The growth of additional groups that have a concentrated interest in health care has resulted in a decline in the relative political influence of physician and hospital associations. For example, provider organizations, such as chiropractors, psychologists, and podiatrists, have sought to compete with physicians by becoming eligible for reimbursement by insurance companies and Medicare and Medicaid. The HMOs and insurers have opposed medical societies in their attempt to enact restrictive legislation, such as any willing provider laws and patient's rights laws that would increase costs for HMOs. And the federal government has a concentrated interest in reducing the rate of increase in Medicare expenditures by placing reimbursement limits on physicians and hospitals.
The fact that both the AMA and the AHA have a diverse membership also decreases their political influence. Within the AMA there are many different specialty groups of physicians. Similarly, within the AHA, there are separate groups of hospitals, such as the urban, rural, teaching, and state hospital associations, that have a concentrated interest in increasing federal funds to their own constituencies at the expense of other constituencies, within a budget-neutral environment.
When the federal government phased in (over a five-year period) the new Medicare hospital payment system in 1983, it was determined that it would be "budget-neutral," that is, although the payment method changed to DRGs, the total amount to be spent on hospitals would be the same. Thus, any gains to one group of hospitals had to be offset by losses to other groups of hospitals. The effect of budget-neutrality was to lessen the political influence of the AHA, because the AHA could only favor revenue increases to all hospitals - not to specific groups of hospitals. Each group of hospitals then developed their own lobbying organization to try and receive more Medicare funding and to protect themselves against the lobbying efforts of other hospital associations. Hospitals no longer spoke to legislators with one voice.
The Medicare physician payment system (using the RBRV) introduced in the 1990s was also based on budget-neutrality. One of its objectives was to redistribute income away from procedure-oriented specialists toward family physicians. Each medical specialty association engaged in the political process, both to receive higher reimbursement and to protect the interests of its own members. Although a majority of its membership is specialists, the AMA could not favor one medical group over another for fear of losing the membership of these large medical associations. These medical societies were also very active during the debate over President Clinton's health reform proposal; for example, the American College of Surgeons (52,000 members) and the American College of Physicians (70,000 internists) supported an overall budget limit and fee controls, which the AMA and other medical societies opposed.
The existence of multiple hospital and medical associations, each with its own concentrated interest and representing those interests, has politically weakened the umbrella organizations, the AMA and the AHA. The AMA and AHA have attempted to represent the interests of all of their members by lobbying for more federal funding and against any further reductions in Medicare payments. The membership of both organizations was significantly rewarded by the Bush administration by helping the administration lobby wavering legislators to vote in favor of the MMA. Given the limited funds available at the federal and state level for assisting the uninsured and expanding Medicaid, the AMA and the AHA have favored health reform proposals that increase the demand for medical services in the private sector, such as an employer mandate and HSAs, while opposing further reductions in Medicare and Medicaid provider payments.
Health insurers want to ensure that any health reform program retains the private health insurance industry and, second, that there is an increase in the demand for private health insurance. The health insurance industry, however, is split between large and small insurers. Large insurers would like to see small insurers exit the industry. Large insurers are in favor of managed care and HMOs because they believe they can develop such organizations and can use their marketing systems to increase their market share.
Smaller health insurance companies would prefer to sell traditional indemnity and catastrophic insurance, that is, continue to manage risk rather than manage care, as large insurers are slowly attempting to do. (Under the Clinton health plan, smaller insurers opposed larger insurers, believing they would no longer have a role if the large purchasing pools, referred to as health alliances, chose participating insurers and HMOs.) The difference in economic interests between insurers also explains why large insurers favor health insurance reform regulations, such as guaranteed renewability and portability (permitting an employee to keep his health insurance when changing employers), because large insurers will be better able than small insurers to bear these costs, thereby giving them a competitive advantage over small insurers.
An issue health insurers (and HMOs) would like resolved in any national health insurance plan is which medical treatments are considered experimental and do not have to be covered in their benefit package. Denying medical treatments that are considered experimental or that have very low probabilities of success for certain patients leaves the insurer liable for large damage awards. It is difficult for insurers to calculate a premium if it is not known which new medical treatments will be part of their enrollees' benefits. Insurers would prefer that the federal government establish technology assessment panels that would undertake cost-effectiveness studies of new technology and presumably limit access to expensive medical treatments. Opposing insurers on this issue are pharmaceutical and medical technology companies whose revenues and profitability would be decreased. Health insurers would also like to limit lawsuits over denial of care by relying on outside review panels for deciding such issues.
Opposed to any limits on patient lawsuits over denial of care have been trial lawyer associations. The issue of lawsuits has been an important stumbling block to reaching any compromise between these two organizations on enacting federal patient rights legislation.
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