How Medicare Distorts Doctors’ Pay

Medical billing is a mystery to most of us. The Washington Post does a good job of pulling away a small part of the curtain. This story shows that a small group of doctors put together by the  American Medical Association essentially determine how much doctors will be paid for different procedures. And, according to The Post, the pay standards distort the pay very much in favor of the doctors and at the expense of taxpayers and those who pay insurance premiums. It’s a long, sad story, but you should know it.

To more broadly examine the validity of the AMA valuations, The Post conducted interviews, reviewed academic research and conducted two numerical analyses: one that tracked how the AMA valuations changed over 10 years and another that counted how many procedures physicians were conducting on a typical day.

It turns out that the nation’s system for estimating the value of a doctor’s services, a critical piece of U.S. health-care economics, is fraught with inaccuracies that appear to be inflating the value of many procedures.