Uwe Reinhardt’s response to Theodore Marmor on physician reimbursement under Medicare:
Actually, I agree with Ted on the second-best solution. It would not be difficult to make the current system work much better–e.g., by taking out the assumed 1% reduction in fees for hypothetical annual productivity gains. In the end, a fee schedule needs to be negotiated. To set a formula and then to put the system on auto pilot for a long time, as we have done, inevitably invites problems.
I think the development of the Medicare fee schedule in the 1980s and 1990s was a solid achievement in policy analysis and implementation. The irony was that the RBRVS Bill Hsiao came up with on the seemingly scientific approach his team used resembled very much the negotiated relative value scales used in Canada. Negotiated fee schedules do tend to reflect the relative work effort that the negotiators believe to go into particular types of activities.
What the AMA now proposed really must be stopped. It is quite mischievous.
Best
UER