The AMA has frequently expressed concerns about fundholding and pointed to the dissatisfaction associated with the American HMO model where there are prohibitions on informing patients about the full range of treatment and diagnostic options and where bonuses are paid to physicians for restraining utilization, particularly of hospital days but also for costly investigations. The AMA has, however, studiously avoided pointing out that the problems with fundholding have nothing to do with the fact that funds are held by some body to administer on behalf of others. The critical defect in fundholding is that it is government or Divisions or some other body and not individuals and families, that have control over the disposition of the health insurance dollar. In the Australian version, fundholding simply replaces the bureaucracy with the fundholder as the rationer of services and continues to provide the same perverse incentives that are inherent in any system in which the consumer is not responsible for the fee charged. Of course, were the AMA to recognize this point they would also have to oppose Medicare and the wide range of grants by governments to physicians and practices.
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