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April 28, 1989

Fair Compensation for Physicians

JAMA. 1989;261(16):2400. doi:10.1001/jama.1989.03420160132037

In 1985, after consultation with many wise persons, I described a developing aura of inevitability that the way physicians in the United States are paid would be changed.1I noted that relative value scales, diagnosis related groups, capitation, and spending targets were being considered. I urged physicians to participate in guiding change.

That editorial itemized 12 principles that I believed should be applied in any new physician payment system. These addressed effectiveness and efficiency, pluralism, years of education, level of skill, quality and quantity of work, and provision of preventive services; they took note of excessive charges for some procedures, conflicts of interest, professional liability costs, and instances of gross overcharging and recommended that laws of economic supply and demand be allowed to function.

Since that time, there has been extensive involvement of physicians in developing a new system of payment. Board of Trustees Report AA was adopted as