The U.S. has its own culture, power dynamics and system of government that make it well-nigh impossible to implement a fiscally responsible universal healthcare system that the people and the politicians will agree to.

Consider the immense political power of the American Medical Association (AMA). Almost 30 years ago, the Balanced Budget Act of 1997 established a Medicare payment formula called the Sustainable Growth Rate (SGR).. This formula tied physician payment base rates to the growth of the U.S. economy so it functioned as a strict spending cap on Medicare physician reimbursements. Subsequently, repealing the SGR became a top legislative priority for the AMA and other physician lobbying groups and they succeeded in delaying reimbursement readjustments every year. By 2015, due to failure to apply the spending cap over the previous 18 years, the formula was set to trigger a 21.2% pay cut for physicians treating Medicare patients. The AMA and physician groups warned that if that cut was triggered, physicians would cease accepting Medicare patients.

No surprise: in April 2015,  Congress passed and President Obama signed the bipartisan Medicare Access and CHIP Reauthorization Act to permanently repeal the SGR. So much for spending reform. No wonder US physicians, on average, earn over $200,000 a year more than their peers in the OECD.

More from Owen Zidar and Eric Zwick, authors of The Everywhere Millionaire: Who is Really Rich in America and How They Got There  

From beverage distributors to auto dealers, Realtors to physicians, business owners consolidate and entrench their local market power. Their political influence protects them and, in turn, so do the laws and regulations they shape. Over decades they’ve restricted entry and blocked power grabs by other market players, amassing extraordinary  wealth while pushing up costs for the rest of us. 

…doctors profit by restricting access to medical care. Specifically, they maintain their market power most effectively via artificial constraints on the number of residency positions and the ability of non-physicians to treat patients.  

The AMA has also lobbied successfully to loosen federal restrictions on “self-referral”. That’s when physicians refer their patients to pharmacies and other medical practices in which the physician has an ownership stake. Unsurprisingly, self-referral is associated with over-utilization of healthcare services and higher costs, but not with better outcomes.

Sources:

Mitchell JM. Effect of Physician Ownership of Specialty Hospitals and Ambulatory Surgery Centers on Frequency of Use of Outpatient Orthopedic Surgery. Arch Surg. 2010;145(8):732–738. doi: 10.1001/archsurg.2010.149

Mitka M. Studies Probe Self-referral for Imaging. JAMA. 2012;307(3):241–242. doi:10.1001/jama.2011.1973 https://jamanetwork.com/journals/jama/article-abstract/1201025

The Everywhere Millionaire: Who is Really Rich in America and How They Got There by Owen Zidar and Eric Zwick (Henry Holt & Company, 2026)