1. Physicians Role in Health Policy
Alex Alverdy Katie Kiefer Vysak
Venkateswaran
2. Price Setting of Health Care Services
• Before 1992, the “Usual, Customary, and
Reasonable” (UCR) payment model was used
Editor's Notes
Before 1992, the “Usual, Customary, and Reasonable” (UCR) payment model was used. As AtulGawande, a famous physician, described in his novel “Better”, physicians were paid under this model more or less whatever doctors decided to charge. Not surprisingly, some of the charges began to rise considerably. For example, fees for cataract surgery (which could reach six thousand dollars in 1985) had been set when the operation typically took 2-3 hours. When new technologies allowed ophthalmologists to do it in thirty minutes, the fees did not change. Billings for this one operation grew to consume 4% of medicare’s budget. In the mid eighties, doctors who spent an hour making a complex and lifesaving diagnosis were paid forty dollars, while they received more than 600 dollars for spending an hour doing a colonoscopy. Thus, in the 1980s, both private and public insurers began to agitate for a more rational schedule of payments.
