Weighing in on Reform

The AMA’s new leader sees great benefits to impending changes in health care—but says doctors got short changed.

While praising parts of the health care reform bill, Dr. Peter W. Carmel warns that curtailed funding could undermine Medicare, “the linchpin of the whole health care system.”
Photo by Chris Crisman.

There’s no stronger advocate for health care reform than Dr. Peter W. Carmel. Yet, as the newly elected leader of the nation’s largest physician organization, Carmel feels the federal government is giving doctors a raw deal.

Carmel, a pediatric neurosurgeon at UMDNJ-New Jersey Medical School who will become president of the American Medical Association next year, says the organization has long supported changes in insurance regulations and the structure of the health care system. Even before President Obama was elected, he points out, the AMA sponsored a three-year, $18 million ad campaign for universal health coverage. So it’s not surprising, he says, that the AMA backed the Patient Protection and Affordable Care Act—or at least the portions of it that coincided with the association’s goals.

Since the reform bill’s passage last spring, the AMA has continued its support. “If you just look at what the reform law has done in the insurance market, it’s remarkable: You can’t be denied health insurance because of a chronic condition,” Carmel says. “Your children can’t be denied insurance. The ability to eliminate preexisting-condition exclusions and to remove the coverage caps on either a single episode of sickness or a lifetime of medical payments—that’s worth the price of admission alone. That has done more to protect patients than anything else.”

On the other hand, Carmel says, many of the AMA’s 228,000 members—about 25 percent of doctors nationwide—think that they “should have gotten something back” in return for the organization’s support of the legislation. The physicians’ biggest complaint is that Congress did not repeal Medicare’s payment formula, known as the Sustainable Growth Rate. Unless Congress acts soon, SGR will result in a 21 percent cut in Medicare payments to doctors in December and further reductions in coming years.

Physicians also object to the reform law’s creation of an Independent Payment Advisory Board (IPAB) that also could reduce Medicare payments to doctors starting in 2014. The fifteen members of the board would be nominated by the President and confirmed by the Senate. Carmel and other physicians oppose the IPAB because it would not be directly accountable to the public yet could change how much doctors are paid in public programs. Yet Carmel argues that Congress—which is accountable to the voters—has been irresponsible when it comes to Medicare reimbursement of physicians.

“The Congress has been incompetent,” he declares. “More than that, they have been reckless and irresponsible with the way they have handled physician payments. Every time they jockey around for political advantage, they really threaten the number of physicians who can stay in Medicare or who are willing to stay in Medicare. And when physicians don’t see those patients, the whole system is in trouble. Medicare by itself is the linchpin of the whole health care system. If Medicare fails to keep doctors seeing patients, then all of health care reform will fail.”

Despite fiery statements such as this one, the outspoken AMA president elect is affable in person. Interviewed by New Jersey Monthly recently in his book-lined office at University Hospital in Newark, where he still practices neurosurgery, Carmel has an easy smile and a ready sense of humor.

Recounting how he got involved in the AMA, Carmel says that, 25 years ago, he was on the board of the Congress of Neurological Surgeons, which needed someone to represent it in the AMA House of Delegates. “The board was desperate for someone to fill the job. I said I would do it, but only for two years, maybe three. That was in 1985,” Carmel recalls, chuckling.

From then on, Carmel’s trajectory at the AMA was straight upward. After chairing a couple of important committees, he was elected to the Board of Trustees in 2002. He was elected president in June, winning a three-way race. He is only the second AMA president from New Jersey, and the first since 1958.

Carmel has had a distinguished career as a physician, researcher, and educator. Following his training at NYU Medical School and his residency at Columbia University, he served as a faculty member at Columbia for 25 years. In 1969, he founded the neuro-endocrine laboratory at Columbia’s College of Physicians and Surgeons. Over the years, Carmel has authored or co-authored almost 100 peer-reviewed articles based on his research on the human nervous system.

In 1994, Carmel moved to UMDNJ-New Jersey Medical School, where he became a professor and chair of the neurological surgery department, as well as co-medical director of the Neurological Institute of New Jersey (NINJ). He switched universities, he says, mainly because UMDNJ “was the last possible academic institution in which I could get to be chairman and train residents and not have to move from my apartment in Manhattan.” Also, while he no longer does research, he has been able to “live vicariously through the laboratories of my faculty” at NINJ, a large research facility in Newark.

Carmel is proud of UMDNJ’s residency program for neurosurgeons. “The training program here is one of the finest in the country,” he says, citing the evaluations of the national organization that accredits such programs. He adds, “Our residents here have scored in the top ten [programs] in the country on written board exams for three of the past five years.”

Carmel does not believe that the provisions of the Affordable Care Act will restrain health care spending growth—and thereby, insurance costs—significantly. But he says the AMA is open to the innovations that the reform law promotes in an effort to raise the quality and lower the cost of health care.

Among these initiatives are changes in payment methods. For example, Medicare will test the idea of paying a single, bundled amount for hospital and post-discharge care to encourage hospitals, doctors, and other providers to work together. The government is also providing financial incentives to encourage the formation of accountable care organizations, which are groups of hospitals and doctors that will be financially responsible for the cost and quality of care.

Carmel says these approaches should be tried out. But he warns that physicians will not favor any reimbursement method that allows a large institution, such as a hospital, to control how much doctors get paid. “Before we enact any of these things into law, we better make pretty sure there won’t be adverse effects,” he says.

The UMDNJ educator is also skeptical about health insurers’ efforts to profile physicians and use financial incentives to steer patients toward doctors who are deemed to be higher quality and more efficient than their peers. Although the insurers claim that quality is as important as cost, he says, they’re looking mainly at the cost and are using unscientific methods to measure cost differences.

With the same goals of increasing quality and lowering costs, the government has been pushing hard for physicians to adopt electronic health records (EHRs). Many doctors remain skeptical, Carmel says, because they don’t know whether they will recover their investment in EHRs, even with government subsidies. But he predicts that most practices will have electronic records several years from now.

One of the biggest problems that health care reform faces, Carmel says, is the shortage of physicians—which will worsen when 32 million additional people gain insurance coverage, starting in 2014. Both primary-care doctors and specialists are in short supply, he says; and, because it takes so long to train new doctors, there’s no easy way to meet this impending surge of patient demand.

Exacerbating the problem, he says, is the refusal by Congress to remove a cap on the federal funding of residency training positions. The cap, which has been in place since 1997, restricts the number of medical school graduates who can get the advanced training they need to specialize, pass board exams, and get jobs. “Last year, for the first time in memory, there were a significant number of American medical graduates who couldn’t get a residency position,” Carmel notes.

Meanwhile, an increasing percentage of international medical graduates (IMGs)—individuals who attended medical school abroad—could not get into residency programs this year, Carmel notes. Whereas 93 percent of U.S. graduates “matched” to residency positions, fewer than half of the IMGs did. This is a real issue in New Jersey, Carmel says, because 47 percent of practicing physicians in the state are international graduates. “With the cap on Medicare-funded training positions, the access to training in the U.S. for IMGs is closing,” Carmel laments.

As for the primary-care shortage that has gotten the lion’s share of media attention, Carmel says the AMA is opposed to any government policy that would change the Medicare fee schedule to shift money from specialists to generalists in order to make primary care more attractive. On the other hand, he observes that “the average income for a primary care physician is startlingly low.” (While the average annual income of $186,000 for a general internist might not seem low to most people, it’s less than half of what a gastroenterologist or a urologist earns.)

Overall, the AMA gives health care reform a mixed score. “For patients, by far the best thing in the health care law are the changes in the insurance marketplace,” Carmel says. “But we make a mistake thinking that we can deal only with the care of patients and not with the payment of doctors. Without the doctors, those patients won’t get care.”

Ken Terry, a former editor of Medical Economics magazine, is the author of the book Rx for Health Care Reform.

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