The Blind Spot in Medicare for All

The Blind Spot in Medicare for All

If we adopt a single-payer structure without remaking the bureaucracy, we will perpetuate the perversity at the core of our medical system.


The United States is the only high-income nation to insist that health should be determined by markets and profits rather than rights and dignity. The result is that the prohibitively high cost of American health care causes tens of thousands of preventable deaths every year.

For the first time since the Covid-19 pandemic compounded this long-standing national disaster, Congress is considering the state of America’s health care system. The House recently held hearings on Medicare for All, and the Senate Committee on the Budget is convening parallel proceedings today. In this context, many members of Congress who benefit from the status quo are rehashing their opposition to Medicare for All, citing the importance of defending of “freedom” and “choice.” With thousands of people dying each week precisely because they have no choices in our current health care system, this rhetorical game should fool no one.

Although universal health care appears unlikely to be enacted by this Congress and has never even appeared on President Biden’s agenda, the current hearings serve an important purpose. They remind the US public that our existing system of for-profit health care exclusion is a deliberate policy choice, not an inevitability.

While Medicare for All would be an enormous step forward for the health of Americans and the health of US democracy, it’s essential to recognize that what determines our health care system is not simply who pays but also for what we pay. If we adopt a single-payer structure without remaking the bureaucracy by which the value of care is determined, we will perpetuate the perversity at the core of our system and its world-leading inefficiency.

Despite efforts to implement alternative models over the last two decades, a fee-for-service framework remains embedded in American health care and endures as its dominant underlying driver. Fee for service compensates doctors, clinics, and hospitals based upon number and type of visits involved in a patient’s care, creating incentives for unnecessary procedures, excessive clinic appointments, and the mountains of paperwork that have become the bane of American doctors’ daily lives. This system, which places value on specialized services rather than on primary care, is also a crucial factor behind the worsening shortage of primary-care doctors.

The persistence of fee for service is no accident. It’s the consequence of a long political campaign initiated by doctors that has since been taken over by industry executives and their lobbyists.

Fee for service solidified its central role in American health care in 1965 when Congress passed legislation to create Medicare and Medicaid. For years, the American Medical Association (AMA), a physicians’ lobbying group organized to protect doctors’ economic interests, had been doing all it could to oppose public health-insurance programs like Medicare and Medicaid. They feared that government involvement in health care would lead to a decline in doctors’ earnings and professional status. The AMA campaigned to associate government-financed health care with Cold War fears of a communist takeover of medicine. American doctors had struggled for several decades to build respectable professional status and high incomes. Now, they were told that if “socialized medicine”—that is, health care that’s a public service—came to America, then they would earn no more than Soviet factory workers and would be overwhelmed by bureaucracy and documentation requirements.

When the AMA realized in the 1960s that its efforts to keep government out of health care were failing, it shifted its strategy to protect the fee-for-service model upon which high physician compensation had been built. AMA leadership drew from Relative Value Studies, an experiment the AMA had pioneered in California that created a billing model for the burgeoning private insurance industry, and made a list that they hoped would allow them to control government involvement in health care.

This list, the Current Procedural Terminology (CPT), was comprised of a series of billable procedure codes, stratified by compensation levels. The AMA persuaded doctors across the country that endorsing this list was vital for preserving their autonomy and income. With physician support, the AMA then convinced the government to adopt the CPT list as the foundation of its new billing system when it rolled out Medicare and Medicaid in 1966.

This allowed doctors and hospitals to bill the government just as if it were another private insurance company. The CPT system thereby stymied any substantive changes to the private, fee-for-service model of American health care. More than half a century later, the CPT system, most recently revised as CPT 2022, remains in place.

Fatefully, when the AMA licensed the CPT billing system to the government, it managed to include in the licensing contract a stipulation that prohibited the government from either seeking an alternative billing system or from creating its own. It required the government to mandate that health care organizations use this system to bill Medicare and Medicaid, and required the government to encourage all health care entities, regardless of relation to Medicare and Medicaid, to adopt this system as well. With a brilliant clerical strategy that was largely hidden from public view, the AMA took American health care hostage. Since 1966, it has been virtually impossible to function as an American health care provider without using CPT codes.

As a result, the AMA reaps an undisclosed amount every year from CPT licensing contracts. In 2019, for example, this appears to have been in excess of $100 million. These dollars support the AMA’s lobbying efforts and its prioritization of doctors’ and administrators’ economic interests, often over the interests of patients, public health, and rational improvements to the US health care system. But direct revenue gleaned by the AMA from the CPT billing system pales in comparison to the influence it allows the organization to exercise over the US health care system.

The AMA’s plan to preserve fee-for-service medicine was successful, but its consequences for patient experiences and physician workdays have been disastrous. This system has, in part because of government efforts to catch and prevent health care fraud by private actors, produced ever-expanding documentation requirements that now constitute the bulk of American doctors’ workloads. This is a major factor behind the alarming rates of physician burnout. As the US faces an already severe doctor shortage, one in five physicians now plans to leave their job

Despite our desire as physicians to believe that our patients’ care is determined by the nuances of doctor-patient relationships and the wisdom of our clinical recommendations, the truth is that patient care is largely determined by billing structures. Medical care in America entails only an illusion of choice. Bureaucrats dictate the options in advance, guided not by the goal of the best possible patient care but by the aim of maximizing revenue. The “freedom” of America’s private health care system has come at the cost of real choices—both doctors’ and patients’.

We will not produce genuine change in the American health care system nor can we effectively remedy its inequalities until we address its political-economic determinants. In this moment in which a pandemic has exposed and deepened the chronic crisis of access, quality, and equity in American health care, the medical community needs a new guiding ethic. We must reject the self-serving illusion that caregiving could ever be simply a matter of clinical duties and embrace the fact that care is always also a matter of political responsibility. Rather than continue to acquiesce to systems designed to generate wealth, advance careers, and protect doctors’ professional status, doctors have an ethical duty to organize in solidarity with our coworkers and patients. Collectively, we should demand that our lawmakers build the systems required to ensure highest-quality care for all, beginning with those communities whose needs the American health care industry has historically refused to meet.

To achieve this, Congress must not only establish a single-payer system; it must also reexamine what we mean when we talk about the “value” of care and who it is that determines this. Health care should be, as it is in all peer nations, a fundamental right ensured by the state via public systems paid for with public dollars. Instead of equating value in health care with billing, price, and profit, we need to invest in public systems that render each of these market-oriented terms irrelevant. Only once we have done so will we be able to make a right to health care an actual reality rather than simply an empty rhetorical gesture.

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