May 22, 1973
Page 16459
THE AMA AND PHYSICIANS' CHARGES UNDER MEDICARE
Mr. MUSKIE. Mr. President, it has come to my attention that the American Medical Association, a most sophisticated organization, has used some figures in a very unsophisticated way. In the February 1973 issue of AMA Update, the association prints some figures issued by the Social Security Administration to show that average charges by doctors were actually lower in 1971 than they were when the medicare program began – down 5.2 percent for surgical services and down 11.5 percent for outpatient medical care. The headline says, "Under Medicare, Average Doctor Bill Has Been Going Down (Not Up) SSA Data Shows."
Now, since we have all been hearing, and experiencing, the increasing costs of medical care it would indeed be remarkable to find that our perceptions and information have been all wrong – at least with regard to the medicare program. We are asked to believe that average charges for physicians' surgical services have gone down from $174 during the period July 1966 to December 1967 to $165 during January 1971 through December 1971. At the same time average charges for medical services were reduced from an average of $52 to $46.
But what do these figures really mean? A special analysis from the Social Security Administration gives us a somewhat different interpretation from the AMA, for these figures refer to the amount per bill and not per service.
The Social Security Administration states:
Use of the "average charge per bill" is a wholly inappropriate indicator of price per unit of service. One bill submitted under the SAE program often reflects more than one service or procedure. Average charges per bill for physicians' surgical and non-surgical services have shown a declining trend since the beginning of the program, as the articles have reported.
However, all available evidence indicates that this is a result of a change in the billing patterns of physicians which has led to a more frequent submission of bills with fewer services contained on each bill.
The figures which the AMA did not use show that during the first 18 months of the program 25 million bills were processed; during 1971 the number had grown to 45 million. The reason for the drop in charges per bill stems from a reduction in the number of services per bill rather than a reduction in the charge per service.
SSA says unequivocally–
There is no evidence that would indicate that charges have declined at any time during the program's existence.
Data from the current Medicare Survey show that average charge per service to SMI enrollees has risen from $9.47 in 1967 to $12.27 in 1971 for an average annual increase of 6.7 percent. At the same time the physicians' fees component of the Consumer Price Index has risen at the identical rate of 6.7 percent. In addition, data on "reasonable charges" in the medicare program compiled by SSA have also shown an increasing trend since the program began.
It is obvious that the per bill figure is not a reliable indicator of medical charges contrary to what the AMA would by implication have us believe, and it is also obvious that the AMA is being something less than candid in its use of these figures. I deplore this attempt to manipulate the facts concerning rising medicare charges through the misuse of social security figures. The AMA should be in the forefront of efforts to curb rising costs rather than to deny their existence.
Mr. President, I ask unanimous consent that the material from the AMA Update and the Social Security Administration, to which I have referred, be printed in the RECORD.
There being no objection, the material was ordered to be printed in the RECORD, as follows:
UNDER MEDICARE, AVERAGE DOCTOR BILL HAS BEEN GOING DOWN (NOT UP) SSA DATA SHOWS
Several readers have asked us about the average charges for medical care services provided under Medicare. Usually, the questions pertain to such things as ...
What do doctors charge under the program?
Is it true that doctors' bills have been "soaring" since the program began in mid-1966?
And what about hospital costs?
Answers to these and kindred questions can be found in data published by the Social Security Administration, the government agency which oversees the Medicare program. (We compiled the accompanying table from SSA reports.)
Among other things, the SSA figures indicate that hospital charges had nearly doubled (up 83.0%) by the end of 1971.
On the other hand, average charges by doctors were actually lower than they were when the program began – down 5.2% for surgical services and down 11.5% for outpatient medical care.
Comparable figures for 1972 are expected to be available by mid-1973.
Under Medicare, incidentally, a doctor bill is approved for payment only if it has been determined by the insurance carrier to reflect the doctor's "customary charges" for similar services, and also the charges prevailing among other doctors in the locality for similar services.
AVERAGE CHARGES FOR MEDICAL CARE SERVICES UNDER MEDICARE
Physicians' bills
Hospital Charges
(Per day) Surgical Medical
July 1966 to December 1967 $47 $174 $52
January 1968 to December 1968 $56 $164 $51
January 1969 to December 1969 $64 $163 $51
January 1970 to December 1970 $74 $165 $49
January 1971 to December 1971 $86 $165 $46
THE NBC NEWS VERSUS AMA CONTROVERSY
(Progress report No. 1)
No! That was the gist of NBC News' response to AMA's formal request for equal time to refute factual errors in NBC News' telecast, What Price Health?
"We believe that your charges and your request for 'equal' time are completely without basis," said Richard C. Wald, president of NBC News.
In response, AMA's executive vice president, Dr. E. B. Howard, called Mr. Wald's letter "unresponsive" to our request. "We cited at least 15 instances of inaccuracy in What Price Health? and substantiated them with specific documentation," he noted.
Dr. Howard asked NBC News to produce its documentary support for the statements AMA has challenged. "We have put ourselves on record," he said. "We ask that you do the same and let the public be the judge."
In Update for January, we spelled out AMA's objections to several of the statements made by NBC News in the broadcast. At the same time, we offered NBC News "equal space" (8 pages) to comment upon or refute our criticism.
At press time, NBC News had not yet indicated whether it plans to accept that offer. (It's still open.)
QUOTED WITHOUT COMMENT .
... from a recent speech by William D. Ruckelshaus, Environmental Protection Agency administrator.
"A questionnaire was circulated a few years ago noting the air pollution, noise and congestion caused by the automobile, the displacement of tens of thousands of homeowners and small businessmen by highways, the destruction of natural beauty, the tens of millions of injuries and the almost 2 million deaths during this century and so forth – and people were asked, "is it worth it?"
"Eighty-five percent responded with an enthusiastic and unqualified, Yes."
PHYSICIANS' CHARGES UNDER MEDICARE
In recent weeks, stories have appeared in various publications which contend that, physicians' charges to Medicare patients have declined since the program began in July 1966. Specifically, a 5.2 percent decline in charges per surgical procedure and an 11.5 percent decline in charges for other medical services were reported for the period 1966-71. SSA data on average charges per bill under the Supplementary Medical Insurance (SMI) program were used to substantiate this claim.
Use of the "average charge per bill" is a wholly inappropriate indicator of price per unit of service. One bill submitted under the SMI program often reflects more than one service or procedure. Average charges per bill for physicians' surgical and nonsurgical services have shown a declining trend since the beginning of the program, as the articles have reported. However, all available evidence indicates that this is a result of a change in the billing patterns of physicians which has led to a more frequent submission of bills with fewer services contained on each bill.
Partial substantiation of this trend is the increase in the total number of bills reimbursed under SMI. During the first 18 months of the program (July 1966-December 1967), 25 million bills were processed; during 1971, the number had grown to 45 million. Therefore, the reason for the drop in charges per bill stems from a reduction in the number of services per bill rather than a reduction in the charge per service. In fact, data from several sources indicate that charges for physicians' services have increased since the program began.
The Current Medicare Survey (CMS) is a continuing monthly survey initiated by SSA to provide current estimates of hospital and medical services used and of charges incurred by persons covered under the program. Data from the CMS on average charge per service to SMI enrollees show that charges have risen from $9.47 in 1967 to $12.27 in 1971 – an average annual increase of 6.7 percent. The physicians' fees component of the Consumer Price Index has risen at an identical average annual rate (6.7 percent) during this period. In addition, data on reasonable charges compiled by SSA have also shown an increasing trend since the Medicare program began. There is no evidence that would indicate that charges have declined at any time during the program's existence.
Finally, per capita reimbursement under SMI has increased 37 percent since the beginning of the program, rising from $73 in 1966-67 to $100 in 1971. Data from the CMS on per capita use of services show that there has been little or no increase in utilization in recent years, indicating that price rise is largely responsible for the higher benefit payments.