Is the AMA endorsement of Obamacare based on financial gain?

That's an interesting conclusion reached by Dr. Erik Dahl who penned a letter to the editor that appeared in the Wall Street Journal:

Democrats are touting the AMA's endorsement, little has been reported in the media that a large portion of the AMA's income (the exact amount will not be released by the AMA) stems from the exclusive rights to the medical billing codes that doctors are required to use when they submit bills to insurance plans.These are essentially the same as a bar code, and are used for nearly every medical procedure, from appendectomies to heart transplants. This arrangement results from a once-secret deal established in the 1980s whereby the AMA maintains and updates the codes at no cost to the government, but generates millions each year selling the code books and software licenses to doctors and insurers. This enabled the government to streamline billing procedures for its insurance programs by setting a single code as the standard.

Currently, this agreement is interpreted by many in Congress to be revocable at any time through a simple rule-making process. As the AMA claimed $70 million from sales of "books and products" in 2008 and membership dues raised $44 million for the AMA that year, it is logical to conclude that the AMA is fearful that its lucrative source of revenue would vanish without the current support of the Democratic plans.

Indeed, the revenue the AMA gathers from the payment system continues to be fostered in this bill. It is right to question whether the AMA can represent the interests of doctors while it relies on a large portion of revenue that comes from a government-sanctioned monopoly.

This would explain why the AMA is touting the bill despite the fact that it contains a huge cut in Medicare payments to doctors while burdening physicians with a slew of new regulations.

It should be noted that many local AMA chapters have come out four square against Obamacare, including the largest chapters in Florida and Texas. This appears to be an example of the rank and file differing with the leadership whose financial interests are different than their membership.


Hat Tip: Ed Lasky


That's an interesting conclusion reached by Dr. Erik Dahl who penned a letter to the editor that appeared in the Wall Street Journal:

Democrats are touting the AMA's endorsement, little has been reported in the media that a large portion of the AMA's income (the exact amount will not be released by the AMA) stems from the exclusive rights to the medical billing codes that doctors are required to use when they submit bills to insurance plans.

These are essentially the same as a bar code, and are used for nearly every medical procedure, from appendectomies to heart transplants. This arrangement results from a once-secret deal established in the 1980s whereby the AMA maintains and updates the codes at no cost to the government, but generates millions each year selling the code books and software licenses to doctors and insurers. This enabled the government to streamline billing procedures for its insurance programs by setting a single code as the standard.

Currently, this agreement is interpreted by many in Congress to be revocable at any time through a simple rule-making process. As the AMA claimed $70 million from sales of "books and products" in 2008 and membership dues raised $44 million for the AMA that year, it is logical to conclude that the AMA is fearful that its lucrative source of revenue would vanish without the current support of the Democratic plans.

Indeed, the revenue the AMA gathers from the payment system continues to be fostered in this bill. It is right to question whether the AMA can represent the interests of doctors while it relies on a large portion of revenue that comes from a government-sanctioned monopoly.

This would explain why the AMA is touting the bill despite the fact that it contains a huge cut in Medicare payments to doctors while burdening physicians with a slew of new regulations.

It should be noted that many local AMA chapters have come out four square against Obamacare, including the largest chapters in Florida and Texas. This appears to be an example of the rank and file differing with the leadership whose financial interests are different than their membership.


Hat Tip: Ed Lasky