In 1979, after three years of group practice, I opened an office as a solo vascular surgeon. With a wife, three children and a mortgage to support, the move was gutsy. To survive, no referral was too small, no operation too minor to be ignored. Every patient encounter was appreciated. A partner joined and we prospered. Despite hard work and talent, clouds were on the horizon, as we realized that small groups were disadvantaged by omnivorous insurance companies who cared little for good outcomes. Our practice was assimilated by a major hospital. After 12 years and my partner’s death, it became apparent that my employer and I had dissimilar agendas. With little explanation, I am forced to move on.
Since my energy and ability remain vigorous, the need to re-emerge in private solo practice provides the only option. I will again depend solely upon my wit and resources. Having avoided expensive doctor traps like airplanes, boats, cars and divorce, financial security is not an issue. Still, creating a practice after 47 years reveals a completely different mine-laden medical landscape.
Facing so many daunting obstacles, starting a practice from scratch may no longer be possible. Easier for me with money in the bank, it would seem to be essentially impossible for a doctor out of fellowship with $250,000 worth of student debts.
Insurance companies and hospitals have altered the environment to the point where physicians are now considered a “commodity.” The U.S. spends $4.9 trillion on healthcare (2023), with only $1.18 trillion going to doctors and “clinical service.” (Since 80% of doctors are now employed, I’m not sure how ChatGPT arrived at that figure.) Most employed doctors working for hospitals receive salaries supplemented at facility rates, which are quite a bit (!) higher than procedural rates.
Considering the remaining $3.8 trillion, and since other developed countries spend half of what the U.S. spends, one can assume that 50% goes for administration and/or corporate profit. Our outcomes are dismal, somewhat worse than 18% in world rankings. How did this come about? Or rather, how did doctors and our powerful American Medical Association (AMA) allow this to happen?
On May 20, 1962, President John F. Kennedy gave a speech at Madison Square Garden in New York outlining the foundation of Medicare. The King-Anderson bill, as it was known, was to be part of Social Security. As outlined, it would only cover 66% of the hospital bill, the patient having to fork over the rest. Kennedy opined: “The doctors don’t comprehend what we are trying to do. We don’t cover doctors’ bills here. We don’t affect the freedom of choice. You can go to any doctor you want.”
The AMA was vehemently opposed to this bill. Jesuit-trained Dr. Ed Annis of Miami made numerous speeches on the AMA’s behalf in 1961. In fact, he debated Sen. Hubert Humphrey on television, vociferously arguing against its passage. Jesuit graduates are great debaters, and his Marquette training served him well. The AMA gave him the perfect opportunity. They rented Madison Square Garden, and, on television, Dr. Annis spoke to an empty stadium. He argued that the legislation would impose an “unpredictable burden on every working taxpayer and will lower the quality and availability of hospital services throughout our country.” The overture was not lost on the U.S. public and the event enhanced both the reputation and power of the AMA.
President Kennedy was assassinated in 1963 and never enjoyed the fruits of his goal of providing healthcare for all. His successor, President Lydon B. Johnson, passed the Medicare and Medicaid Act in 1965. This legislation remains an essential part of the American fabric. Unarguably, Medicare and Medicaid have saved countless lives.
Ed was a terrific guy with a twinkle in his eye. He loved telling the story of his debates with labor leaders, politicians and, indeed, the Madison Square Garden speech. When he was chosen president of the AMA (out of turn), he insisted that the elected president not be denied his year in office. He was quite proud that he never missed an AMA meeting for some 50 years until his passing in 2009. While he may have been on the wrong side of history, Ed never regretted his stance on Medicare and felt that the loss of physician autonomy and poor patient care were the result. He may not have been wrong.
Although Medicare/Medicaid are firmly entrenched, no one could have anticipated their derivatives: health maintenance organizations (HMOs) and Medicare Advantage plans, called by some “Medicare Dis-advantage.” With justifiable reason. In spite of increased utilization and pricey pharmaceuticals, Medicare Advantage plans enjoyed their highest gross margins of profit in 2023, $1,982 per enrollee. Medicare Advantage total revenue reached $384 billion in 2023.
While I am not sympathetic to their plight, 2024 saw a reduction in profitability because of increased utilization by seniors, leading to reduced benefits and disposing of unprofitable markets. Negative patient reaction caused President Joe Biden to reduce overpayments, adjustment of reimbursement rates and risk adjustment.
That insurance giant UnitedHealthcare is far from a paragon of virtue amid all of this is exemplified by a string of lawsuits: misleading investors; insider trading; NaviHealth algorithm to deny rehabilitation; algorithms for care denials; antitrust acquisition of Amedisys (home healthcare and hospice) and Optum; the No Surprises Act; upcoding fraud. This is but a partial list. Patient frustration is evidenced by the unexpected outpouring of sympathy for a lone assassin who gunned down the CEO of UnitedHealthcare in December. Not that people endorse violence as a solution, but frustration with insurance companies is so great that the CEO’s murder poked a sleeping bear.
And we physicians—who do most of the work—have not seen an increase in reimbursement since 2000. Even more insulting is the fact that physician pay (per the Medicare Physician Fee Schedule) was cut 2.83% while Medicare Advantage plans received an additional 3.2%! President Donald Trump’s One Big Beautiful Bill Act includes a 2.5% Medicare increase for 2026. Without additional legislation, Congress will be obligated to remove this increase in 2027.
Perhaps his frustration after hearing the same complaints verbalized by the membership culminated in a fiery speech by outgoing AMA President Bruce Scott. It was simply titled: “We’re not going to take it anymore!” Regretfully, the only fatigued solution they offer is to give more money to politicians in the forlorn hope that they will eventually see the error of their ways and direct federal funding to those who provide hands-on patient care.
Yet at every turn, health insurers construct new roadblocks. Their requiring physicians to obtain prior authorization has made treating patients more difficult and inserts another impediment to patient care, as well as cost to physicians. UnitedHealthcare bought InterQual to determine medical necessity, which is akin to Health and Human Services Secretary Robert F Kennedy Jr. assessing the value of vaccines.
AMA leadership desperately pleads with Congress to tie Medicare funding to the Medicare Economic Index. Congress, faced with a $35 trillion deficit, and wars in Eastern Europe and the Middle East, is unlikely to reform healthcare anytime soon.
So where is a modern Dr. Ed Annis? Why does the AMA not rent out Madison Square Garden and preach to the multitude who stand ready to support righteous leadership? Why have they abandoned their role of patient advocacy? Why do they remain content to fiddle with corporate mandated impositions.
To the good, the AMA House of Delegates voted to pursue a class action lawsuit against health insurers’ prior authorization by a 80–20 vote with over 700 delegates voting. Maybe that’s a start. Maybe we can go further, using the McCarran-Ferguson exemptions (named the Competitive Health Insurance Reform Act of 2021) that exposes the pernicious conduct of health insurance companies to antitrust laws. That would serve AMA members and our patients better than pleading for legislative relief.
Until then, I will have to be content with earning $475 for a below-knee amputation and $400 for an arteriovenous fistula. But little can compete with the satisfaction of performing a successful amputation or the gratitude of a patient.
Arthur E. Palamara, MD, is a vascular surgeon practicing in Hollywood, Florida. He is active in county, state and national medical organizations
