The AMA Is Using Its Government-Granted Healthcare Data Monopoly to Power a Sketchy New Commercial Venture

By LEAH HOUSTON, MD (11)

Source: Health2047.com

Like many academic institutions and non-profits these days, the American Medical Association (AMA) decided not long ago to get into the innovation business, launching Health 2047, a new for-profit Silicon Valley-style venture innovation incubator.

One of the AMA’s first new ventures is Akiri, a blockchain-enabled data transmitting and sharing network built to efficiently transmit the data the AMA owns among patients, physicians, and health systems. According to a news brief filed at the time, Akiri’s data transmission network includes health information exchanges, and will allow the personal health records of patients to be transmitted. [1]

What most people don’t know is that Congress effectively granted the AMA a monopoly on healthcare data back in the sixties.

Here’s how it works. Physicians services are reimbursed under federal programs based on the Current Procedural Terminology (CPT) handbook. Under US law the only legal publisher of the CPT is the AMA, which first published the handbook in 1966.  At the time, the CPT handbook was seen as a tool to control and monitor healthcare costs. It was thought that the uniform coding system could be applied to measure healthcare reimbursement and physician activity.

In 1983 the Healthcare Financing Administration (HCFA) was given nonexclusive, royalty-free license to use the AMA generated CPT handbook for that purpose. In exchange, HCFA promised to exclusively use the AMA CPT system for all future procedural nomenclature- effectively giving monopoly rights to the AMA over medical billing and coding. [2]

Less than 10 years later, the AMA was also given exclusive rights to determine the value of physician’s services through appointments to the Relative Value Unit (RVU) committee; the committee that recommends the prices physicians charge.

In effect the AMA now:

1.) Determines what physicians should be paid and

2.) How physician services will be defined and billed.

The AMA also has a Masterfile containing nearly every physicians’ identifying information.  [3] Through policy, US government essentially gave a private organization bidirectional regulatory capture over the United States healthcare service, billing, coding and payment system.

In 2005 the AMA made over $44 million selling data from its Masterfile, so it makes sense that they would want to start the new Health 2047 venture in order to commercialize that data further.

The blockchain system powered by Akiri appears to be proprietary, closed and permissioned, offering no promised service to the public, despite its government protections through the AMA.

All of this raises important questions:

  • Why does one for profit entity have a monopoly on the sharing of data around patient diagnosis and documentation?
  • Why are we not taking advantage of blockchain’s true value to decentralize  consolidated systems?

Perhaps more concerning is the first collaborative application of the Akiri software will be with Celgene – a biotechnology and pharmaceutical company. This partnership reminds me of the unsavory 1990’s royalty agreement the AMA made with Sunbeam, a private medical device company. The AMA lost a nearly $10 million settlement in 1998 to Sunbeam after being forced to withdraw on the agreement after an outcry from the physician community, who has since further lost trust in the AMA.

Physicians and patients have been persistently voicing concerns against the ongoing corporatization of healthcare, and the protections the government affords to private companies and special interests. There are many private companies who have protections that lead to unforeseen harm; Insurance companies, have protections from antitrust violations under the 1947 McCarran Ferguson act, and third-party administrators who control the supply chain of  the pharmaceutical and medical devices were protected under a safe harbor law of 1991.

Both are examples of regulatory policies that continue to protect private companies while obscuring and driving up the price and cost of healthcare.

Health 2047 will likely continue to leverage the exclusive rights the AMA has to further develop and commercialize their government granted-access to healthcare data. The original agreement between HCFA and the AMA was made in 1983, when the AMA was a non-profit, with no for profit ties.

Since then, HIPAA was created (1996) with a goal to create standards for the electronic exchange, privacy and security of health information, and the HITECH act (2009) was applied to coerce physicians to digitize their documentation. Both of these policies have obvious benefits to electronic records companies, but also to organizations with exclusive rights, like the AMA. Corporations benefit, yet patients pay the price, and practicing physicians are faced with the uncompensated administrative burdens that significantly limit their time with patients.

As we see the cost of healthcare rising, I ask:

Why is the US government allowing private corporations to have so much control over a system that has already demonstrated to be expensive and fraught with administrative waste?

With physicians and patients becoming increasingly weary, why does the government continue to impose more regulation on the individual, and more protection for corporations?

We are in the age where data = dollars.  When private entities such as the AMA are given exclusive rights to commoditize on our data and the data of our patients it has the potential to do harm.  As our healthcare system is digitized and regulations like the 21st Century Cures Act call for new technology to implement data sharing and interoperability, it’s important that we pay attention to private organizations like the AMA who have been granted sweeping rights and protections in the past.

In this new digital health era I ask Congress:

  • Why are we mandated to share patient data?
  • Who owns, controls, and sells the data that we generate?

These are important questions.

*Disclaimer: this material is a compilation of publicly available information, and represents my opinion on the matter at hand.

1 “Health2047 spinout launches data sharing business, adds blockchain” By Stephanie Baum and Erin Dietsche for Med City News, January 3, 2018

2 Practice Management Information Corp. Petitioner v. American Medical Association Supreme Court Amicus Breif No. 97-1254 October Term 1997

3. http://info.commerce.ama-assn.org/ama-physician-masterfile

4. http://npalliance.org/prescription-data-mining/

5. AMA -supported startup launches blockchain data sharing network” By Meg Bryant for Health Care Dive, Jan 4, 2018

18 thoughts on “The AMA Is Using Its Government-Granted Healthcare Data Monopoly to Power a Sketchy New Commercial Venture

  1. This is pretty damned frightening while our health insurance is still tied to our work. Nor is the AMA anymore the end all and be-all of physician representation. I think this needs to be an op-ed in the Washington Post now that Donald Trump wants the Republicans be be known as the party of health care.

  2. Really like it; but I ask, so what else is new, and is the AMA any different than any other data selling nut case. The Medicare Governing Board is (was) a who’s who of industry. I have offered the idea numerous times before that we do not have a government medical care system (CMS or other). We have a bank account set up to nurture and foster dollars for special interests of capitalism who seek protectionism.

    The only way out of all of this is to bypass the system. It is coming, I think, and may be faster than we think. Patients and smart youngsters are already planning for a future without centralized systems of medical care. Medical care was and will always be best as a cottage industry of a few, not a conglomerate of dollar generators.

    Last, if docs join the AMA, they should lose their license.

    1. Very good questions in this piece, but I have one more (I think overriding) question:

      Why do quite a few physicians keep paying AMA membership fees?

      1. Honestly, many of them are unaware of the corruption, they are listening to the propaganda they are being spoon- fed by the AMA, and they are too busy to dig deeper. Some just havent taken the time to cancel their membership. The AMA spends a lot of money on marketing- and they often pester people to no end. There are very few who know all the facts and still think it is a good organization.

    2. I agree- insurance companies and CMS act as escarow agents for healthcare spending in many ways. They should not be called “payers” I agree we must bypass the system. the #DirectPrimaryCare movement is working on that- as are many other organizations listed here:

      Practicing Physicians of America https://practicingphysician.org/
      Humanitarian Physicians Empowerment Community https://hpec.io/
      Free Market Medical Association https://fmma.org/
      American Association of Physicians and Surgeons https://aapsonline.org/

  3. +1 Robert. Healthcare is an example of dis-economies of scale bordering on corruption. The idea of having to choose between a medical license and an AMA license is intriguing. What would healthcare in this country look like if doctors sent their AMA dues to Leah instead?

    1. I agree with Robert and Adrian.

      Historically since the early 1900’s there was a mistake that scaled. It began in 1850 when the Caduceus was adopted within the Chevron. Then again in 1871 when the surgeon general adopted the same symbol. It scaled in 1902 as the US Army Corp adopted it as their official symbol.

      It aligned perfectly with the war economy, moving from care delivery at the N of 1, to manufacturing and triaging those who can still fight back to the front lines, and eliminating those that could no longer fight.

      It all alignes with the industrial revolution, and the largest influence within “healthcare” as we know it today, Henry Ford.

      It was this that moved us from the art and practice of medicine, to a business mentality and the new world of healthcare. A world in which someone else paid the bills, to get more interchangeable people, to work along with interchangeable parts and processes, to make a bigger better faster cheaper widget.

      We love in two worlds. A world called medicine and a world called healthcare. One still happens and can be controlled at the N of 1 (physician and patient level) and the other that scales mediocrity, drives to the mean, and is satisfied when everyone receives average care.

      We removed the MD, PhD, and MSc from leadership because we were told that the MBA and BA could make medicine more efficient and effective, we bought their BS.

      We can all sit and talk about how we can upend healthcare, but unless we burn the entire industrial medical complex, it’s only incremental at best.

      In my honest opinion of delivering care across the world, our best best happens when our physicians and patients decide to practice medicine at the N of 1.

      We don’t need permission. We don’t need investment of dollars. We don’t need infrastructure. We don’t need anything to make it happen, other than two people, taking the time, having transparent conversations, managing transitions in the journey of medicine, and earning trust in one another.

      Do that, and we move the needle.

      It begins with you. It begins with me. It scales with us.

      1. “….unless we burn the entire industrial medical complex, it’s only incremental at best….”

        What if instead of “burning it” we just walk away… and then it dissolves…?

        “…In my honest opinion of delivering care across the world, our best best happens when our physicians and patients decide to practice medicine at the N of 1…”

        I agree… and I think your opinion is shared by most physicians and patients…

    2. Love it! – but honestly- I don’t want any membership fees- that only leaves room for corruption… Better plan: what if physicians got a digital membership that allowed them to allocate funding to causes they care about through voting and governance? where a small transactional fee was taken in exchange for services received and determined by the choice of the individual? Where we can work together to support policies and practices that are the best practices without a hierarchical board of directors deciding for us? That’s what https://hpec.io/ is working on- where your digital identity and your vote determines where your funding goes.

    1. What a great discussion! Boy, have things changed. I feel so much less “alone” in my thoughts about the need to scale things back to the “healer and the patient.”

      Robert: If myself, Leah and a whole host of other physicians have anything to say about it –and we will—the AMA will become irrelevant over time. Let us take down the damn American Board of Internal Medicine first 😊 then we can move on to the AMA.

      1. It is an even better discussion for me, the “covered life” or patient. I have been forced, as I age, to go informally to medical school to learn to care for myself. Fortunately I am not demented yet, and am interested in the healing arts as a “hobby.” But I’ll bet I’m an N of 1 as well, because I use doctors as consultants. I love their clinical experience, but think we do best as a team.

        The AMA does not help me, nor does the board of Internal Medicine. There are a hand ful of doctors in Phoenix who are both internists and integral medicine specialists and I find them. I can afford to pay out of pocket and so can my friends and we all share the gift of wanting to extend quality, not quantity of life.

        I’ve seen this coming for a long time. Things are finally coming to a boil. Twenty years ago you couldn’t get doctors on board to make change. They were too comfortable. Now the internet has changed everything and they’re on board. I hope.

      2. Yes!!! one step at a time we dismantle the systems that extort our time and resources, and one patient at a time we pull away from the third parties that harm our patients and practice.

  4. Might it the @HealthcareBorg is imploding via its tendency to ‘circle the wagons and shoot in’? Dis-organized medicine is no stranger to Internecine warfare. Think RBRVS (cognitive v procedural) evisceration by subspecialty interests

  5. There are several factual errors in this piece.

    1. I was at the AMA in 1983 and it already had a vision of becoming “AMA Inc.”, pivoting from dues to non-dues revenue. The reason was AMA was unable to convince most physicians to pay dues. I know. I was in charge of recruiting physicians to join.

    2. The AMA controls the CPT coding system. It DOES not have any data on procedures. That data is owned by providers and payers including the Federal government, which makes it available for research h and commercial purposes.

    3. It is in the interest of the profession to have its professional associations adjudicate inter specialty disputes about relative value and coding. If the government didn’t outsource it, it would do it in-house. The lobbying would then be done in the halls of CMS, no doubt with less physician input than is now the case.

    4. I no Lilongwe have a dog in this hunt but I advise those of you who are alienated from your professional associations to not only join them but get actively involved. These are YOUR organizations. Believe it or not they are run democratically and are reformable.

Leave a Reply