Matthew Holt bashes the AMA. Again.

It’s starting to get old. But he makes one valid point – reducing physician reimbursement does not necessarily reduce health care costs:

And after about 20 years of seeing the rate of health care costs increase dramatically the government and private payers have looked for ways to slow their health care costs. The government tends to lead the charge on this because the government pays for Medicare which is by far the biggest and most important health care program in the U.S. Inevitably reducing physician fees is a prime candidate. Reducing the fees is only half the equation, however. Physicians also tend to get paid for each service they deliver. So typically any attempt to reduce fees results in physicians increasing services – not only those they provide themselves but also the attendant tests, hospital admissions and other things that go along with that. So a cut in fees doesn’t convert to a straight cut in income, or a reduction in health care costs overall.


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