Bob Rosenblatt, Special Correspondent

Throughout 2015, the Academy is working with partners to create a platform for dialogue around the history and future of these two vital programs, including this weekly Covered blog series. Covered is written by Bob Rosenblatt, a Senior Fellow at the National Academy of Social Insurance and editor of the website HelpWithAgingLearn more about the Academy’s celebration of the 50th anniversary of Medicare and Medicaid.

White House Tries to Ease  Docs’ Fears of Medicare

By Bob Rosenblatt, Special Correspondent

Washington, DC — With legislative victory in sight, the White House is worried that physicians will refuse to participate in the new health coverage program for Americans over 65 once it becomes the law of the land. This is the private nightmare of White House strategists and congressional supporters of the Medicare program. The proposal, which passed the House last week and awaits action in the Senate, would expand Social Security by creating a new health benefit, paid for by workers and their employers, to cover hospital bills. Combined with this would be a voluntary insurance program for those over 65 to pay for their doctor bills.

The leading opponent of the so-called Medicare proposal is the American Medical Association, which spent a record-breaking $951,570 in lobbying efforts against the bill during the first quarter of this year. Most of that money went for advertising in newspapers and on radio and television.  This is the most spending by the doctors’ group since 1949 and 1950, when the AMA spent more than $1 million during each of those years fighting President Truman’s proposals for national health care.

The White House is fearful. Patients are being told that they may have to find another physician next year if the government steps in with ‘socialized medicine’ and ‘shuts the doctors down,’ according to a White House staff member, who agreed to discuss the issue without being identified. Members of Congress are also hearing from many nervous patients.

The Johnson Administration carefully sought to avoid elements in the bill that might anger the medical profession. For example, the President proposed hospital benefits for persons over 65 would be limited to only services provided by the hospital, including the daily bill and nursing care.   Last year’s version of the bill, which never made it out of a House-Senate conference, would have covered the costs of services in a hospital provided by certain groups of doctors: pathologists, anesthesiologists, and radiologists.

This year’s legislation, passed by the House, cuts back that coverage. Only doctors who are on the staff of the hospital, and whose services are billed through the hospital, will have their services covered by the new Medicare benefit.

The bills submitted by outside pathologists, radiologists and anesthesiologists would be covered only under the voluntary insurance program people over 65, with the individual paying $3 a month for the premium and the federal government paying the other $3 a month. This would put their bills in the same category as any medical bill now being paid through private insurance.

By keeping things separate for billing, the Administration is offering a gesture of good will to the doctors, assuring them against feeling trapped in a government system. But it is not clear whether this is enough or whether doctors might still refuse to participate. The payment system for surgeons is unclear. They would be covered under the voluntary program, but their work would be carried out in hospitals under the new Social Security health benefit.

The AMA is trying to defeat the new Medicare proposal by emphasizing how doctors would be treated.  In its publicity campaign against the bill,  the AMA argues that consumers shouldn’t support the Johnson Administration’s plan since it pays for hospital care but not for doctor’s fees. The Administration plan is a “lure, not a cure, for the problems of the aged,” said AMA president Donovan F. Ward.

The AMA sought to build support for an alternative proposal called “eldercare” that would have the federal government expand funding for the states, which could use their welfare programs to cover the medical bills of indigent people who are 65 years old and over.  Each state would decide on benefits and eligibility standards. The AMA plan was incorporated into the final package passed by the House, but in a very different form: the federal government would give the states new funds to expand medical coverage for poor people under 65.

The House-passed bill, which looks likely to win Senate passage and become law, is still rooted in the assumption that doctors will provide care for those over 65, even in a government program they don’t like.

At the White House, they are hoping this will be true, that doctors will provide the care, and their bills won’t be sky-high.

President Johnson asked for reassurance about this in a March 23 private phone call with Wilbur Cohen, the Administration’s point man in these negotiations, House Majority Leader John McCormack (D-MA), and House Majority Leader Carl Albert (D-OK).

“Does the doctor charge what he wants to?” President Johnson asked. Cohen reassured the President that the federal government would contract with private insurers like Blue Shield to run the billing system.  “They would regulate… the fees of the doctor,” Cohen said. The goal is to “be sure that the government wasn’t regulating the fees directly; they shouldn’t deal with the individual doctor,” he said.

This means the new government medical program would use the same monitoring system as private insurers, with the personnel of the private insurers doing the work.  A doctor could “charge only the reasonable charge but this intermediary, the Blue Shield would have to do all the policing so that the government wouldn’t have its long hand…” in the dealings of the doctor, Cohen said.

The President thinks he found a cure for the nervous doctors, but the question remains whether this will be enough to convert individual doctors into supporters of the new Medicare program and convince them to participate despite the AMA’s determined opposition.

► Directory of COVERED posts
► Learn more about the Academy’s celebration of the 50th anniversary of the enactment of Medicare and Medicaid
►Read the next post in the COVERED series, “Health Bill Promises New Social Security Benefits for College Students and Divorcees”

Posted on: April 17, 2015

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