If you profess to analyze health care financing-with or without offering a fix to whatever problem(s) you believe to be present-you cannot leave out consideration of the role of the mysterious and powerful RUS. (The RUS is the RBRVC Update Committee .Here is a link to the AMA description of that entity.)
Yet,this seem to be exactly what one of the most widely quoted health care economists has done. Dr. Roy Poses discusses this interesting omission in another of one of his home run blog entries.
The economist is Professor Uwe Reinhardt of Princeton and the discussion at issue can be found here. Reinhardt places at least some of the blame for the high cost of medical care on the fee for service system.Interestingly, he does not mention that the current fee-for -service system has- since 1990- become one that is characterized by wage and price controls -at least as for as payments for Medicare is concerned.
Dr Poses says that there are strong positive incentive for procedures and strong negative incentives for cognitive services ( this includes much of what primary care consists of) and there are many interested "stakeholders" favoring the growth of procedures. These incentives in large measure can be traced back to the mysterious and only recently talked about RUC. that advises Medicare what to pay for various medical services. They provide a major input to Medicare in that regard.
If we regress further back in the causative chain, we note that the RUS is a child ( born in 1991) of the changes that took about 1990 in Medicare payments from what was called customary, reasonable and prevailing payments for medical services to a Medicare determined price control system. With such a price control system there was a need for a mechanism to set the prices and somehow the AMA was able to insert a committee into the system that would enjoy a powerful position that is virtually invisible to scrutiny.
Poses raises the question as to why Reinhardt would apparently omit the effect of the RUS on medical costs and I would additionally ask why he ignores the effect of wage and price controls on medical care. He then presents some interesting associations of Professor Reinhardt including the fact that he is on the board of an insurance company and a medical device company.
So, are we just playing around with an ad hominem fallacy.The fact that Reinhardt is on the board of and holds stocks in these companies does not necessarily mean that his analysis would be biased in favor of a conclusion beneficial to those entities even though he owes them fiduciary duty.One should evaluate his analysis without considering how those relationships might bias his conclusions. Fair enough. I challenge his conclusion based on his not explicitly taking into account wage and price controls and the power of the RUC and that the use of the term " fee for service" is misleading as the fees are basically set by the federal government for Medicare and for practical purposes (other than retainer medicine practices) adopted by the other third party payers.
What is not an ad hominem argument but a question regarding transparency is Poses's exposition of how those relationship do not appear in his Reinhardt's Princeton website CV nor in his disclosures in a Princeton Bioethics Forum ( give me a break- in an ethics forum he does not disclose possible conflicts of interests) nor when he discussed health care finance on NPR. Interestingly, Reinhardt is also on the editorial board of JAMA. (My web search efforts to locate the listing of possible conflicts of interests for those folks was unsuccessful.If anyone has that link,please let me know.)
To discuss the problems with medical care and medical care financing without substantively considering the role of price controls and the pivotal role of the RUC is not limited to Reinhardt's commentary. A NEJM round table discussion that purported to talk about redesigning primary care did the same thing. If you want to know what is happening with medical care, Roy Poses's discussion of that NEJM article is required reading.