How an Influential Group of Doctors Exerts Influence Over Medicare Payments to Physicians

Imagine a scenario in which Exxon Mobil recommends to the U.S. Environmental Protection Agency (EPA) how much carbon dioxide that oil and gas companies should be allowed to emit -- and the EPA approves those recommendations 90 percent of the time. We all know that industry often has outsized influence over the regulatory process, but having 90 percent of its recommendations rubber-stamped would be outrageous.

Yet, the new Public Citizen report, "Inside Job," shows that this is exactly what has occurred in the health care industry. Last week, an American Medical Association (AMA) committee met to develop highly influential recommendations regarding Medicare Part B physician payment rates. The meetings themselves are dull and typically involve lengthy discussions of obscure medical procedures, but their impact on the U.S. health care system cannot be overstated.

And while physician payments might seem less of a problem than toxic air pollution, the impact on the U.S. economy cannot be understated. Because Medicare is typically used as the baseline for how much private insurers pay physicians, any distortions to the Medicare have widespread effects on health care and the broader economy.