Did you ever wonder why there are so many elements of the health-care industry supporting Democratic health-care proposals? Doctors, hospitals, pharmaceutical companies, academic medical centers, and Bill Frist are all pro-“reform.” Certainly there can be truly admirable instincts at work here: helping the sick, providing high quality care to the disenfranchised, improving the overall quality of our health care system. People being people, however, it is also worth considering another basis to understanding their motives: “Follow the money” and you will find good reasons for their support. In addition, you can find the seeds of conflicts that will develop between these various entities and the federal government as more intense efforts at reining in health care spending develop in the future.

Doctors– Every year for the past 10 years or so, Medicare is supposed to reduce the amount of money paid for each unit of medical work carried out by physicians. These units are called RVU’s or relative value units. The reason that this reduction is mandated is that the amount of money Medicare pays out to doctors is limited by a rate of growth in costs that is said to be “sustainable”. But every year, under intense lobbying pressure, Congress has canceled this reduction and actually voted an increase in payment. Next year, unless something changes, the reduction will be 20%. One of the “deals” worked out in the new proposals is that this annual reduction in Medicare payments will be permanently eliminated.