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Obamacare: How It Should Be Fixed

The only type of ACO that has been proven to satisfy patients and physicians is multispecialty group practice. According to the American Medical Group Association, there are now well over 430 such group practices and their number is increasing rapidly as more physicians seek group employment. Multispecialty groups now employ about 130,000 full-time-equivalent physicians (which I estimate to mean about 200,000 individuals) who provide the medical care for about one third of all patients. Since there are some 878,000 working doctors in the US, more than one out of every four or five doctors is practicing in such groups. Some 70 percent of medical groups of all types are owned by, or affiliated with, hospitals, and in almost all, medical staff are paid according to bills collected, often with a small added base salary.

Data from the Medical Group Management Association indicate that average staff earnings in groups are fully competitive with earnings in solo or small partnership practice, particularly if the generous fringe benefits that groups usually offer are also considered (for example, office expenses, malpractice insurance, paid vacation, pension plans). And judging from their low turnover rate, physicians who choose employment in successful, well-managed groups are usually satisfied with their job.

However, only a few medical groups currently avoid the inflationary incentives of fee-for-service by contracting with insurance plans that pay them on a per capita basis for comprehensive care of some or all of their patients; and even fewer pay their medical staff by salary. Kaiser Permanente is an example of both. But as pressures increase to contain costs by avoiding fee-for-service, this kind of group practice will probably become much more common.

In my book A Second Opinion, I have described in detail how a single-payer system sponsored by the federal government would function when coupled with a reorganized medical care system based on independent multispecialty group practices with salaried physicians. Replacement of all public and private insurance and elimination of itemized bills with a public tax-funded system that simply paid medical groups per capita for comprehensive care would avoid much of the expense and many of the other problems with the current system. The enormous savings could ensure adequate compensation for all the facilities and physicians needed for universal care.

The loss of jobs in the eliminated private insurance industry would probably be more than compensated by increased employment in a greatly expanded public-payer system, and by the new jobs created by the emerging business opportunities created when employers no longer need to pay the health costs of their employees. Government would be able to contain the rise in total health expenditures by its power to set prices and determine the level of taxation required to fund the system, but it need not micromanage medical care. Medical decisions should remain in the hands of physicians and their patients, where they belong.

Most important, this revolution in our health care system would make universal access to good care affordable. It is a revolution that seems inevitable, even though it is not yet on the political horizon.

Letters

Catastrophic Care’: An Exchange October 24, 2013

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