- -- -- Medicare.
And that's why Medicare cost so it's not a bribe to get to deal done so that's so basically that's what it what the -- may be in charge of it because they don't want the enemy to get mad.
Because of the game is OK with -- then the government out.
I have guy so it goes away getting Medicare and place.
Scott I need your reaction here I know you have serious questions about this what is the biggest problem with the system.
There is probably as it doesn't value physicians' services on the -- of outpatient would value aren't based in values and on the basis of our doc would value them.
And also incentivizes the wrong kind of behavior on the part of us physicians -- -- -- -- spending a lot of time with the chart trying to write long -- to justify the codes.
Because you know that's how you gonna be reimbursed -- -- gonna be lauded by Medicare.
But doesn't this also.
Doctors to increase prices -- at the end of the day this is just one big fat check.
To the medical establishment.
To increase prices every single year I mean if you're going to -- AMA and the -- and they in turn.
Is going to trade associations that represent various specialties -- Doesn't that guarantee escalating prices as far as the eye -- It does to a degree and that's why the the that the so called STR the -- the price control these things were.
-- -- in the first place -- It's like it's like you're out at a at a dinner with ten other people and at a restaurant everything you're gonna split the check evenly so every person at the restaurant has the incentive to order the most expensive thing on the menu because they're -- -- -- -- equally.
And that's how doctors are doctors have the incentive to bill bill bill because -- -- -- these price controls but the price controls don't affect them directly affect the overall system the global budgets.
Well I get -- mess I had visiting NASA yes doctor Scott got something you -- have been here quickly.
I was just gonna say is that as a physician you know what codes you can bill and you know which -- -- higher paid codes and doctors are very cognizant that some time and that that drives the wrong kind of behavior in terms of the disservice is he gonna perform on behalf of the patients well I think it's outrageous and I hope that our viewers will email us Gerri Willis dot com to get sent us a quick email get in touch with us let us know what you think.
I and it shocked that this is the way -- -- Country does business over the doctor -- thanks for coming on -- great job as always and --
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