Doctors should rely on better business sense -- not government generosity

LETTER — Posted June 19, 2006

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Regarding "Medicare forecast renews call for pay reform" (Article, May 22/29): American Medical Association Chair Duane Cady, MD, calls on Congress to "tie Medicare physician payments to the cost of caring for seniors." Unfortunately, that paradigm, "cost-based charging" died in the United States sometime in the last century. We now live in an economy characterized by the converse, "charge-based costing." The days of passing on overhead to consumers ended long ago.

The marketplace, not producers, now determines the price of any product or service. It is incumbent upon physicians, and those who train them, to understand this distinction and thus be better prepared to survive in the era of declining reimbursement.

By applying the principles of operations management to clinical services, it is possible to redesign workflows, increase productivity and throughput and improve quality and revenue in the process.

Too many physicians are stuck in century-old workflows. Obtaining some business and management education will go a long way toward alleviating physician distress and will be much more effective than calling upon Congress to spend money it doesn't have.

Michael A. Patmas, MD, Bend, Ore.

Editor's note: Dr. Patmas is the AMA House of Delegates alternate delegate from the American College of Physician Executives.

Note: This item originally appeared at http://www.ama-assn.org/amednews/2006/06/19/edlt0619.htm.

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