The Doctors' Revolt

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Doctors, the traditional advocates for the medical status quo, are increasingly in favor of major reforms to the U.S. health-care system.

Roger Bybee
The American Prospect
July 1, 2008

Doctors have historically been the watchdogs of the U.S. medical system, with the American Medical Association scaring New Dealers into dropping national health coverage from the Social Security Act and then the AMA shredding Harry Truman’s reform efforts in the late 1940s. But a new poll and other significant indicators suggest that doctors are turning against the health-insurance firms that increasingly dominate American health care.

The latest sign is a poll published recently in the Annals of Health Research showing that 59 percent of U.S. doctors support a “single payer” plan that essentially eliminates the central role of private insurers. Most industrial societies — including nations as diverse as Taiwan, France, and Canada — have adopted universal health systems that provide health care to all citizens and permit them free choice of their doctors and hospitals. These plans are typically funded by a mix of general tax revenues and payroll taxes, and essential health-care is administered by nonprofit government agencies rather than private insurers.

The new poll, conducted by Indiana University’s Center for Health Policy and Professionalism Research, shows a sharp 10 percent spike in the number of doctors supporting national insurance: 59 percent in 2007 compared to 49 percent five years earlier. This indicates that more physicians are eager for systematic changes, said Toledo physician Dr. Johnathon Ross, past president of Physicians for a National Health Program.

“What this means is the usual bloc of anti-reform is breaking up,” he told The Toledo Blade. “These doctors are looking in the eyes of sick [uninsured] patients every day.”

The poll results underscore mounting signs that doctors are resenting the increasingly short leash on which they are held by insurers and large hospital chains, the current masters of American medicine. And, increasingly, doctors seem to be showing support for a single-payer system that would essentially eliminate for-profit insurers and curb the power of big provider chains.

The ever-accelerating corporatization of health care is producing a seismic shift in the way that doctors look at universal health care. Doctors are experiencing an extreme and relatively sudden loss of control at the hands of insurers and hospital networks, while being snowed under by paperwork and bureaucratic battles with insurance companies over authorizations and payments.

Losing Faith in the System

Dr. Seth Foldy, a family physician and former health commissioner for the City of Milwaukee, believes that a decisive breakdown of the health-care system has changed the perspective of many doctors. “We’ve had a virtual recession over the last six years, with more people unable to get insurance and more doctors not getting paid,” he states. “There is an overall sense that the system doesn’t work, and, worse, there’s been no real effort to fix it.”

The statistics indeed suggest a major breakdown: Premiums have climbed 87 percent since 2000, and workers’ meager pay raises have been far outstripped by major increases in their share of the premiums. While the U.S. ranks 37th on a variety of quality measurements used by the World Health Organization, per-capita spending in the U.S. is twice as high as any other nation. For example, the U.S. spent $6,697 per person in 2005 compared with $3,326 in Canada. Meanwhile, the sharply escalating costs in the U.S. are leading to shrinkage of insurance coverage provided by employers. Some 47 million Americans are uninsured, with the present economic downturn certain to significantly increase those numbers.

Among the most acute symptoms of the current crisis is the rapidly declining share of employers who offer insurance to their workers. In Wisconsin, for example, 73 percent of workers had health insurance through their jobs in 1979, but by 2005, the share had plummeted to 58 percent. The Kaiser Family Foundation’s annual survey for 2007 shows that the percentage of employers offering coverage has decreased by 9 percent since 2000, mostly in firms with fewer than 50 workers.

As these trends have unfolded, coupled with growing bureaucratic control by insurers and hospital chains, many doctors have come to question whether for-profit insurers need occupy such a central role in U.S. health care.

State-level polls reinforce the just-released national survey from Indiana’s Center for Health Policy. A remarkable 64 percent of the Minnesota doctors surveyed in 2006 expressed support for a Canadian-style single-payer system that would drive insurers from their commanding role in the health system, reported Minnesota Medicine. The Minnesota poll aligned closely with a Massachusetts survey of doctors in 2004, which reflected 61 percent backing for single-payer, according to the Archives of Internal Medicine. Doctors’ views seem to be coming into closer alignment with those of the general public, of which 67 percent explicitly support a system like Canada’s or Britain’s.

This finding among the members of Minnesota’s Medical Society — an affiliate of the American Medical Association (AMA) — reflects a broader trend emerging even among the members of the AMA, traditionally the bulwark of those defending the medical status quo. In 1935, Franklin Delano Roosevelt wanted to include a national health plan in the Social Security Act. But his advisers persuaded him to omit inclusion of the health provision, fearing that it would lead the AMA to sink the entire Social Security project.

Similarly, when his successor Harry Truman outlined a plan for national health care after the 1948 election, the AMA opposed the plan despite 75 percent public support for his proposal. The AMA ignited a highly sophisticated, multilevel effort among its members and business allies to block the “socialized medicine” plan and politically crush its proponents, as professor Jill Quadagno of Florida State University outlines in her book, One Nation Uninsured. The Truman plan was soundly defeated, and the AMA succeeded in unseating health-reform champions like U.S. Reps. Andrew Biemiller of Wisconsin and Sen. Claude Pepper of Florida, both from “safe,” staunchly Democratic areas.

But the AMA faces a vastly different landscape today. Less than one-third of doctors belong to the AMA, as physicians increasingly identify with organizations based on their medical specialty. Moreover, despite the AMA’s harsh and incessant preaching against single-payer health care as “socialized medicine” and its active promotion of myths about “rationing” and “long waiting lines” in single-payer nations, the group’s own national polling has shown a dramatic shift in its members’ view of reform over the past 15 years or so. Where only 18 percent of AMA members favored single-payer reform in 1992, the figure had soared to 42 percent by 2004.

Single-payer proved more popular than more modest measures like public programs to cover the uninsured, an individual mandate to purchase insurance, or an employer mandate, according to the AMA’s 2004 Advocacy Agenda Setting Survey. Among some subgroups of the AMA, support for single-payer was even stronger, reaching 58 percent among psychiatrists. (Pediatric cardiologists showed a 70 percent level of support for single-payer in a 2003 poll of physicians published in the Annals of Internal Medicine.)

Meanwhile, members of the American College of Physicians — the nation’s second-largest doctors’ organization with 124,000 internal-medicine physicians and related specialists — voted in December 2007 to endorse the single-payer idea. The vote followed an analysis of health care in the United States and 12 other industrialized countries, after which the ACP concluded that universal coverage had been successfully attained elsewhere through single-payer or mixed public/private systems.

Ironically, the commanding role of for-profit insurers and other corporate players has produced all the dire effects that doctors were warned about as the products of “socialized medicine,” delivered instead by a system that generates immense profits. “When doctors were worried about the government looking over their shoulder, now they actually have insurers second-guessing everything we do,” says Dr. Deborah Richter, past president of Physicians for a National Health Program and now a general practitioner in Cambridge, Vermont.

“When doctors had a fear of bureaucracy, now they are being hit with different demands from every insurer,” Dr. Richter explains. “When doctors had a fear of losing income, they’re now facing declining reimbursements from the insurers.”

From Quadagno’s perspective as a sociologist who has studied the shifting contours of our nation’s health care, the complexity and failures of the current corporate-driven system are central forces behind doctors’ changing views. “One big factor is having to deal with so many companies, which creates huge paperwork and headaches,” Quadagno says. “And then doctors either have to turn away the uninsured or provide care for no compensation.”

“The stock of the private sector has gone down in doctors’ eyes, while the stock of the public sector hasn’t,” Foldy says. “Medicare is not unpopular among doctors. The concept of Medicare for all [which is how a single-payer plan is often described] is making ideological headway. And prior to the Iraq War, the VA system made great strides as a model of quality recognized by many doctors.”

Meanwhile, doctors’ perceptions of the for-profit insurance industry — which ranks about as low as Big Tobacco in the general public’s eyes — have declined as premiums soar, bureaucratic problems multiply, and the ranks of the uninsured grow. “There is much less trust that the private-sector insurance companies will be good partners in health care,” Foldy says. “Doctors are encountering a lot of problems with [insurance companies], in honesty and uprightness around timely and full payment. Doctors are facing a high denial rate when they file claims.”

Losing Control to Private Insurers

The high denial rate is the product of increasing scrutiny of claims by a mushrooming private-sector bureaucracy. As New York Times columnist Paul Krugman has noted, “Between 2000 and 2005, the number of Americans with private health insurance coverage fell by 1 percent. But over the same period, employment at health insurance companies rose a remarkable 32 percent. What are all those extra employees doing? … They are working harder than ever at identifying people who really need medical care, and ensuring that they don’t get it.”

Along with the denial of claims comes what Richter calls the incessant “second guessing” by insurance company staff. A survey by a physicians’ group called Primary Care Vermont found that doctors perceived insurers’ long-distance challenges to their judgments as a major problem requiring constant, time-consuming wrangling. “So you have an insurance clerk with a high school education saying you can’t do an MRI scan,” Richter says. “It’s a steady drip, drip, drip. That takes away from the care of the patient.”

A whole new layer of intrusion into doctors’ care of their patients has cropped up in the form of “disease-management programs,” which Richter argues are chiefly designed to generate more prescriptions for the pharmaceutical industry. “There are now disease-management program businesses, contracted by insurance companies to deal with patients with chronic illnesses like asthma, diabetes, or hypertension. These programs are now bypassing the doctor and asking the patient to request certain data or certain tests from their doctors.

In one especially troubling case, Richter recalls, “one of my patients got a letter just before the holidays from a disease-management outfit saying he had congestive heart failure. The letter spoiled his holidays because he was worried he was going to die, and when he finally came in to see me, he was mad at me for not telling him about his condition.” The patient finally calmed down when Richter showed him that he did not have the condition.

The level of bureaucratic complexity is nightmarish and ongoing, says Richter. In a single day, she deals with dozens of different insurance plans, each authorizing treatments for different conditions and each denying others. Moreover, each insurance plan has its own “formulary” — a list of approved drugs — from which doctors must prescribe in order to have the pharmaceuticals covered by insurance. “With people who are insured, you have to tailor what you do to the insurance — you have to change their prescription according to the formulary,” she says. “The new Medicare Part D makes it worse, because there are 25 to 50 different plans. In any one day, I’m dealing with 30 to 40 different formularies.”

Fighting over authorization for treatment is another major issue, says Foldy, who specializes in working with homeless psychiatric patients. “Surgeons probably hear [denial of authorization] a lot more than I do. This was even more of a problem earlier in the mid-1990s when [for-profit, insurer-owned or influenced] HMOs were more aggressive.”

The mid-1990s were a period of extreme restrictions on care, with employers viewing “managed care” as an effective means of holding down premiums. For-profit HMOs and insurers began pressuring hospitals to release patients before they were well enough to take care of themselves, as with “drive-through deliveries” where new mothers were sent home within 24 hours after giving birth.

“The [for-profit] HMOs have backed off some, and they’ve shown themselves to be failures in holding down costs,” Foldy says. When the HMOs were very rigid, employees wanted their employers to change insurance companies. “So the insurers decided that they would rather have higher premiums and happier patients. The incentives weren’t aligned right to hold down premiums.”

Heart surgeon Dr. Dudley Johnson, a renowned pioneer in open-heart surgery who now specializes in high-risk cardiac cases, has frequently encountered another form of bureaucratic resistance from insurers. Insurers are generally unwilling to refer patients outside the hospital and clinic networks with which the insurers have negotiated financial arrangements.

“In any number of cases, we’ve have to fight the insurers, even when the patients’ own doctors obviously couldn’t do the needed [specialized] surgery,” Johnson says. “Some of the patients would eventually get in. Some of them never did get clearance, even though their quality of life would be better with surgery as well as their prospects for survival.”

Doctors face severe pressures from their networks to refer only within the network, Johnson says. “If your doctor says a doctor outside your network is the best, that doctor gets in a lot of trouble. The insurers and networks are working in sync to get all the patients to come to their hospital. They have people who check the records to see to whom their doctors refer patients. So you hear doctors say, ‘I can’t write it in the chart who I’d recommend you to see.’ There’s a lot of pressure.”

Such pressures have driven physicians like Johnson to conclude that only a single-payer system can restore patient care rather than profit as the core of the health-care system. But even if the polls in Minnesota and Massachusetts reflect a broad shift toward that conclusion, single-payer advocates face the task of converting individual opinion into effective collective action.

Reform Movement Gaining Momentum

For activists like Richter, that means, first of all, helping doctors to discover that they are not alone in their alienation from the medical status quo. “Doctors are complaining but don’t realize how unhappy other doctors are,” she says. To break through this sense of isolation, Richter has given presentations on the need for single-payer reform at every hospital in the state of Vermont. The response now is markedly different from a few years back. “The crowds are bigger and the heads are nodding in agreement,” she says.

Richter readily concedes the difficulty of organizing doctors, who spend much of their time working alone and often either absorbed in building up a new practice or preparing for retirement. “They say organizing doctors is like herding cats. It’s tough to get them to join forces,” Richter admits. “I don’t see organized medicine joining to lead the fight now, but eventually they’ll get on the bandwagon.”

Quadagno is less optimistic based on her studies of the episodic upsurges for health-care reform in the U.S. and the current lineup of forces in the U.S. “Different organizations have different stances, and there isn’t any unified force,” she says. “Unions are now less unified and less powerful than in the past. And then you see the AFL-CIO’s energy going into efforts like ‘fair share’ initiatives to make Wal-Mart cover its employees rather than pushing for universal care, such as a single-payer plan.”

While pro-reform sentiment may be building among doctors, single-payer advocates will eventually face the fierce and well-funded opposition of the for-profit insurers and their allies like the drug companies (who fear that a single-payer system will bring on negotiations with the government overpricing, thereby slicing their profits). “Insurers have the capacity to do more than any doctors’ group,” Quadagno says ruefully. “I don’t think a single-payer plan can win.”

In contrast, Richter is much more optimistic based on her direct organizing experience and listening to doctors’ alienation from the fast-advancing corporatization of health care. Although she’s keenly aware of the insurer-and-pharma coalition’s influence, Richter believes that the insurers will continue to aggravate the grievances of both doctors and patients alike. For example, the insurance industry’s hiring explosion will continue to mean more exasperating fights for doctors seeking payment for their services, and for the general public trying to get its bills paid. The public’s approval rating of the insurers is likely to drop further.

Additionally, doctors are growing particularly inflamed by the trend for “medical tourism.” This term refers to the outsourcing of medical surgeries, just as major firms have been outsourcing both factory and white-collar work to low-wage nations. “More and more insurance companies are paying patients to go to places like India for hip and knee replacements, bypass surgery, and other operations,” Richter says. There were 150,000 medical-tourist operations last year. It started with cosmetic surgery, but now medical tourism has really expanded because insurers can pay just one-tenth or one-twentieth the cost they do here. Richter predicts, “That may finally bring along the surgeons,” who have been less inclined to fight for reform.

Given the enormous political clout of the medical insurers and allied health-care interests, winning single-payer health care in the United States is certain to be an arduous and lengthy fight. But the heightening conflicts between doctors and insurers and hospital chains, along with the AMA’s declining importance, has made a significant swath of the medical profession far more sympathetic to the single-payer option than advocates would have dared to dream just a few years ago.